# 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](https://www.syntaqx.com/books/investing-and-digital-assets/blockchains-for-engineers#accounts-and-nonces)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/wallets#approval-phishing-drainers-and-address-poisoning)).
- **Allowance (approval):** the amount an ERC-20 holder has authorized a spender to move with `transferFrom`, set by `approve` and kept until spent or reset ([Tokens & Token Standards](https://www.syntaqx.com/books/investing-and-digital-assets/tokens-and-standards#approvals-worked)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/tokens-and-standards#spl-tokens-and-token-extensions)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/blockchains-for-engineers#eip-1559-on-ethereum)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/layer-2s-and-bridges#data-on-ethereum-blobs)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/layer-2s-and-bridges#designs)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/layer-2s-and-bridges#designs)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/layer-2s-and-bridges#withdrawal-delays-and-what-final-means-on-a-rollup)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/blockchains-for-engineers#child-pays-for-parent)).
- **Commitment level:** how settled a Solana block is (processed, confirmed, finalized); under Alpenglow, confirmed and finalized are the same ([Blockchains for Platform Engineers](https://www.syntaqx.com/books/investing-and-digital-assets/blockchains-for-engineers#solana-commitment-levels)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/keys-and-signing#safe-on-evm-chains)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/wallets#approval-phishing-drainers-and-address-poisoning)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/layer-2s-and-bridges#messaging-networks)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/blockchains-for-engineers#eip-1559-on-ethereum)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/wallets#eip-7702)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/wallets#passkey-and-embedded-wallets)).
- **EOA (externally owned account):** an Ethereum account controlled by a private key rather than by contract code ([Wallets](https://www.syntaqx.com/books/investing-and-digital-assets/wallets#browser-and-mobile-wallets)).
- **ERC-20:** the standard interface for fungible tokens on EVM chains: balances, transfers, approvals and the `Transfer` and `Approval` events ([Tokens & Token Standards](https://www.syntaqx.com/books/investing-and-digital-assets/tokens-and-standards#erc-20)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/wallets#erc-4337)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/tokens-and-standards#nfts-erc-721-and-erc-1155)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/chain-data-and-indexing#event-logs)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/tokens-and-standards#fee-on-transfer-tokens)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/blockchains-for-engineers#finality-per-chain)).
- **Fork point:** the last block two competing branches share, where reorg-safe ingestion rewinds to ([Chain Data & Indexing](https://www.syntaqx.com/books/investing-and-digital-assets/chain-data-and-indexing#reorg-safe-ingestion)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/keys-and-signing#bip-44-a-worked-path)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/keys-and-signing#bip-32-derivation-and-the-hardened-boundary)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/keys-and-signing#hd-wallets)).
- **Key ceremony:** the scripted, witnessed event in which custody keys or shares are generated, backed up, refreshed or destroyed ([Keys, Signing & Key Management](https://www.syntaqx.com/books/investing-and-digital-assets/keys-and-signing#key-ceremonies)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/blockchains-for-engineers#mempools)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/keys-and-signing#bip-39-the-seed-phrase)).
- **MPC (threshold signatures):** signing in which parties holding key shares jointly produce one ordinary signature without ever assembling the key ([Keys, Signing & Key Management](https://www.syntaqx.com/books/investing-and-digital-assets/keys-and-signing#mpc-and-threshold-signatures)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/keys-and-signing#multisig)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/tokens-and-standards#native-assets-and-tokens)).
- **Nonce (account):** the sequential transaction number an account signs into each transaction; one stuck nonce blocks every later one ([Blockchains for Platform Engineers](https://www.syntaqx.com/books/investing-and-digital-assets/blockchains-for-engineers#accounts-and-nonces)).
- **Paymaster:** an ERC-4337 contract that pays a user operation's gas, sponsored or in exchange for a token ([Wallets](https://www.syntaqx.com/books/investing-and-digital-assets/wallets#erc-4337)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/tokens-and-standards#permits)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/keys-and-signing#policy-engines-and-quorum-approvals)).
- **Price mark:** the price a platform values a position at, from a documented methodology over several sources with staleness limits ([Chain Data & Indexing](https://www.syntaqx.com/books/investing-and-digital-assets/chain-data-and-indexing#a-mark-methodology)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/tokens-and-standards#upgradeable-proxies-and-admin-keys)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/keys-and-signing#bitcoin-script)).
- **Rebasing token:** a token whose balances change without transfers as the protocol reports rewards or penalties, as stETH does ([Tokens & Token Standards](https://www.syntaqx.com/books/investing-and-digital-assets/tokens-and-standards#rebasing-tokens)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/blockchains-for-engineers#reorgs)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/blockchains-for-engineers#replace-by-fee)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/layer-2s-and-bridges#optimistic-and-zk)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/layer-2s-and-bridges#stages)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/layer-2s-and-bridges#sequencers)).
- **Smart account:** a wallet whose rules are contract code (ERC-4337, or an EOA delegated under EIP-7702) ([Wallets](https://www.syntaqx.com/books/investing-and-digital-assets/wallets#smart-accounts)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/tokens-and-standards#spl-tokens-and-token-extensions)).
- **Trace:** the call frames an EVM transaction executed, the only place native transfers made by contracts appear ([Chain Data & Indexing](https://www.syntaqx.com/books/investing-and-digital-assets/chain-data-and-indexing#traces-for-native-transfers)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/blockchains-for-engineers#unspent-outputs)).
- **Virtual size (vsize):** a Bitcoin transaction's weight divided by four, the unit fee rates are quoted in (sat/vB) ([Blockchains for Platform Engineers](https://www.syntaqx.com/books/investing-and-digital-assets/blockchains-for-engineers#fee-rates-on-bitcoin)).
- **WalletConnect:** a protocol that pairs an app with a wallet by URI or QR code and relays encrypted signing requests over a session ([Wallets](https://www.syntaqx.com/books/investing-and-digital-assets/wallets#wallet-connection)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/keys-and-signing#bip-32-derivation-and-the-hardened-boundary)).

---

Canonical URL: https://www.syntaqx.com/books/investing-and-digital-assets/glossary/chains-and-wallets