Crypto & DeFi
On-chain finance has its own market structure, and these explainers cover it for investors who want mechanics over hype.
The topics run from token standards like ERC-20 and ERC-4626 to automated market makers, including constant-product and concentrated-liquidity designs, plus impermanent loss, yield farming, and liquidity mining.
Stablecoins, staking, and the plumbing behind decentralized exchanges and lending fill out the picture.
Investing With Purpose focuses on how value really moves through a protocol, where the risk concentrates, and why each design exists.
By the end you can reason about an AMM, weigh the trade-offs of providing liquidity, and see the economics underneath decentralized finance instead of the marketing on top.
The ERC-20 token standard is the common interface that nearly every fungible token on Ethereum follows. It defines a…
The ERC-721 NFT standard is the interface that defines non-fungible tokens on Ethereum, where each token carries a…
The ERC-1155 multi-token standard lets a single smart contract manage many token types at once, including fungible,…
Impermanent loss is the gap between what a liquidity provider ends up with after the price ratio of a pool changes,…
Yield farming is the practice of moving crypto assets through DeFi protocols to earn returns, usually by providing…
Liquidity mining rewards are payments a DeFi protocol makes in its own token to people who supply liquidity or…
A fiat-collateralized stablecoin USDC USDT and similar tokens hold a steady value, usually 1 US dollar, by keeping real…
An algorithmic stablecoin is a token that tries to hold a fixed price, usually 1 US dollar, using code and market…
An overcollateralized stablecoin holds more value in reserve than the tokens it issues, so it can survive a fall in…
Stablecoin peg mechanisms are the rules and incentives that keep a crypto token trading at its target value, almost…
Liquid staking tokens let you stake ETH to earn rewards while keeping a tradable token you can still use. Instead of…
Proof of work mining is the original way a blockchain agrees on which transactions are real, without any central…
Proof of stake validation secures a blockchain with capital instead of electricity. Validators lock up coins as a…
DEX aggregator routing finds you the best swap price by splitting and routing a trade across many decentralized…
A wrapped token is a stand-in that represents another asset on a blockchain where the original cannot natively exist.…
A governance token in DeFi gives holders the right to vote on how a protocol is run, from fee settings to how its…
DAO treasury management is how a decentralized organization holds, protects, and spends its pooled funds, often worth…
Stablecoin velocity on-chain measures how many times each dollar of stablecoin supply changes hands over a period. It…
DEX trading volume metrics measure how much value is swapped on decentralized exchanges over a period. Because every…
Total value locked (TVL) measures the dollar value of all assets deposited in a DeFi protocol's smart contracts at a…
The NFT floor price is the lowest price at which any item in a collection is currently listed for sale. It is the…
NFT royalties are fees a creator earns each time their work resells on the secondary market. NFT royalties enforcement…
DAO voting governance is the system a decentralized autonomous organization uses to make collective decisions, usually…
The ERC-4626 tokenized vault standard defines a common interface for smart contracts that hold an underlying asset and…
A constant product AMM is an automated market maker that prices trades using the formula x*y=k, where x and y are the…
A StableSwap Curve AMM is an automated market maker tuned for assets that should trade near a fixed ratio, such as two…
Concentrated liquidity, the headline feature of Uniswap v3, lets a liquidity provider commit capital to a chosen price…
Maximum extractable value MEV is the profit a block producer or specialized bot can capture by choosing which…
A sandwich attack MEV is a trading exploit where a bot places one order just before your decentralized exchange swap…
Frontrunning MEV mempool exploitation is when a bot reads your pending transaction in the public waiting area, copies…
A flash loan DeFi product lets you borrow a large amount of crypto with no collateral, on the strict condition that you…
A perpetual swap crypto contract lets you take a leveraged long or short position on an asset with no expiry date. A…
The perpetual funding rate is a recurring payment exchanged between long and short traders that keeps a perpetual…
A prediction markets crypto platform lets people trade shares that pay out based on whether a future event happens. The…
A blockchain oracle Chainlink-style design is the bridge that lets smart contracts use real-world data, such as asset…
A TWAP oracle vs spot oracle choice is one of the most important design decisions in DeFi. A spot oracle reports the…
An optimistic rollup is a Layer 2 network that processes transactions away from Ethereum and posts a compressed record…
A ZK rollup is a Layer 2 network that bundles transactions off-chain and posts a cryptographic validity proof to…
A sequencer is the node that orders transactions on a rollup, builds Layer 2 blocks, and posts the data to Ethereum.…
EIP-1559 changed how Ethereum charges for transactions. It introduced a base fee that the protocol sets and then…
EIP-4844, known as proto-danksharding, added a new way for rollups to post data to Ethereum. EIP-4844 blob transactions…
Restaking lets you reuse ETH that is already staked on Ethereum, or a liquid staking token, to help secure additional…
Liquid restaking tokens LRT are receipts for ETH that has been staked and then restaked to secure extra services, while…
A validator slashing penalty is the protocol destroying part of a validator's staked deposit for provable misbehavior,…
MEV-Boost relayers sit between Ethereum validators and a marketplace of block builders, implementing proposer-builder…
A cross-chain bridge moves value from one blockchain to another, since chains cannot natively read each other's state.…
A token vesting cliff schedule sets the rules for when locked tokens held by a project's team and investors become…
A token unlock schedule is the full calendar of dates on which a project's previously locked tokens become tradable. It…
Tokenomics design is the practice of building the economic rules of a crypto token: how supply is created, who receives…
Protocol revenue in DeFi is the slice of user fees that a protocol keeps for itself, rather than passing through to the…