Stablecoin Infrastructure Glossary

A blockchain is a type of distributed ledger in which transaction records are grouped into ordered data structures, commonly called blocks, and linked through cryptographic references according to the network's consensus rules.

A blockchain bridge is a protocol or service that communicates asset or state information between otherwise separate blockchain networks and enables corresponding value or messages to be represented or acted on across them.

A consensus mechanism is the protocol through which distributed network participants agree on valid transactions, ordering, and the authoritative state of a blockchain or distributed ledger.

Decentralized finance, or DeFi, refers to financial services delivered through blockchain-based applications and smart contracts, with substantial parts of transaction execution governed by software.

Distributed ledger technology, or DLT, is a set of technologies that allow multiple nodes or participants to share, synchronize, and update a common ledger under agreed rules.

Gas fees are transaction charges paid for computation, data storage, or other use of network resources on blockchains that use a gas-based fee model.

Interoperability is the ability of separate blockchain, ledger, or payment systems to exchange information, assets, or transaction state in a coordinated and reliable way.

A Layer 1 blockchain is the base blockchain protocol that maintains its own consensus, ledger state, transaction ordering, and native settlement rules.

Layer 2 scaling refers to protocols built on top of a base blockchain that process or aggregate transactions with less direct Layer 1 work while relying on the base chain for specified security, settlement, data, or dispute functions.

A node is a computer or software process that participates in a blockchain or distributed ledger network by performing one or more functions such as receiving, verifying, storing, or relaying transactions and ledger data.

A blockchain oracle is a mechanism that supplies smart contracts with data or computation originating outside the blockchain's native state.

Proof of stake is a family of blockchain consensus mechanisms in which participants' eligibility or influence in proposing, validating, or attesting to blocks is tied to cryptocurrency or other value committed as stake.

Proof of work is a family of blockchain consensus mechanisms in which participants expend computational effort to compete for the right to propose blocks and extend the accepted transaction history.

A smart contract is program code deployed to a blockchain or distributed ledger that changes ledger state according to predefined rules when it is invoked and the required conditions are satisfied.

A validator is a network participant with a defined role in verifying and contributing to consensus on transactions, blocks, or ledger state.