Hearing crypto enthusiasts speak in an entirely different language can make the industry feel like a walled garden. Originating from chat rooms with a small group of supporters in 2010, crypto has grown into a strong community with memes and jargon that make up an integral part of the industry's daily discussions.
To understand the basics of crypto, one would have to learn the essential terms. This article will equip you with the basic vocabulary needed to start your crypto journey.
The term HODL stands for “hold for dear life” and comes from the Bitcoin community. HODL was found in a Bitcointalk forum (a place that bears Satoshi Nakamoto’s first post on Bitcoin). In December 2013, a user named GameKyuubi wrote a post on his unfortunate Bitcoin trade during a period of increased volatility and the title of the post was named “I AM HODLING”. The word HODL is a typo for the word “hold”, but the term was quickly adopted by the Bitcoin community and signaled a strong conviction towards the asset as holders used the term to imply that they’ll never sell.
BUIDL is an intentional misspelling of the word “build”. The term essentially urges crypto enthusiasts to focus on building new projects, instead of passively hodling the existing assets. The term became popular during the 2018-2020 bear cycle, when the industry was experiencing low interest from investors while the community was actively committing resources into building the infrastructure and developing new applications.
In the crypto community, the term “ape” is used to describe an individual who buys tokens without carrying out proper research or due diligence on the project. To ape means to quickly enter a position in a certain token usually by trusting the token's active marketing on different media channels. This is a short-term speculative trading strategy (or the lack of it 👀) that involves buying an asset that you expect to go up in price rapidly.
RUGPULL refers to figuratively pulling the rug under unsuspecting traders. It specifically stands for a type attack that is unique to automated market maker (AMM) exchanges. In an AMM exchange like Uniswap, users can earn trading fees by providing liquidity to a specific token pool. A rugpull takes place when malicious individuals create a token and list it on a DEX like Uniswap, then pair it with another coin like ETH, and wait for unsuspicious and inexperienced investors to swap ETH for the listed token. The creators, who remain the major token holders, swap their assets for ETH and withdraw everything from the liquidity pool, driving the token’s price to zero.
TEST IN PROD
Test in Prod is commonly used by developers in crypto who adopt a software development practice of releasing a project “raw” and testing it in the field, rather than internally in a staging environment. It became popular after Yearn Finance founder Andre Cronje introduced this approach of testing the application when it's already released, shortcutting the production cycle. In his following interviews, Cronje has clarified that the phrase isn't meant to be a joke but iis supposed to encourage users to be cautious and carry out careful research on a project prior to comminiting funds.
FUD is an abbreviation for fear, uncertainty and doubt. It is used to describe an action of influencing public perception about certain tokens to force people out of their positions. FUD can be negatively coordinated PR or even negative rumors spread through social media.
All time high (ATH) is used to describe the highest price that has ever been reached by a particular asset. Even though the term is used in traditional financial markets, it's popular in crypto markets due to their high volatility and regular ATH prices in a bull market.
The term "whale" refers to an individual who holds a large amount of capital in a particular asset or is just a high net worth individual. For instance, Michael Saylor can be considered a Bitcoin whale since he owns a large amount of Bitcoin. Whales can potentially manipulate asset valuations, especially for illiquid assets where large orders will impact price dramatically.
The culture in the crypto space often endorses anonymity. Community members and teams building in crypto sometimes have anonymous nicknames and try not to expose their real identities. The term doxxing stands for an intentional exposure of someone’s identity online, typically with malicious intent.
Degen, short for "degenerate", is often used in gambling to describe people who bet too much or regularly lose. This term has been adopted to pronounce a subculture within the crypto community that interprets finance as a game and embraces projects that tread a fine line between a joke and a scam.
Similar to traditional finance, alpha refers to an asset which provides a better return, often in excess compared to the overall market during a specific period. In this regard, an alpha outpaces the market index or benchmark. In the context of crypto, it is common to refer to a project as ‘alpha’ when it's still early to become its adopter and thereby benefit from higher than normal returns.
Crypto winter refers to a bearish trend in a market cycle. During a crypto winter, token prices will keep dropping whereas in a bullish trend tokens will see massive gains. The duration of a bear or bull market is unknown and people form opinions based on personal perspective.
Twitter and Discord have emerged as the main channels of communication among crypto enthusiasts who engage in open discussions on the space. Staying in the loop on this rapidly evolving industry is probably the most proactive step for a beginner to take before drifting into trading. Knowing the terms outlined above will help you decode important signals in the industry and help you make better decisions as you start your journey.
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