Crypto Launchpad Glossary: Key Terms and Definitions

Explore our comprehensive glossary of Web3 and crypto terms, designed to empower users with clear, concise definitions for navigating the evolving blockchain ecosystem.

Understanding the terms in Web3 and crypto launchpads is critical for any investor looking to navigate the space effectively. This alphabetically organized glossary equips retail investors with essential and expanded terms to make informed decisions in the Web3 space.

Airdrop: The process of distributing free tokens to users as part of marketing efforts or community rewards to drive adoption.

Allocation: The specific amount of tokens reserved for an individual or group during a token sale.

AMA (Ask Me Anything): A live Q&A session where the project team engages with the community to answer questions about the project.

AML (Anti-Money Laundering): A set of rules and processes to identify and prevent the use of crypto for illegal financial activities.

APR (Annual Percentage Rate): The non-compounding annual return earned on an investment like staking or lending tokens.

APY (Annual Percentage Yield): The annual return on an investment that includes the effects of compounding interest.

AI Agent: Self-operating AI-based software capable of executing specific tasks, such as automating trades, governance voting, or asset management within blockchain networks.

Auction: A fundraising mechanism where token prices are determined by participant bids, often leading to dynamic pricing.

Backing: Financial or strategic support provided to a project by investors, launchpads, or venture capitalists.

BEP-20: A standard for tokens created on the Binance Smart Chain (BSC), enabling smooth integration with BSC-based applications.

Blockchain: A decentralized network that records and stores transaction data securely and transparently in an immutable ledger.

Blockchain Explorer: A tool that allows users to track blockchain activity, view wallet balances, and monitor transactions.

Bridge: A protocol that facilitates the transfer of assets and data between two separate blockchain networks.

Burn Mechanism: A process where tokens are intentionally destroyed to permanently reduce the total supply, increasing scarcity.

CEX (Centralized Exchange): A crypto trading platform managed by a centralized authority, such as Binance or Coinbase.

Circulating Supply: The total number of tokens currently available and being traded in the market.

Compounding: The reinvestment of earned rewards to generate additional returns over time.

Cross-chain: The ability of different blockchains to communicate, enabling asset transfers and data sharing across networks.

Crowdfunding: Raising funds for a project by collecting small contributions from a large group of investors, typically in early stages.

Custody: Secure storage of digital assets by a trusted third party or platform.

DAO (Decentralized Autonomous Organization): A community-led organization managed through smart contracts and decentralized voting.

DeFi (Decentralized Finance): A blockchain-based financial system that offers services like lending, borrowing, and trading without intermediaries.

DEX (Decentralized Exchange): A peer-to-peer platform where users trade crypto directly without a central authority.

Dividend Token: A token that distributes a share of profits or revenue to its holders as rewards.

Dynamic NFTs: NFTs capable of changing their attributes based on real-world events or user interactions.

ERC-20: The most common token standard on Ethereum, ensuring interoperability with Ethereum-based platforms.

Equity Token: A token representing ownership in a company, granting rights similar to traditional stocks.

EVM (Ethereum Virtual Machine): The decentralized computation environment that powers smart contracts on Ethereum.

FCFS (First Come, First Served): A token sale model where tokens are allocated to participants based on their speed of participation.

FHE (Fully Homomorphic Encryption): A privacy-preserving encryption method that allows computations on encrypted data without exposing it.

Fork: A blockchain split where a single network branches into two separate versions, often due to disagreements or upgrades.

Fractional Ownership: Dividing an asset, such as property or art, into smaller portions that can be owned by multiple investors via tokenization.

Gas Fees: Fees paid to validators or miners to process transactions on a blockchain.

Gasless Transactions: Blockchain transactions where users are not required to pay transaction fees directly.

Governance Token: A token granting voting power to holders, allowing them to influence project decisions and updates.

Grace Period: A period following a deadline during which specific actions, such as claiming tokens, can still occur.

Hard Cap: The maximum fundraising target for a token sale, beyond which no more contributions are accepted.

Hash Rate: A measure of computational power used to process transactions and secure a blockchain network.

ICO (Initial Coin Offering): An early-stage fundraising method where investors buy tokens before the project is fully launched.

IDO (Initial DEX Offering): A decentralized fundraising event where tokens are launched on a DEX.

IEO (Initial Exchange Offering): A token sale conducted through a centralized exchange.

IMC (Initial Market Capitalization): The initial valuation of a project’s tokens at launch.

Interoperability: The ability for blockchains to exchange information and assets seamlessly.

Investors: Individuals or institutions providing capital to fund projects in exchange for equity or tokens.

KOL (Key Opinion Leader): Influential individuals who amplify a project’s reach and credibility through their endorsements.

KOL Round: A token sale phase involving influencers to boost visibility.

KYC (Know Your Customer): A process requiring users to verify their identity to comply with regulations.

Layer 1: The foundational blockchain layer providing security and decentralization (e.g., Ethereum, Bitcoin).

Layer 2: Off-chain solutions built atop Layer 1 to enhance scalability and reduce costs.

Learn-to-Earn (L2E): A rewards model where users earn tokens for completing educational activities.

Liquidity Mining: Earning rewards by providing liquidity to DeFi platforms.

Liquidity Pool: Token reserves locked in smart contracts to enable decentralized trading.

Lock-up Period: A predetermined duration during which tokens cannot be sold or transferred.

Main Sale: The primary public phase of a token sale where the majority of tokens are sold.

Market Cap: The total value of a token, calculated by multiplying its price by the circulating supply.

MEV (Miner Extractable Value): Profits miners or validators can gain by manipulating transaction orders.

Mint: The creation of new tokens or NFTs on a blockchain.

Node: A participant in a blockchain network responsible for validating transactions and maintaining the network.

Off-chain: Activities or transactions that occur outside the blockchain.

On-chain: Transactions and data recorded directly on a blockchain.

Partnership: A collaboration between projects or organizations to achieve mutual goals.

Presale: An early fundraising round offering discounted tokens before the public sale.

Private Sale: A funding round reserved for select early investors.

Public Sale: The phase where tokens are made available to the broader public.

Refund Policy: Guidelines allowing participants to request refunds within specified conditions.

Roadmap: A detailed plan outlining a project’s goals, deliverables, and timelines.

Rollup: A Layer 2 scaling solution bundling transactions to increase blockchain efficiency.

Rug Pull: A scam where project developers abandon a project after collecting funds.

RWA (Real-World Assets): Tangible assets like real estate or commodities tokenized on blockchain.

Scalability: The capability of a blockchain to efficiently process more transactions as demand grows.

Security Audit: A review of smart contracts and protocols to identify and fix vulnerabilities.

Seed Round: The initial fundraising round providing early capital to develop a project.

Smart Contract: A self-executing contract where terms are written directly into code.

Soft Cap: The minimum funding target for a project to proceed.

Staking: Locking tokens to earn rewards while contributing to network security.

TGE (Token Generation Event): The event where new tokens are issued and distributed to investors.

Tokenomics: The token’s economic structure, including its supply, distribution, and utility.

TVL (Total Value Locked): The total assets staked or locked in a DeFi platform.

Utility Token: A token granting access to a project’s ecosystem, products, or services.

Validator: A blockchain participant who verifies transactions and adds them to the blockchain.

Vesting Schedule: A timeline that determines when tokens are released to investors or team members.

Web3: The decentralized internet powered by blockchain, providing greater control to users.

Whitelist: A list of pre-approved participants eligible to join a token sale or event.