This Part-2 thread in designed to break down the barriers of entry for every crypto participant, starting at Tier Three, which are the most common topics, all the way down to Tier Five, which are some of the most complex topics in crypto.
Protocol Owned Liquidity — PoL is a new approach toward providing liquidity pioneered by Olympus DAO. Instead of relying on incentives for LPs, the protocol sells discounted tokens to buyers who in exchange provide another token which then forms part of the protocol’s treasury.
Liquid Staking — Liquid staking allows holders of tokens to stake their assets & receive a derivative or liquid representation of that asset that can be used in dApps. Using liquid staking, ETH 2.0 stakers are able to simultaneously stake their Ethereum while remaining liquid
DAOs — A decentralized autonomous organization is an organization represented by rules encoded as a computer program that is transparent, controlled by the organizations members and not influenced by a central government.
Interoperability — Blockchain interoperability refers to the ability of different blockchain networks to exchange and leverage data between one another to move unique types of digital assets between the networks’ respective blockchains.
IPFS — The InterPlanetary File System is a protocol and peer to peer network for storing and sharing data in a distributed file system. IPFS uses content addressing to uniquely identify each file in a global namespace connecting all computing devices.
ENS — The Ethereum Name Service is a name lookup service built on $ETH that allows crypto users to translate their machine-readable addresses to human-readable addresses. You can think of it as a nickname generator for public Ethereum addresses
TIER FOUR: We’re now diving deep into the rabbit hole EVM — The Ethereum Virtual Machine (EVM) is the software platform that developers can use to create dApps on ETH. The EVM is where all ETH accounts and smart contracts live, as well as the entire state history of Ethereum.
Mempool — In blockchain terminology, a mempool is a waiting area for the transactions that haven’t been added to a block and are still unconfirmed.
Generalized Frontrunners — A generalized front runner is a bot on Ethereum that constantly scans the mempool for profitable transactions. Generalized front runners participate in Priority Gas Auctions (PGAs) with other bots in order to obtain priority of their txs in a block.
Byzantine General’s Problem — The Byzantine General’s problem refers to the ability of a server to inconsistently appear both failed and functioning, presenting different symptoms to different observers.
Sybil Attack — A Sybil attack is a type of attack on a computer in which an attacker subverts the service’s reputation system by creating a large number of pseudonymous identities and using them to gain a disproportionally large influence.
SHA-265 — SHA-256 stands for Secure Hashing Algorithm 256-bit and is used for cryptographic security. Cryptographic hash algorithms produce irreversible and unique hashes. The larger the number of possible hashes, the
smaller the chance that two values will create the same hash.
Full Nodes — Full nodes are nodes that download and check that every transaction in a blockchain is valid. This requires a lot of resources and hundreds of gigabytes of disk space, but are the most secure nodes as they can’t be tricked into accepting blocks that have invalid txs
Light Clients — If your computer doesn’t have enough resources to run a full node, then you can run a light client. A light client doesn’t download or validate any transactions, they only validate the block header, and assume that the block only contains valid txs.
Mining Pools — In the context of cryptocurrency mining, a mining pool is the pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to the probability of finding a block
Metcalf’s Law — Metcalf’s law states that a network’s value is proportional to the square of the number of nodes in a network. For example, if a network has 10 nodes, its inherent value is 100 (10x10=100).
Lindy Effect — the Lindy Effect is a theorized phenomenon by which the future life expectancy of some non-perishable things, like a technology or an age, is proportional to their current age.
Sidechain — A sidechain is a separate blockchain that is attached to its parent blockchain using a two way peg. The two way peg enables interchangeability of assets at a predetermined rate between the parent blockchain and the sidechain.
Plasma — Plasma is an Ethereum layer 2 scaling solution. It is a framework that allows the creation of “child” blockchains that use the main $ETH chain as a trust and arbitration layer.
Optimistic Rollups — Optimistic rollups use a smart contract to relay transaction data from the main $ETH chain to a layer 2 network, where a sequencer can bundle up multiple txs into a batch then submit that batch back to the main chain via a single tx.
Zero-knowledge proof — In cryptography, a ZKP is a method by which one party can prove to another party that a given statement is true while the prover avoids conveying any additional information apart from the fact that the statement is indeed true.
ZK Rollups — ZK Rollups are another kind of $ETH scaling solution that takes txs off of the $ETH chain. ZK rollups generate cryptographic proofs that prove validity of transactions. Each batch of txs contains its own validity proof which is submitted to the main chain.
Keepers — Keepers are a class of externally owned accounts that are incentivized to perform an action in a DeFi protocol. Keepers receive a reward in the form of a flat fee or a percentage of the incented action. (Ex. A keeper receives a fee for liquidating collateralized debt)
Beacon Chain — The beacon chain is an upgraded version of $ETH that will eventually replace the legacy $ETH blockchain currently in use. Its purpose is to introduce a new consensus model known as PoS & coordinate an expanded network of shards & stakers.
The Merge — The merge is the term being used for what will happen when Ethereum’s mainnet, which runs on PoW, integrates with the Beacon chain, which is a PoS chain.
TIER FIVE: Only the most esoteric of crypto knowledge MEV — Maximal Extractable Value (MEV) refers to the measure of profit a miner can make through their ability to arbitrarily include, exclude, or re-order transactions within the blocks they produce.
Sharding — Sharding refers to splitting the entire Ethereum network into multiple portions called “shards”. Each shard would contain its own independent state, massively reducing network congestion and increasing transaction throughput for Ethereum
Data Availability Proofs — Data availability proofs are a new technology that allows clients to check with very high probability that all data for a block has been published, by only downloading a very small piece of that block.
Merkle Trees — A Merkle tree is a fundamental part of blockchain technology. It is a mathematical data structure composed of hashes of different blocks of data, and which serves as a summary of all the transactions within a block.
Well that wraps up this thread from pastry.
If you made it this far, you are now a cryptocurrency expert. I hope you guys enjoyed my cryptocurrency iceberg.