Parcl Web3 Glossary
Written by Conor Pritchard, Content Marketer
We’re not a fan of jargon or technical phrases when they’re not needed. However, you’re not going to escape them while researching Web3 projects. We’ve created an ever-growing list of terms you’ll see pop up on our site — and elsewhere — now and again. If we’re going to use them, we might as well explain their meaning.
We don’t just focus on the technical details, the buzzwords, and the industry jargon. We explain things simply and in detail so that people thoroughly can understand the logic and idea behind Parcl and our blockchain infrastructure. We need to present ourselves in words & imagery that even non-technical people outside the crypto industry can understand.
For Crypto, Blockchain, and the whole industry to grow and thrive, there is a necessity to become friendly to non-tech users. We need extra effort to educate our target audience.
A normal person should be able to understand what Parcl is about after having a look at our homepage. Having a real concept that people can actually grasp will help with marketing and communication, but this glossary will help fill in the gaps for folks new to Web3 phrases and terminologies.
Please note that this glossary will be ever-changing as we begin building out our website and publishing more content.
Airdrops are used to distribute a project’s native tokens or reward a community with other cryptocurrencies. They’re mainly used as a marketing tool to incentivize community growth.
AMM stands for automatic market maker. They allow digital assets like Solana to be traded automatically and without permission, rather than relying on regular buyers and sellers. A liquidity pool is when AMM users supply the pool with crypto tokens, creating immediate liquidity. The liquidity providers are rewarded by receiving a percentage of the fees.
An application programming interface (API) allows various computers or programs to connect and speak to each other.
A digital record of information. Once information is entered onto this ledger, it is impossible to alter or censor the data after insertion into the Blockchain.
An application or system that is controlled by one single authority. Facebook owns and runs Facebook, Instagram, and Whatsapp as a central authority, and only they have control over how these applications operate.
Collateralization is when you use one asset as insurance to gain a loan of another asset.
A digital currency that uses cryptographic technology to ensure security and trust.
A system that distributes decision-making rights to multiple individuals rather than a central figure or group. These individuals work together to create change within a decentralized organization.
DeFi stands for decentralized finance. DeFi is the alternative to centralized financial institutions like Banks.
Decentralized Exchange (DEX)
An exchange that allows peer-to-peer cryptocurrency transactions which don’t require an intermediary.
A financial instrument where your assets are held by a third party, which ensures the safety of funds during a deal.
A gas fee is a payment all users must make in order to complete any transaction on a particular blockchain. Solana is famously known for its significantly cheaper transaction fees than its competitor Ethereum.
An increase in value or profit of an asset.
Hold on for dear life, otherwise known as hodl, is an investment strategy that involves holding your investment no matter how volatile the market is.
The inability to be changed.
A general increase in prices and a reduction in the purchasing power of your money.
Liquidity is the term used to describe the speed at which an asset is traded on a financial market. To trade an asset, there must be a steady supply of both buyers and sellers of an asset.
Liquidity pools are cryptocurrency funds that facilitate the 24/7 trading of assets on decentralized exchanges.
Liquidity providers fund liquidity pools with their tokens in exchange for a reward fee.
In simple terms, minting means creating something. For example, you can mint an NFT or new cryptocurrency. In blockchain terms, this means to validate or record information on a blockchain.
The metaverse is a digital reality that contains most real-world aspects like real estate, jobs, and material goods like shoes, clothes, etc.
Non-Fungible Token. A collection of data that is unique and cannot be altered. NFT’s usually come in the form of Art, Music, or Video. NFT’s are used as a form of verification of authenticity as their code cannot be altered. Therefore you’d know if you had a counterfeit as the original artwork’s data is stored on the Blockchain.
An oracle takes data from the real world, such as weather, and communicates this to the Blockchain. If a hurricane destroys a row of houses, an insurance company could set a smart contract on the Blockchain to send payments immediately to these victims by using data collected from the oracle.
Parcl Indexes are a digital representation of the price per square foot in a given geographic area that has been collateralized by crypto assets.
Synthetic assets are tokenized derivatives that mimic the price of their underlying asset. For example, if you created a synthetic asset for Apple stock, it’d allow you to trade the synthetic version rather than the actual stock. With Parcl, you will be able to trade a synthetic representation of the price return of your favorite neighborhoods.
Smart contracts are agreements written in code between two parties. Smart contracts are built and stored on decentralized blockchains and cannot be reversed once executed.
Solana is a blockchain known for its fast transaction times and low fees. It hosts decentralized applications and is a rival to the Ethereum Blockchain.
A cryptocurrency backed by a stable asset such as gold or pegged to a fiat currency such as USD.
A wallet address is a personal address used to send or receive cryptocurrency. Each address is unique and cannot be controlled or accessed by a centralized authority, unlike a bank account.
The up and coming version of the internet, we’re currently experiencing the birth and development of Web3.
The current version of the internet is Web2. Web2 is what allows the average person to participate in the internet through the development of more user-friendly websites.
Web1 is the earliest form of the internet.
Yield farming allows users to earn passive income by investing their cryptocurrency into decentralized exchanges. If you provide liquidity into a liquidity pool to earn back a reward fee, this is known as yield farming.