ipedia - your finance and crypto dictionary









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Unit Of Account

A unit of account is simply a medium of measurement. Although not realized by many, things are only tradable or are given a sense of value when priced, and this is only possible when there's a unit of account.


The work of the unit of account is to assign a value to something, goods and services are all priced using various units of account.


How? Typically, currencies are the most commonly utilized unit of account, the US dollar is the most globally used unit of account.


Simply, the unit of account needs to hold value, and much preferably liquid. This is because whatever is assigned a value or being priced by it can therein be bought or traded by it.


A unit of account simply attaches a value to assets, currencies, commodities, or even services and so, depending on the location, people involved, and market, the unit of account varies, so, can be anything, but with value pretty much in it to assign to others.


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Utility simply translates as being of value or profitable. Most commonly, the utility things get them priced, meaning that almost everything gets a value assigned by a specified unit of account based on their utility.


Some investment decisions are arrived at based on the utility structures of the assets, it's a common metric for investors and traders to watch out for.


Utility simply enables the flow of value.


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A validator is simply a way to say miners but for a different network, most often a proof-of-stake(PoS) blockchain.


Unlike Bitcoin which utilizes proof-of-work(PoW), a consensus mechanism based on expending computational power, several other blockchains use more energy-friendly algorithms like proof-of-stake (PoS), delegated proof-of-stake(DPoS), proof-of-history(PoH), and many others.


Validators simply validate blocks, by this, verify transactions and keep the network secure. Just as Bitcoin miners earn block rewards, validators also earn rewards for keeping the ledger secure.


However, the rewards vary, depending on the emission structure of the specified distributed ledger or network.


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Venture Capital(VC)

Venture capital(VC) is typically financing offered to most startup companies to help them scale or grow.


These funds are often offered by investors from investment banks, individual investors, and other financial institutions.


These investors often gain equities or as with the cryptocurrency ecosystem, these investors would get tokenscoins, or other digital assets related to the project, thus, directly having an influence on the decision-making or governance system.


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Volatility has to do with the rate of change of an asset market or price value. Simply, when an asset changes in price value much frequently as cryptocurrencies, they are termed volatile.


Most digital assets are volatile, despite the risk, these assets sometimes offer diverse opportunities to grow one's capital or earn profits.


Cryptocurrencies are termed extremely volatile as their price values can change rapidly in seconds to minutes following the change in trading volumes or cash flow.


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Voting Shares

Voting shares are basically shares or stocks that give the beholder the right to vote on matters or affairs of the company invested.


Similarly, cryptocurrency blockchains and networks have similar governance integration, which in most cases, is better.


For example, stakeholders on the Ethereum blockchain hold right to not only become a validator but also to influence other affairs on the network or protocol.


With Bitcoin, where proof-of-work(PoW) is the consensus mechanism used, unlike Ethereum proof-of-stake(PoS), miners on the Bitcoin network use their computational power, more commonly called the hash rate to influence the affairs of the network.


Miners can vote on Bitcoin improvement proposals(BIP) other than just mining bitcoin. Typically, the higher a miner's hash rate which means more mining rigs, the bigger the influence he has on the network.


While on Ethereum, the higher the stake, the more influence a validator has. When it comes to distributed ledgers, these algorithms are set to secure the network and broaden the spectrum of its decision-making.


However, concerns over hash rate, token or coin-based governance structure have mostly been the likelihood of a 51% attack, where a miner, validator, or witness has more than 50% control of the network's voting influence.


Blockchains like Bitcoin and Ethereum have been asserted to be an unlikely target for such attacks as they are currently not cost-efficient to plot an attack.


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Wash Trading

Wash trading is a misleading trade practice that involves the buying and selling of a specific digital asset, solely for the purpose of manipulating the markets.


Wash traders often have the agenda to get people to believe the trading volumes are real, thus creating a buzz and often luring investors as the FOMO will quickly spread.


This may be factored into pump-and-dump schemes as these players may attempt to create a buzz by manipulating the markets.


However, in the cryptocurrency ecosystem, wash trading may be more practical on NFT marketplaces, where individuals or cooperatives may wash trade these non-fungible assets so as to draw the attention of the larger community.


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A cryptocurrency whale or crypto whale or simply whale is basically an individual that owns a large amount of a particular crypto asset.


Typically, the name whale is given as a reference to the "big mammal", whereas these investors are considered "big", plus a whale(as in the animal) can cause a massive effect on its environment just as the investor can create a market effect on a single purchase or layoff. 


A whale typically owns about 10% of the circulating supply of a coin or token, some reference 5% as a whale similarly.


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White Paper

A white paper is an introductory document containing data or information about a company's project, specifically highlighting features, products, and services to be offered on rollout.


A white paper serves as public awareness of what's to be expected, as we've seen with cryptocurrency white papers, the basic concepts of the network or blockchain, the algorithms, and the currency models, be it tokens or coins are often outlined and discussed to enlightened the public, most often as one of the first forms of advertisement.


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A yield is typically the amount of money, income, or revenue generated from an investment over a contract-specified time.


Yields are often presented in percentage of the total sum invested, the total return on investment (ROI).


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Yield Farming

Yield farming practically involves the staking or lending of cryptocurrency to earn interest on the capital.


The practice may be on a centralized exchange(CEX) or a decentralized exchange (DEX) or a DeFi platform. Yields are offered in various product types ranging from single staking pools(often a time lock) and liquidity pools.


Yields are often presented in Apr or Apy and its major source of income to pay participants are swaps fees, transaction fees, and product management fees.


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