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Glossary

27 terms that come up in the articles. One sentence each, and none of them leans on another term.

How trading is put together

Spot: Buying the coin itself, like at an exchange window: you paid, it is yours, you can withdraw it.
Perp: A contract that bets on a price rather than owning it. You hold no coin, only the bet — and the bet can be placed on a fall.
Order book: The list of every resting buy and sell order with its price. All trading happens inside it: your buy is filled against somebody's resting sell.
Market maker: A participant who keeps orders resting on both sides of the book so there is always someone to trade with. Usually the exchange pays them for it.
Ticker: A coin's short name in trading. It is not unique: two entirely different projects can carry the same ticker on two venues.
Network: The blockchain a coin travels on. One coin often exists on several, and an exchange switches them on and off separately.

Liquidity: How much you can buy or sell without moving the price. Where it is thin, even a modest order moves the price by percent.
Capacity: How much money actually fits into a given trade before the price runs away. The main question behind almost any find, and the least pleasant one.
Slippage: The gap between the price you saw and the price your trade actually got. It grows once your order is larger than the book.
Daily volume: How much money changed hands in a coin over a day. It lies more often than people expect: volume is cheap to manufacture, a book is not.

Short: A bet on a fall: you sell what you do not own, then buy it back lower. If the price rises instead, you lose.
Leverage and liquidation: Leverage is trading a size larger than your own money. If the price moves against you far enough, the exchange closes the position for you — that is liquidation.
Funding: A recurring payment between the people betting up and the people betting down. Whichever side is crowded pays the other. It matters once you hold for a while.
Arbitrage: Buying where it is cheaper and selling where it is dearer at the same time. Arbitrage is what keeps prices on different venues roughly equal.
Spread: The distance between two prices: between the best buy and the best sell in one book, or between two venues.
Legs of a trade: The two halves of one operation: bought here, sold there. Both have to be counted — the round trip decides the result, not the entry.

Float: How many coins actually circulate right now, as opposed to how many exist on paper. A small float is easy to push up and just as easy to collapse.
Fully diluted value: What the coin would be worth if the entire supply were already trading. The gap between that and today's price tells you how much supply is still coming.
Vesting: The schedule on which locked tokens are released: this much on this date, usually mapped out two or three years ahead.
Cliff: One large slice of a vesting schedule that unlocks in a single day instead of dripping out. Cliffs are what you see in the calendar.

Mark price: The price the exchange uses to compute your profit and to decide whether to liquidate you. It can differ from what the book shows.
Index price: An outside reference, usually an average across several venues. A venue without one can let its price drift on its own.

Smart contract: A program on a blockchain that holds money and enforces the rules itself, with nobody in the middle. It cannot be amended after the fact.
Oracle: Where a program learns a price from. It has no eyes of its own: it takes a number from an outside source and trusts it.
Hot wallet: An exchange wallet whose key sits on a running server so payouts can go out automatically. Convenient to operate and exposed by definition.
Bridge: A crossing for a coin between two blockchains. It holds funds on both sides, which makes it the largest single pile of money on the market.
Value locked: Everything people have handed a program to hold or put to work. It is both the protocol's working capital and the amount that can be carried away.