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Explore clear definitions, everyday examples and lesson contexts.
Showing 12 of 20 matching terms
A base blockchain that agrees on its own blocks and secures itself, such as Bitcoin or Ethereum.
Example: Think of a base record system with its own agreement rules. Bitcoin and Ethereum are separate base networks; the same looking asset label does not make their transfers interchangeable.
A separate network that processes transactions away from a layer 1 but relies on that layer 1 for security, for example by posting its data or proofs back to it.
Example: A branch system processes work and settles specified evidence to its base system. Check what security it actually inherits, where its data is available and who can change its rules.
Keep in mind: Security can depend on proofs, data availability, sequencers and upgrade controls. A sidechain is not automatically a layer 2.
A company, foundation or association set up under a country's law to give a DAO a legal identity and, depending on the law, limit its members' personal liability.
Example: A community association registers a legal entity to sign contracts. A DAO may also use an entity, but the name alone does not establish members' rights or limited liability everywhere.
Keep in mind: Legal personality and member liability depend on the jurisdiction and documents. A wrapper does not remove every legal obligation.
Leverage allows a trader to control a position that is larger than the cash they personally put down. This can make small market movements have a much larger effect on the trader's own money — leverage works in both directions, increasing gains, but also increasing losses.
Example: In an invented demo, a 1% adverse move on a 2,000-unit exposure produces a 20-unit price loss before costs, even if the initial margin is only 100.
Keep in mind: Margin is not the exposure amount and not a guaranteed loss ceiling.
An instruction permitting a purchase at a stated maximum price or lower, or a sale at a stated minimum price or higher.
Example: A buyer says, I will pay 50 or less for the chair; if no seller qualifies, no purchase occurs.
Keep in mind: A chart touching the level is not proof that the correct executable side and available quantity qualified.
A token representing a claim on pooled staked assets under the service rules. Rewards may appear through more tokens or a changing redemption rate; trading price, redemption timing and backing can differ.
Example: A receipt records a claim on pooled assets. Selling the receipt today is different from waiting to redeem the assets; the receipt's market price may differ from its underlying claim.
Forced reduction or closure when a trading position fails its margin requirements, or seizure of collateral when a lending position crosses its liquidation threshold. The trigger and process depend on the venue or protocol.
Example: In an invented borrowing example, collateral worth USD 150 supports USD 100 debt. A price fall may cross the protocol's threshold and permit collateral seizure before the collateral reaches zero.
How readily a transaction of a given size can be arranged at available prices without a large price impact. High total market activity does not guarantee liquidity for your exact pair, size, provider, and moment.
Example: A shop may easily handle one customer’s small order but need different terms for a very large order.
Keep in mind: A broad description of market activity does not establish your exact available execution.
An account where transactions involve real funds rather than simulated practice money. Its actual product terms, costs and risks apply.
Example: An incorrect order in a practice account changes a simulated balance; the same mistake in a live account can affect real money.
Keep in mind: Passing a demo exercise is not proof that live trading is suitable or profitable.
The debt value divided by the collateral value, usually expressed as a percentage at a stated valuation time. Protocols set borrowing limits separately from liquidation thresholds.
Example: USD 100 debt against USD 200 collateral gives 50% LTV in an invented example. If collateral falls to USD 125 with debt unchanged, LTV becomes 80%.
Keep in mind: LTV is not the same as the liquidation threshold or health factor.
A position that buys the base currency and sells the quote currency of a pair. Its price exposure benefits from a rise in the pair, before costs.
Example: The price-direction idea resembles buying something first and hoping to sell it for more later.
Keep in mind: The analogy does not replace the contract terms, executable prices or costs.
Using information in a historical decision that was not available at that decision’s stated time.
Example: A Tuesday simulation uses a report only published on Friday, even though its positions are dated Tuesday.
Keep in mind: Observation dates, publication times, revisions and confirmation delays must all respect the cutoff.
A sequence of consecutive losses under a consistent definition of a counted outcome.
Example: An invented practice log records three qualifying losses in succession.
Keep in mind: The next outcome does not owe repayment; the streak alone cannot identify whether the method or conditions changed.
The tendency for a loss to feel more painful than a gain of the same size feels good, measured from a reference point such as the purchase price.
Example: Losing EUR 20 may feel more upsetting than finding EUR 20 feels pleasant. That feeling can tempt someone to delay a necessary review of a losing position.
A tendency for losses to carry more weight than comparable gains around a reference point. Responses differ across people and situations.
Example: A learner notices that losing 5 feels more upsetting than gaining 5 feels pleasing, then records the actual decisions this feeling affected.
Keep in mind: A feeling is not proof of a bias-driven action or a reason to override a valid exit rule.
The total amount of money, written as a cash figure in your home currency, that you have decided in advance you could lose on crypto without touching essential money or your emergency fund.
Example: A learner writes a cash boundary after setting aside rent, bills and emergency money. A planned boundary is a control to review, not a promise that any position will stop at it.
Position size is the quantity involved in a position; a lot is a unit used to express that quantity. Conventional Forex standard, mini and micro lots often represent 100,000, 10,000 and 1,000 base currency units respectively. Check the actual contract specification.
Example: Choosing one packet or ten packets illustrates why quantity changes the amount involved.
Keep in mind: Keep the lot convention, currency units, margin and loss scenario distinct.
A selected high below a previous comparable selected high under the same observation rule.
Example: Invented confirmed highs of 12 then 11 show a lower high.
Keep in mind: A lower high is a description of selected observations, not a guarantee of further decline.
A selected low below a previous comparable selected low under the same observation rule.
Example: Invented confirmed lows of 8 then 6 show a lower low.
Keep in mind: A forming or unconfirmed low must not be treated as a confirmed observation.
A record of a liquidity provider position and its withdrawal rights under a pool design. Some systems use fungible tokens; others use NFTs. Withdrawable assets and fee collection depend on that design.
Example: A receipt can identify a share in a joint pool. The pool's rules decide what the receipt can redeem and how fees are collected; a percentage share does not freeze the original asset mix.