A-G Glossary of NFT terms

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As the talk of investing in NFTs continue to gain ground, it is of utmost importance that we get ourselves acquainted with the necessary terms used in the NFT world.

A

Application programming interface (API) is an interface that functions as a link/bridge between two applications, allowing them to communicate with one another.

B

Buy and Hold refers to when an investor or NFT owner buys an NFT collection and holds it for a long time. 

Bridge is a protocol that connects two smart contracts of Network A and B together, allowing the users to transfer the minted NFT between themselves.

Bonding curve is a concept that creates liquidity in an NFT market. It allows the NFT owner to burn an NFT typically at a price higher than the initial list price. 

C

Cryptocurrency exchange is an online digital marketplace specifically made to buy, sell and trade cryptocurrencies. It helps users to trade fiat currencies for cryptocurrencies. 

Custodian is the third party that has control over your NFT assets. 

Centralized exchange requires full custody of the user’s funds and functions in a centralized manner. 

Collectibles refer to a standalone item or part of a series of collections available for sorting by collectors. 

Cross-chain is a transaction that occurs between two blockchains, such as Ethereum and Solana. 

D

Decentralized finance (Defi)is a technology for financial services that don’t rely on a centralized entity. 

Decentralized applications (Dapps) run on decentralized networks like Ethereum 

Decentralized autonomous organizations (DAO) are a set of rules encoded by smart contracts on the blockchain

Decentralized exchange (DEX) refers to the trading and direct swapping of tokens without the use of a centralized exchange. 

Derivatives are NFT projects that are built on other NFT projects

Dashboard is a page that shows your NFT activities. It helps users track and visualize their NFT portfolio. 

E

Ethereum is an open-source, decentralized platform built on blockchain technology like bitcoin. 

Ether is the cryptocurrency that fuels the apps on the decentralized Ethereum network. 

ERC-20is a frequently adopted standard for creating tokens on Ethereum. ER stands for Ethereum request, while 20 refers to the proposal identifier. 

ERC-721 are non-fungible tokens when compared to the well-known fungible ERC-20. What this means is that all ERC-721 are unique and not equal to one another. 

ERC-1155is a token standard that represents both non-fungible and fungible NFTs with their metadata, token supply and other attributes. 

Ethereum Naming Service (ENS) is a service that enables Ethereum users to send and receive funds through special names. 

F

Factory contract is a smart contract that produces other new smart contracts. 

Fan tokens is a cryptocurrency that gives sports club fans the chance to vote on certain decisions and earn benefits. 

Floor price is the lowest price for an NFT collection or series of collections on NFT marketplaces. 

Fractionalization is the process of dividing the ownership of an NFT between smaller participants of the NFT community. It is usually used for valuable NFTs like BAYC and CryptoPunks. 

G

Gas fees are the amount required to execute a smart contract operation to complete transactions.