Tag: Glossary

A vault is a sort of blockchain architecture that is used for storing, depositing, and withdrawing various types of cryptocurrency assets, particularly in decentralized finance (DeFi) protocols. A DeFi system, for example, must automatically exchange the proper quantity of assets between multiple parties using smart contracts when a user stakes, loans, borrows, or mints distinct crypto assets. During times of heavy purchase or sell pressure,...

Volatility refers to the degree of variance in an asset’s trading prices compared to its mean price over a certain period of time in the marketplace. The higher the frequency and amount of price movements, the more volatile an asset’s price is. Standard deviations of logarithmic returns are often used to calculate volatility. Many investors keep an eye on an asset’s volatility in order to spot and profit from trading opportunities...

A validator is an entity that checks and approves transactions submitted by users and/or blockchain clients in the context of blockchain technology.  Each blockchain protocol has its own set of rules for what makes a validator and how these validators work. To execute on-chain transactions in a permissionless and distributed way, most decentralized blockchain networks use some type of validator node.

Utility tokens are tokens that are expressly intended to assist people in using something. The usage of utility tokens is restricted to the ecosystem for which the utility token was created. Uber, for example, may one day issue its own utility token that users may use to pay for trips on the Uber network. Utility tokens aren’t meant to be used as investments. Filecoin is a utility token created to assist consumers to utilize the Filecoin...