Investing & Digital AssetsInvesting & Digital Assets GlossaryPart 6 of 13
Chains and Wallets Glossary
54 terms from the Investing & Digital Assets book's Chains and Wallets part, each defined in a line and linked to the chapter that explains it.
- Account model: a chain that keeps a balance and a transaction counter (nonce) per account, as Ethereum and Solana do, so an account's transactions execute strictly in order (Blockchains for Platform Engineers).
- Address poisoning: putting a lookalike address into a victim's transaction history with a zero-value or dust transfer so the victim later copies it by mistake (Wallets).
- Allowance (approval): the amount an ERC-20 holder has authorized a spender to move with
transferFrom, set byapproveand kept until spent or reset (Tokens & Token Standards). - Associated token account: a Solana holder's token account for one mint, at an address derived from the wallet and the mint (Tokens & Token Standards).
- Base fee: the per-gas price every transaction in an Ethereum block pays under EIP-1559, moving at most one-eighth per block toward the gas target and burned (Blockchains for Platform Engineers).
- Blob: a 128 KiB data payload rollups post to Ethereum under EIP-4844, priced by its own fee market and kept by nodes for about 18 days (Layer 2s, Bridges & Cross-Chain).
- Bridge: a system that moves an asset between chains that don't share a ledger, by locking and minting, burning and minting, paying from inventory or relaying verified messages (Layer 2s, Bridges & Cross-Chain).
- Bridged token: a token on one chain backed by collateral locked by a bridge on another, a claim on the bridge rather than on the original issuer (Layer 2s, Bridges & Cross-Chain).
- Challenge period: the time an optimistic rollup's state claim can be disputed before withdrawals to Ethereum can be finalized, seven days on the OP Stack's mainnet configuration (Layer 2s, Bridges & Cross-Chain).
- Child pays for parent (CPFP): pulling a stuck Bitcoin transaction into a block by spending its output in a child with a fee high enough for the pair (Blockchains for Platform Engineers).
- Commitment level: how settled a Solana block is (processed, confirmed, finalized); under Alpenglow, confirmed and finalized are the same (Blockchains for Platform Engineers).
- Delegatecall: an EVM call that runs another contract's code with the caller's storage and balance; from a multisig to an untrusted contract it hands over the wallet (Keys, Signing & Key Management).
- Drainer: a phishing kit that gets a wallet user to sign an approval, permit or authorization that lets the attacker take the user's assets (Wallets).
- DVN (decentralized verifier network): a verifier an application configures in LayerZero to attest cross-chain messages, set per pathway as X-of-Y-of-N (Layer 2s, Bridges & Cross-Chain).
- Effective gas price: what an Ethereum transaction pays per gas, the base fee plus the lesser of the priority fee cap and the room under the max fee (Blockchains for Platform Engineers).
- EIP-7702 authorization: a signed tuple that sets an EOA's code to point at a delegate contract; with chain ID 0 it is valid on every chain (Wallets).
- Embedded wallet: a wallet an app creates for a user at sign-up, with the key held in shares or enclaves and recovered through the app's login rather than a seed phrase (Wallets).
- EOA (externally owned account): an Ethereum account controlled by a private key rather than by contract code (Wallets).
- ERC-20: the standard interface for fungible tokens on EVM chains: balances, transfers, approvals and the
TransferandApprovalevents (Tokens & Token Standards). - ERC-4337 (account abstraction): a standard for contract wallets that submit user operations through bundlers to a shared EntryPoint contract, with optional paymasters for gas (Wallets).
- ERC-721 and ERC-1155: the standards for non-fungible tokens and for contracts holding many token types, identified by contract and token ID (Tokens & Token Standards).
- Event log: a record a contract emits during execution, with topics (the event signature hash and indexed fields) and data, which indexers filter on (Chain Data & Indexing).
- Fee-on-transfer token: a token that delivers less than the amount sent because the contract withholds a fee, so deposits credit by balance change (Tokens & Token Standards).
- Finality: the point after which a chain's block can't be reverted short of a prohibitive cost; on Ethereum, a finalized checkpoint, which an attacker would need to sacrifice at least one-third of staked ETH to revert (Blockchains for Platform Engineers).
- Fork point: the last block two competing branches share, where reorg-safe ingestion rewinds to (Chain Data & Indexing).
- Gap limit: the number of consecutive unused addresses (20 under BIP-44) after which recovery software stops scanning an HD account (Keys, Signing & Key Management).
- Hardened derivation: BIP-32 child derivation at indexes 2^31 and above, which needs the parent private key, so a leaked child key and xpub can't expose keys above it (Keys, Signing & Key Management).
- HD wallet: a hierarchical deterministic wallet that derives every key from one seed along numbered paths (BIP-32, BIP-39, BIP-44) (Keys, Signing & Key Management).
- Key ceremony: the scripted, witnessed event in which custody keys or shares are generated, backed up, refreshed or destroyed (Keys, Signing & Key Management).
- Mempool: a node's set of broadcast transactions not yet in a block; each node keeps its own under its own policy (Blockchains for Platform Engineers).
- Mnemonic (seed phrase): 12 to 24 words encoding a wallet's entropy and checksum under BIP-39, from which the HD seed is derived (Keys, Signing & Key Management).
- MPC (threshold signatures): signing in which parties holding key shares jointly produce one ordinary signature without ever assembling the key (Keys, Signing & Key Management).
- Multisig: a wallet whose spending needs signatures from m of n keys, enforced by Bitcoin script or by a contract such as Safe (Keys, Signing & Key Management).
- Native asset: a chain's own coin (BTC, ETH, SOL), kept by the protocol and used to pay fees, as opposed to a token kept by a contract (Tokens & Token Standards).
- Nonce (account): the sequential transaction number an account signs into each transaction; one stuck nonce blocks every later one (Blockchains for Platform Engineers).
- Paymaster: an ERC-4337 contract that pays a user operation's gas, sponsored or in exchange for a token (Wallets).
- Permit: an off-chain signature that sets an ERC-20 allowance (EIP-2612), or a Permit2 signature authorizing transfers through Uniswap's Permit2 contract (Tokens & Token Standards).
- Policy engine: the service before a signer that evaluates the decoded transaction against allowlists, limits and approval rules, where an explicit deny wins (Keys, Signing & Key Management).
- Price mark: the price a platform values a position at, from a documented methodology over several sources with staleness limits (Chain Data & Indexing).
- Proxy (upgradeable contract): a contract that forwards calls to a replaceable implementation, with the implementation and admin at EIP-1967 storage slots (Tokens & Token Standards).
- PSBT (partially signed Bitcoin transaction): the BIP-174 format that carries an unsigned transaction and its inputs between signers, including offline ones (Keys, Signing & Key Management).
- Rebasing token: a token whose balances change without transfers as the protocol reports rewards or penalties, as stETH does (Tokens & Token Standards).
- Reorg (reorganization): a chain replacing its most recent blocks with a different sequence, which can remove a transaction that had been seen in a block (Blockchains for Platform Engineers).
- Replace-by-fee (RBF): replacing an unconfirmed Bitcoin transaction with one spending the same inputs at a higher fee; default for any transaction since Bitcoin Core 28.0 (Blockchains for Platform Engineers).
- Rollup: a chain that executes transactions itself and posts its data and a proof or challengeable claim to Ethereum, optimistic or ZK (Layer 2s, Bridges & Cross-Chain).
- Rollup stage: ETHBEAT's (formerly L2BEAT's) 0 to 2 rating of how far a rollup depends on its operators rather than code (Layer 2s, Bridges & Cross-Chain).
- Sequencer (rollup): the operator that orders a rollup's transactions and gives quick confirmations that are final only once the batch is final on Ethereum (Layer 2s, Bridges & Cross-Chain).
- Smart account: a wallet whose rules are contract code (ERC-4337, or an EOA delegated under EIP-7702) (Wallets).
- SPL token and Token-2022: Solana's token program and its Token Extensions successor, whose optional extensions include transfer fees, default-frozen accounts, transfer hooks and a permanent delegate (Tokens & Token Standards).
- Trace: the call frames an EVM transaction executed, the only place native transfers made by contracts appear (Chain Data & Indexing).
- UTXO (unspent transaction output): an output a Bitcoin transaction created and no later transaction has spent; a wallet's balance is the sum of the UTXOs its keys can spend (Blockchains for Platform Engineers).
- Virtual size (vsize): a Bitcoin transaction's weight divided by four, the unit fee rates are quoted in (sat/vB) (Blockchains for Platform Engineers).
- WalletConnect: a protocol that pairs an app with a wallet by URI or QR code and relays encrypted signing requests over a session (Wallets).
- xpub (extended public key): a BIP-32 public key with its chain code, from which non-hardened child addresses can be derived without spend ability (Keys, Signing & Key Management).