The terms «cryptocurrency» and «blockchain» have become familiar to techies. Digital assets have emerged as a highly viable option to conventional finance tools such as bonds and equities. Most junior, technical-minded traders choose to trade cryptocurrencies on multiple platforms.
However, the list of new acronyms and terms can be confusing to a newcomer. The average individual curious about digital assets is probably going to find it difficult to understand the various concepts in the cryptocurrency industry. To understand cryptocurrency slang, you need to know the meaning of the various abbreviations included in this review.
Top 18 abbreviations
CEX stands for centralized crypto marketplace, examples are Bybit, Gemini or Binance. These centralized crypto exchanges store asset clients and provide interaction between buyers and sellers of cryptocurrency.
DEX refers to a decentralized crypto marketplace. Trading platforms of this type compare the auctions of purchasers and merchants who trade directly, without the involvement of middlemen.
DAO is a digital organization run by its members without the involvement of a central authority in the form of a CEO or board of directors. DAO implies an institutional framework of terms and conditions that are incorporated into the software and enforced via smart contracts.
DeFi is one of the most popular acronyms in the modern crypto world. DeFi means «decentralized finance», a change in the model of gaining entry to digital financial institutions. Decentralized finance means the elimination of intermediaries in the form of traditional financial institutions or other structures from the process of accessing financial services and transactions. For example, DeFs allow you to directly lend funds from creditors with no banks or credit agents involved.
dApp (decentralized application) is another commonly used acronym in the blockchain and cryptocurrency field. As the name suggests, these are decentralized versions of traditional apps that rely on a P2P net connection with no middlemen or central authority. Decentralized apps use blockchain nets as the underlying level to hold storage and validate operations.
EVM (Ethereum Virtual Machine) is a virtualized framework that enables the execution of smart contracts along with efficient administration of the back-end status of the smart contracts.
ATH (All Time High) is the historical maximum, being the highest asset price in regards to its market cap. Additionally, ATH refers to the highest value paid for the crypto asset in question.
FOMO (Fear of missing out) relates to the risk of losing out on some of the highlights in the world of cryptocurrencies. The fear of missing out creates excitement surrounding newly launched crypto assets, therefore prompting investors to look for better opportunities for profit. Also, FOMO is an emotional reaction that drives people to make impulsive decisions to buy tokens at the highest price. Experience shows that investors should not react to FOMO: it is better to wait for the market to stabilize.
FUD means «fear, uncertainty and doubt» which are 3 emotions that create instability in the crypto space. It is a strategy used to create doubt and spread misinformation about a particular transaction or the projected price of a competitor’s crypto asset.
HODL was born from a misspelling of the English verb hold. HODL means a strategic plan for holding or storing cryptocurrencies during periods of high short-term price volatility. As crypto asset values decline, owners should hold assets rather than rush to sell for fear of losses.
BUIDL is similar to HODL, because they are both misspellings or distortions of other words. BUIDL is obviously derived from the verb build. The term refers to people in the crypto community who continue to support a particular coin regardless of whether prices rise or fall. The philosophy behind BUIDL is that if you truly believe in a particular coin, you remain a supporter no matter what.
SAFU, used by crypto traders, is similar to the term «HODL» and comes from the word «safe». It means that the funds can be safely stored and you don’t want to sell them yet.
DYOR stands for «do your own research». In the world of cryptocurrencies, this abbreviation is usually used to remind investors to analyze a project before investing in it.
KYC refers to the «know your customer» rule and refers to the verification by financial institutions of the authenticity of persons utilizing its facilities. Within the crypto sphere, KYC practices are commonly used by large centralized exchanges. When registering on the platform, you are asked to provide your full name and show proof of identity, such as a passport or driver’s license.
AML (anti-money laundering) means complying with the rules, regulations and laws intended to thwart illegal money laundering. laws and regulations designed to prevent criminals from converting illegally obtained cryptocurrencies into fiat currencies.
DD (Due Diligence) is somewhat similar to DYOR (Do Your Own Research). DD is the preliminary research that should be done before closing a deal. DD helps to identify possible problems or hidden liabilities.
ATL (All Time Low) stands for the absolute worst trading value that a specific digital currency will ever reach. It is important for traders to consider historical price lows because this level of value is of concern to participants in the market.
Historical minimums (ATL) similarly present levels of value at what would-be purchasers seek to get into the market, with the hope being that the ATL is an area of support and the price will eventually rise from the current value.
ROI (return on investment) is a term you may often hear in the world of traditional finance. It is also relevant to crypto trading. ROI indicates the return you get in comparison to your original investment. This metric allows you to compare different investments and conclude which ones are more profitable.
The relevance of knowing crypto abbreviations
The crypto landscape is expanding every day, which leads to a constant addition to the crypto glossary. Not understanding cryptocurrency abbreviations can make it difficult to familiarize yourself with new phenomena. Therefore, it is important to be able to decipher crypto abbreviations: it will help in understanding the cryptocurrency market and making informed decisions.
