// GLOSSARY

    Web3, Tokenization & Private Credit Glossary

    Plain-language definitions of the terms founders and investors meet in blockchain, token design, asset tokenization, private credit and digital asset trading. Each entry explains how the concept works, gives a worked example and links to related terms.

    Most important terms to know

    Loan-to-Value (LTV)

    Loan-to-value (LTV) is the size of a loan divided by the appraised value of the collateral securing it, expressed as a percentage. A lower LTV means a larger equity cushion protecting the lender.

    MOIC

    MOIC (multiple on invested capital) is the total value an investment has returned or is currently worth divided by the amount invested. A 3.0x MOIC means each dollar invested is now worth three dollars.

    OTC Trading

    OTC (over-the-counter) trading is buying or selling assets directly between two parties, usually through a dealer or desk, instead of on a public exchange order book. It is commonly used for large crypto trades.

    Real-World Assets (RWA)

    Real-world assets (RWA) are physical or traditional financial assets, such as real estate, loans, bonds or commodities, whose ownership or economic rights are represented by tokens on a blockchain.

    Stablecoin

    A stablecoin is a digital token designed to keep a steady value relative to a reference asset, most often the US dollar, by holding reserves, using over-collateralized crypto, or relying on algorithmic supply rules.

    Token Vesting

    Token vesting is a schedule that releases allocated tokens to their holders gradually over time instead of all at once, typically used for teams, investors and advisors to align incentives and limit sudden selling.

    A

    Airdrop

    An airdrop is a distribution of free tokens to selected wallets, usually to reward early users of a product, seed a community or promote a launch, with the tokens arriving directly in recipients' wallets.

    AML

    AML (anti-money laundering) is the set of laws, controls and monitoring that financial businesses apply to detect and block proceeds of crime from entering the financial system, including screening, transaction monitoring and suspicious activity reporting.

    Angel Round

    An angel round is an early funding stage backed by individual investors — angels — who invest personal capital in exchange for equity or convertible instruments, typically before institutional funds commit.

    Asset Tokenization

    Asset tokenization is the process of representing ownership or economic rights in an asset — real estate, loans, funds, commodities — as digital tokens on a blockchain, under a legal structure that ties the token to the asset.

    B

    Blockchain

    A blockchain is a shared database maintained by many independent computers, where records are grouped into blocks cryptographically linked in sequence. Once data is recorded, changing it without everyone noticing is practically impossible.

    C

    Circulating Supply

    Circulating supply is the number of tokens that are liquid and available to the market right now — excluding locked, vested-not-yet-released, burned and treasury-held tokens.

    Cross-Chain Bridge

    A cross-chain bridge moves tokens or data between two blockchains, usually by locking the asset on the source chain and minting a representative version on the destination chain.

    Crypto Wallet

    A crypto wallet stores the private keys that control tokens on a blockchain. It does not hold the assets themselves — the blockchain does — but whoever controls the keys controls the assets.

    D

    DAO

    A DAO (decentralized autonomous organization) is an organization whose rules are encoded in smart contracts and whose members vote with tokens on proposals, such as treasury spending or protocol changes.

    DeFi

    DeFi (decentralized finance) is a set of financial services — trading, lending, savings — built as smart contracts on public blockchains, so users interact with protocols directly instead of through banks or brokers.

    Digital Asset Custody

    Digital asset custody is the safekeeping of tokens and private keys by a specialized provider, with controls — segregation, insurance, audits — designed so that client assets survive the provider's own failures or attacks.

    E

    ERC-20

    ERC-20 is the most widely used standard for fungible tokens on Ethereum-compatible blockchains, defining a common interface for balances and transfers so wallets, exchanges and contracts can support any ERC-20 token uniformly.

    ERC-3643

    ERC-3643 is a permissioned token standard for Ethereum-based chains that allows transfers only between wallets whose owners have passed on-chain identity and compliance checks, making it the leading standard for security and RWA tokens.

    F

    Fractional Ownership

    Fractional ownership splits ownership of an asset into smaller units that multiple people can hold, so investors can participate with amounts far below the price of the whole asset.

    Fully Diluted Valuation (FDV)

    Fully diluted valuation is the token's current price multiplied by its maximum total supply — the value the project would have if every token that can ever exist were trading at today's price.

    G

    Gas Fees

    Gas fees are the payments users make to have their transactions processed on a blockchain, compensating validators for computation and storage and preventing spam by making every action cost something.

    K

    KYC

    KYC (know your customer) is the process of verifying a client's identity — who they are, where they live and, in extended forms, the source of their funds — before allowing them to open an account, invest or transact.

    L

    Layer 1

    A layer 1 is a base blockchain that processes and finalizes its own transactions, such as Bitcoin, Ethereum or Solana. Everything built on top of it — tokens, smart contracts, layer 2s — depends on its security.

    Layer 2

    A layer 2 is a network built on top of a layer 1 that processes transactions cheaper and faster, then posts compressed data or proofs back to the base chain so it inherits the layer 1's security.

    Liquidity Pool

    A liquidity pool is a smart contract that holds two or more assets so traders can swap against it at prices set by a formula, instead of matching with another trader in an order book.

    Loan-to-Value (LTV)

    Loan-to-value (LTV) is the size of a loan divided by the appraised value of the collateral securing it, expressed as a percentage. A lower LTV means a larger equity cushion protecting the lender.

    Lockup Period

    A lockup period is a fixed window during which tokens that a holder already owns cannot be sold or transferred, typically applied after an airdrop, listing or delivery to limit immediate selling pressure.

    M

    MOIC

    MOIC (multiple on invested capital) is the total value an investment has returned or is currently worth divided by the amount invested. A 3.0x MOIC means each dollar invested is now worth three dollars.

    Multisig Wallet

    A multisig wallet is a blockchain account that requires multiple private keys to approve a transaction, such as 3 of 5 signers, so that no single person or compromised key can move the funds alone.

    O

    Oracle

    An oracle is a service that brings verified off-chain data — prices, interest rates, asset valuations, event outcomes — onto a blockchain so smart contracts can react to the real world.

    OTC Desk

    An OTC desk is a specialized trading business that quotes and executes large bilateral trades in digital assets, providing liquidity and pricing that public exchanges cannot offer for size.

    OTC Trading

    OTC (over-the-counter) trading is buying or selling assets directly between two parties, usually through a dealer or desk, instead of on a public exchange order book. It is commonly used for large crypto trades.

    P

    Permissioned Token

    A permissioned token is a token whose smart contract enforces rules about who may hold or receive it — verified identity, investor category, jurisdiction — rejecting transfers that violate them.

    Pitch Deck

    A pitch deck is the concise presentation a company uses to introduce itself to investors — problem, solution, market, traction, team and ask — optimized to earn a follow-up meeting rather than close on the spot.

    Primary Market

    The primary market is where securities are sold for the first time — issuer directly to investor — with proceeds going to the issuer, as in an offering, private placement or token sale.

    Proof of Reserves

    Proof of reserves is an independent verification that an issuer actually holds the assets backing its obligations — for stablecoins, exchange balances or asset-backed tokens — usually through attestations or on-chain evidence.

    R

    Real-World Assets (RWA)

    Real-world assets (RWA) are physical or traditional financial assets, such as real estate, loans, bonds or commodities, whose ownership or economic rights are represented by tokens on a blockchain.

    S

    SAFE

    A SAFE (Simple Agreement for Future Equity) is a short funding contract where an investor provides capital now in exchange for the right to receive equity in a future priced financing round, at terms fixed today.

    SAFT

    A SAFT (Simple Agreement for Future Tokens) is a contract where an investor funds a project today in exchange for tokens the project will deliver once its network launches — before the token exists.

    Secondary Market

    The secondary market is where existing securities change hands between investors after issuance — the issuer is not a party — through exchanges, ATSs or OTC transfers.

    Security Token

    A security token is a digital token that legally qualifies as a security — giving the holder an investment interest such as equity, debt or profit participation — and is therefore issued and traded under securities regulation.

    Smart Contract

    A smart contract is a program stored on a blockchain that runs automatically when its conditions are met, holding and moving assets according to code rather than through a human intermediary.

    Special Purpose Vehicle (SPV)

    A special purpose vehicle is a legal entity created for one narrow purpose — typically to hold a specific asset or originate a specific debt — isolating it from the parent company's other risks and creditors.

    Stablecoin

    A stablecoin is a digital token designed to keep a steady value relative to a reference asset, most often the US dollar, by holding reserves, using over-collateralized crypto, or relying on algorithmic supply rules.

    Staking

    Staking means locking a blockchain's native tokens to help secure and validate the network, in exchange for rewards, or more broadly depositing tokens in a protocol to earn yield.

    Startup Funding

    Startup funding is the process of raising capital for an early-stage company across successive rounds — pre-seed, seed, Series A and beyond — in exchange for equity, convertible instruments or tokens.

    T

    Token

    A token is a unit of value recorded on a blockchain, representing anything from a currency and a utility credit to a share in an asset. Tokens are created and transferred according to rules set by a smart contract or protocol.

    Token Generation Event (TGE)

    A token generation event is the moment a project's tokens are first created and distributed on a blockchain — the technical birth of the token, usually paired with the start of vesting schedules and initial liquidity.

    Token Unlock

    A token unlock is the moment a batch of previously locked tokens becomes transferable — a cliff ending, a monthly vesting release or a lockup expiring — adding potential sell-side supply to the market.

    Token Vesting

    Token vesting is a schedule that releases allocated tokens to their holders gradually over time instead of all at once, typically used for teams, investors and advisors to align incentives and limit sudden selling.

    Token Warrant

    A token warrant is an agreement attached to an equity investment that gives the investor the right to receive tokens — typically in proportion to their equity stake — if and when the company launches a token.

    Tokenomics

    Tokenomics is the design of a token's economy: total supply, distribution, vesting, inflation or burn mechanics and what the token is used for. It determines how supply and demand for the token behave over time.

    V

    Venture Capital

    Venture capital is professional investment funds that deploy pooled capital into high-growth companies in exchange for equity, taking board seats and governance rights, with returns coming from a few outsized successes.

    Vesting Cliff

    A vesting cliff is an initial period after the token generation event during which nothing vests. If the holder leaves or the tokens are forfeited before the cliff ends, none of the allocation vests.

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