Glossary
Blockchain Fundamentals
- Smart Contract
- Self-executing code on the blockchain that automatically enforces agreements.
- Deployment
- Process of publishing a smart contract to the blockchain for the first time.
- Constructor
- Special function that runs once when a contract is deployed to initialize state.
- State Variable
- Data stored permanently in the contract's storage on the blockchain.
- External Function
- Function that can be called from outside the contract by users or other contracts.
- View Function
- Read-only function that doesn't modify state and costs no gas when called directly.
- Event
- Log entry emitted by contract that can be monitored off-chain.
- Revert
- Transaction failure that undoes all state changes and returns an error message.
- Address(0)
- 0x0000000000000000000000000000000000000000 - used as burn address or null value. Also called the "zero address".
- EOA
- Externally Owned Account - wallet controlled by a private key (not a contract).
- Multisig
- Multi-signature wallet requiring multiple parties to approve transactions.
- Immutable
- Cannot be changed after deployment. Code and certain variables are permanent.
Token Economics
- Fungible Token
- Token where each unit is interchangeable (like dollars - one $1 bill is equivalent to another $1 bill).
- Deflationary
- Economic model where supply decreases over time, potentially increasing scarcity and value.
- Burn
- Permanently destroying tokens by sending them to Address(0) or otherwise removing them from circulation.
- Mint
- Creating new tokens and adding them to circulation.
- Circulating Supply
- Current totalSupply, which may be less than the original supply if tokens were burned.
Trading & Liquidity
- AMM
- Automated Market Maker - algorithm that determines swap prices using mathematical formulas instead of order books.
- Ask
- The lowest price at which a seller is willing to sell an asset; also called the "offer" price.
- Bid
- The highest price at which a buyer is willing to purchase an asset.
- CEX
- Centralized Exchange (like Coinbase, Binance).
- DEX
- Decentralized Exchange (like Uniswap, Sushiswap).
- DeFi
- Decentralized Finance - financial services without traditional intermediaries.
- Liquidity Pool
- Smart contract holding paired tokens that enables trading without a traditional order book; traders swap directly against pool reserves.
- LP
- Liquidity Provider - entity that deposits tokens into a liquidity pool in exchange for fees.
- LP Token
- Receipt token representing proportional ownership share of a liquidity pool; burned upon withdrawal.
- Constant Product Formula
- x × y = k pricing algorithm used by most AMMs where the product of token reserves remains constant through swaps.
- Concentrated Liquidity
- LP strategy (Uniswap V3/V4) where liquidity is deployed within specific price ranges for higher capital efficiency.
- Order Book
- Traditional exchange model where trades are matched between bid and ask orders placed by traders.
- Arbitrageur
- Trader who profits from price differences between markets, often rebalancing DEX pools to match external prices.
- IL
- Impermanent Loss - value lost to arbitrage when liquidity pool token prices diverge from entry ratio; becomes permanent upon withdrawal.
- Impermanent Loss
- Value lost to arbitrage when liquidity pool token prices diverge from entry ratio; becomes permanent upon withdrawal. Abbreviated as IL.
- Limit Order
- Order placed at a specific price that sits in the order book until matched; provides price certainty but no fill guarantee.
- Market Order
- Order that executes immediately at the best available price; guarantees fill but not execution price.
- Flash Loan
- Uncollateralized loan that must be borrowed and repaid within a single blockchain transaction.
- Flash Swap
- Uniswap-specific variant of a Flash Loan where borrowed tokens can be repaid with a different token; enables single-transaction arbitrage across token pairs.
- Atomic Transaction
- Transaction where all operations either succeed together or fail together; no partial execution is possible. Flash loans exploit this property—if repayment fails, the entire borrow never happened.
- EIP-3156
- Ethereum standard defining a common interface for flash loan providers, enabling interoperability between lending protocols.
- Hooks
- Uniswap V4 plugin contracts that execute custom logic before or after pool actions.
- Rug Pull
- Scam where token creators drain pool liquidity after attracting buyers, leaving victims unable to sell.
- TVL
- Total Value Locked - total value held in a protocol.
- Mempool
- Waiting area where pending transactions sit before being included in a block. On most chains, the mempool is public, meaning anyone can see transactions before they execute.
- MEV
- Maximal Extractable Value - profit extracted by reordering, inserting, or censoring transactions in a block.
- Block Builder
- Entity that constructs blocks by ordering transactions for maximum value extraction; receives tips from MEV searchers in exchange for favorable transaction placement.
- MEV Searcher
- Bot operator who identifies and captures MEV opportunities by submitting transaction bundles to block builders; jaredfromsubway.eth is a prominent example.
- Price Impact
- The change in market price caused directly by your own trade consuming available liquidity; scales with order size relative to market depth.
- Sandwich Attack
- MEV attack where a bot front-runs your trade, pushes price against you, then back-runs to capture the difference; enabled by high slippage tolerance.
- Front-Running
- Placing a transaction ahead of a known pending transaction to profit from the price movement it will cause; requires higher gas to be included first.
- Back-Running
- Placing a transaction immediately after another transaction to capture value created by it; commonly used in arbitrage and as part of sandwich attacks.
- Slippage
- The difference between expected and actual execution price caused by market movement while your order is in transit.
- Spread
- The gap between the best bid (buy) price and best ask (sell) price; represents the cost of immediate execution and market maker compensation.
- APR
- Annual Percentage Rate - simple interest return over a year, not accounting for compounding.
- APY
- Annual Percentage Yield - return over a year accounting for compounding effects.
- Lindy Effect
- Heuristic suggesting that the longer a non-perishable system has survived, the longer it's likely to continue surviving. In crypto, older battle-tested protocols are considered more reliable than new ones.
- ADL
- Auto-Deleveraging - exchange mechanism that forcibly closes profitable positions to cover losses when underwater positions cannot be liquidated normally due to insufficient liquidity.
- Auto-Deleveraging
- Exchange mechanism that forcibly closes profitable positions to cover losses when underwater positions cannot be liquidated normally due to insufficient liquidity. Abbreviated as ADL.
- Open Interest
- Total value of outstanding derivative contracts (futures, perpetuals) that have not been settled; high open interest signals leveraged exposure in the market.
- Funding Rate
- Periodic payment between long and short perpetual futures traders to keep contract prices aligned with spot prices; positive rates mean longs pay shorts.
- Market Maker
- Entity that provides liquidity by continuously posting buy and sell orders on an exchange; profits from the Spread between bid and ask prices.
- Designated Market Maker
- In traditional finance, a market maker with legal obligations to maintain orderly markets, quote continuously, and provide liquidity during stress. Crypto market makers have no such obligations. Abbreviated as DMM.
- DMM
- Designated Market Maker - in traditional finance, a market maker with legal obligations to maintain orderly markets. Crypto market makers have no such obligations.
Consensus Mechanisms
- BFT
- Byzantine Fault Tolerance - ability of a distributed system to reach consensus even when some nodes fail or act maliciously; tolerates up to 33% faulty nodes.
- Byzantine Fault Tolerance
- Ability of a distributed system to reach consensus even when some nodes fail or act maliciously; tolerates up to 33% faulty nodes. Abbreviated as BFT.
- Byzantine Generals Problem
- Theoretical problem describing how distributed nodes can reach consensus when some participants may be dishonest; solved by BFT consensus mechanisms.
- pBFT
- Practical Byzantine Fault Tolerance - consensus algorithm introduced in 1999 that made BFT viable for real systems through a three-phase protocol (pre-prepare, prepare, commit).
- Practical Byzantine Fault Tolerance
- Consensus algorithm introduced in 1999 that made BFT viable for real systems through a three-phase protocol (pre-prepare, prepare, commit). Abbreviated as pBFT.
- Tendermint
- BFT consensus protocol used by Cosmos that provides absolute finality with linear view change complexity; requires mandatory delay after leader changes.
- HotStuff
- BFT consensus protocol with linear communication complexity and optimistic responsiveness; allows correct leaders to drive consensus at network speed rather than timeout values.
- Consensus
- Agreement among distributed nodes on the current state of a blockchain; different mechanisms (PoW, PoS, BFT) make different trade-offs between decentralization, security, and performance.
- Finality
- Guarantee that a confirmed transaction cannot be reversed; BFT provides absolute finality, PoW provides probabilistic finality.
- View Change
- Process of replacing a failed or malicious leader node in BFT protocols; complexity of view changes is a major differentiator between BFT variants.
- Validator
- Node responsible for validating transactions and participating in consensus; in BFT systems, validators vote to reach agreement on blocks.
- Proof of Work
- Consensus mechanism where miners compete to solve cryptographic puzzles; energy-intensive but provides permissionless participation and probabilistic finality.
- PoW
- Proof of Work - consensus mechanism where miners compete to solve cryptographic puzzles. Abbreviated form of Proof of Work.
- Proof of Stake
- Consensus mechanism where validators are selected based on locked capital; more energy-efficient than PoW with faster finality.
- PoS
- Proof of Stake - consensus mechanism where validators are selected based on locked capital. Abbreviated form of Proof of Stake.
- Sybil Attack
- Attack where one entity creates multiple fake identities to gain disproportionate influence; BFT systems require Sybil resistance through staking or permissioned validator sets.
Security Concepts
- Oracle
- External data feed providing off-chain information (like prices) to smart contracts. Oracles bridge the gap between on-chain and off-chain data.
- DON
- Decentralized Oracle Network - distributed system of independent oracle nodes that aggregate and validate external data before delivering it on-chain, eliminating single points of failure.
- Decentralized Oracle Network
- Distributed system of independent oracle nodes that aggregate and validate external data before delivering it on-chain, eliminating single points of failure. Abbreviated as DON.
- TWAP
- Time-Weighted Average Price - price calculation averaged over a time period, used to smooth out manipulation attempts and provide more reliable oracle feeds.
- Oracle Manipulation
- Attack where an adversary corrupts the data an oracle feeds to a smart contract, often using Flash Loans to temporarily skew prices and exploit vulnerable protocols.
- Reentrancy
- Smart contract vulnerability where a contract is called recursively before state updates complete.
- ReentrancyGuard
- OpenZeppelin security pattern that prevents reentrant calls by using a mutex lock; reverts if a function is called while already executing.
- Timelock
- Delay mechanism requiring a waiting period before privileged contract actions execute.
- Timelock Queue
- Pending transactions in a timelock contract that are visible on-chain and awaiting execution after the delay period.
- M-of-N
- Multisig threshold configuration where M signatures are required out of N total signers to authorize a transaction.
- Blind Signing
- Approving a blockchain transaction without fully verifying its contents; a primary attack vector exploited in the Bybit hack.
- Safe
- Multi-signature smart contract wallet (formerly Gnosis Safe) that is among the most audited and widely used multisig implementations on Ethereum.
- Gnosis Safe
- Original name for Safe, a multi-signature smart contract wallet widely used for protocol treasuries and governance.
- Signer
- An entity holding a private key that can approve transactions in a Multisig wallet; compromising enough signers defeats multisig security.
- Governance Attack
- Exploit where an attacker gains majority voting power in a DAO or protocol governance system to pass malicious proposals; often enabled by Flash Loans when voting power can be acquired and used within a single transaction.
Proxy Contracts & Upgradeability
- Proxy Contract
- Smart contract that delegates calls to a separate implementation contract using
delegatecall; enables upgradeability by allowing the implementation to be swapped while preserving storage. - Implementation Contract
- The contract containing the actual business logic that a proxy delegates to; also called the "logic contract" or "master copy."
- Delegatecall
- EVM opcode that executes code from another contract in the caller's storage context; the foundation of proxy patterns.
- Transparent Proxy
- Proxy pattern where the proxy checks
msg.senderto route admin calls to proxy functions and user calls to the implementation; clear separation but higher gas cost. - UUPS
- Universal Upgradeable Proxy Standard (ERC-1822) - proxy pattern where upgrade logic resides in the implementation contract rather than the proxy; more gas-efficient but can be permanently bricked.
- ERC-1822
- Ethereum standard defining the Universal Upgradeable Proxy Standard (UUPS), where upgrade logic is placed in the implementation contract.
- Beacon Proxy
- Proxy pattern where multiple proxies reference a single Beacon contract holding the implementation address; updating the Beacon upgrades all associated proxies simultaneously.
- EIP-1967
- Ethereum standard defining specific storage slots for proxy contracts to store implementation, admin, and beacon addresses; prevents storage collisions with implementation variables.
- Storage Collision
- Vulnerability where proxy and implementation contracts use the same storage slot for different variables, causing data corruption during delegatecall execution.
- Initializer
- Function that replaces the constructor in upgradeable contracts; must be called once after deployment to set initial state since constructors don't work with proxies.
- Storage Layout
- The ordered assignment of state variables to storage slots; must be preserved across upgrades or existing data becomes corrupted.
Cross-Chain & Bridges
- Bridge
- Infrastructure that transfers assets or data between blockchains that cannot natively communicate; introduces trust assumptions in exchange for interoperability.
- Cross-Chain Bridge
- Infrastructure that transfers assets or data between blockchains that cannot natively communicate; introduces trust assumptions in exchange for interoperability. Also called Bridge.
- Wrapped Token
- Representation of an asset from another blockchain, backed by the original asset locked in a bridge contract; value depends on bridge solvency.
- Lock and Mint
- Bridge mechanism where tokens are locked on the source chain and equivalent wrapped tokens are minted on the destination chain.
- Burn and Mint
- Bridge mechanism where tokens are burned on the source chain and native tokens are minted on the destination chain; used by Circle's CCTP for USDC.
- Canonical Bridge
- Official bridge operated by an L2 or blockchain team that inherits the security properties of the underlying chain; generally safer than third-party bridges.
- Validator Bridge
- Bridge secured by a committee of validators who attest to cross-chain events; security depends on honest majority assumption.
- IBC
- Inter-Blockchain Communication - Cosmos protocol enabling native cross-chain communication without additional trust assumptions beyond the connected chains.
Ethereum-Specific
- ERC20
- Token standard for fungible tokens on Ethereum. Defines functions like transfer, balanceOf, approve, etc.
- Gas
- Fee paid to execute transactions on Ethereum and EVM-compatible chains, measured in Gwei.
- Gwei
- Unit of ETH used for gas pricing. 1 Gwei = 0.000000001 ETH (10^-9 ETH).
- Wei
- Smallest unit of ETH. 1 ETH = 10^18 Wei. Token amounts typically use 18 decimals similarly.
DNZN Contract Terms
These terms are specific to contracts analyzed by DNZN.
- TOTAL_SUPPLY
- Immutable variable storing the original maximum supply set at deployment.
- presaleWallet
- Address that received tokens allocated for presale.
- presaleAllocation
- Amount of tokens allocated to presale wallet at deployment.
- Renounce Ownership
- Permanently give up ownership, making contract ownerless and fully decentralized.
- Transfer Ownership
- Change owner to a different address.
- Ownable
- OpenZeppelin pattern providing basic ownership with transfer/renounce functions.