A blockchain is a network that is distributed across a number of physical locations and physical machines(computers). It operates on a peer-to-peer basis, where participants (nodes)maintain a shared and immutable ledger. The ledger is commonly known as the blockchain, and this is because it consists of a chain of encrypted blocks, each containing a list of transactions. Blockchain technology is the technology of choice for Defi providers including cryptocurrencies such as Ethereum and Bitcoin.
A Decentralised Exchange (DEX) is a trading portal where users conduct peer-to-peer trades without any intermediary influence. DEX trading promotes self-custody of your own assets via a personal wallet rather than trusting the custody of your funds to a second party as with centralised exchanges.
DeFi is a term that is used to describe financial services that are delivered via a peer-to-peer network, as opposed to through a single centralised body, such as a bank. DeFi stands for Decentralized Finance and is synonymous with blockchain technology. Unlike traditional financial systems that rely on intermediaries like banks, brokerages and exchanges, DeFi leverages software and agreements that are embedded in the network, this is often explained as smart contracts on blockchains. DeFi aims to democratise access to a number of financial services by removing centralised gatekeepers and allowing individuals to transact with each other in a trustless and permissionless fashion.
A FIAT on / off ramp is the vehicle through which a trader can exchange a FIAT currency (dollars, pounds et al) into a digital currency and back again. The most common trading pairs for digital currencies are Bitcoin, Ethereum or USDT which can then be used to purchase lesser-known digital assets.
The term ‘NFT’ is an initialism for ‘Non-Fungible Token’. ‘Non-Fungible’ simply means that it is one of a kind and cannot be duplicated. NFTs can represent ownership of either real world or digital assets and are unique identification codes for ownership of said asset. These tokens are stored on the blockchain and therefore encrypted to ensure an immutable record of provenance and chain of custody. By contrast, cryptocurrencies are ‘fungible’ and like-for-like; in the same way that every dollar shares the same value, the same is the case for Bitcoin, Ethereum et al.
A Real World Asset token, or RWA, is a digital representation of ownership (full or partial) of a tangible, physically traded object in the real world but can also include concrete intellectual property. There are many categories for RWAs including real estate, rare metals, artworks and commodities as well as many others fields. Anything of economic value can be tokenised and traded on the blockchain.
‘Staking’ a cryptocurrency is similar to depositing money into a savings account which offers interest. By staking your asset for a given time those tokens are out of circulation and the user is rewarded for this in various ways depending on the asset. ADEX shares revenue from all trading fees and so by staking $ADEX users will receive a representative % of 90% of all trading fees on our exchange.
The word ‘Tokenomics’ is a portmanteau of the words ‘token’ and ‘economics’ and is used when we look to the breakdown of how cryptocurrency tokens are utilised and distributed. This is important to know as it gives us an overview on how many tokens are in or are likely to be in circulation at any given time. Tokenomics are also key to assessing the utility of a token and the benefits of holding it.
When tokens are vested they are ‘locked’ into a smart contract and are not accessible by anyone until staking conditions are met. If a percentage of tokens are vested for five years then they will not and cannot be released into circulation or transferred for those five years. Vesting contracts are transparent in that external audit teams can fully analyse them to ensure their security and compliance. A vesting period for tokens is a team commitment to the longevity of the project.
