Glossary
Layer 1
A base blockchain that processes and secures its own transactions, like Bitcoin or Ethereum.
A layer 1 is a base blockchain that processes and secures its own transactions — Bitcoin, Ethereum, Solana. Every node replays every transaction, which is what makes the chain trustworthy and also what makes it slow.
L1s compete on the trade-off between decentralisation, security and throughput. You can optimise two of the three, which is why there is no single winning chain.
Related terms
Airdrop
Free tokens distributed to wallet addresses, usually to reward early users of a protocol.
AMM
Automated Market Maker — a protocol that prices assets with a formula instead of an order book.
APR vs APY
APR is the yearly rate without compounding; APY includes compounding and is always higher.
ATH
All-Time High — the highest price an asset has ever traded at.
Bear Market
A prolonged decline, conventionally 20% or more from recent highs.
Bull Market
A prolonged rise driven by new demand, easy credit and rising confidence.