Glossary
Wallet
The tool that holds your keys and signs transactions. The wallet itself never stores coins.
A wallet is an interface for holding keys, not coins. Your tokens live on the blockchain; the wallet stores the private key that proves you control an address and signs transactions with it.
Self-custodial wallets such as MetaMask, Phantom and Rabby keep the key on your device. Exchange accounts also call themselves wallets but the key belongs to the exchange, which means the balance depends on that company's solvency.
The practical split: use a hot wallet for small balances and active transactions, keep long-term holdings in a hardware wallet, and never paste a seed phrase into any website.
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.