Glossary
Validator
A node that stakes tokens to propose and attest to blocks, earning rewards for correct behaviour.
A validator checks transactions, proposes blocks, and attests to the blocks others propose. It has to stake the chain's native token as collateral, which is what makes misbehaviour expensive.
Correct behaviour earns a share of transaction fees and, on some chains, issuance. Incorrect behaviour loses part of the stake through slashing, which is the enforcement mechanism behind proof of stake.
Validators require hardware, uptime, and monitoring. Delegation exists because most holders cannot run one: they delegate stake to an operator and accept an additional party in the trust chain for a share of the rewards.
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.