As the popularity of non-fungible tokens (NFTs) and NFT trading continues to grow, understanding the lingo is crucial for anyone looking to participate in this digital space. This article provides a comprehensive glossary of the 50 most commonly used phrases in NFT and NFT trading, designed to help newcomers navigate the world of digital art, collectibles, and beyond.
NFT (Non-Fungible Token)
A unique digital asset representing ownership of a specific item, such as art, virtual land, or in-game items, and stored on a blockchain.
Blockchain
A decentralized digital ledger that records transactions made with cryptocurrencies, enabling the existence of NFTs.
Ethereum
A popular blockchain platform for creating and trading NFTs, utilizing its native cryptocurrency, Ether (ETH).
Smart Contract
A self-executing contract with the terms of the agreement directly written into code, facilitating NFT creation, trading, and ownership.
ERC-721
The Ethereum token standard for creating non-fungible tokens.
ERC-1155
A more advanced Ethereum token standard allowing for both fungible and non-fungible tokens within a single smart contract.
Gas Fee
The cost of conducting transactions on the Ethereum network, often required when minting, buying, or selling NFTs.
Minting
The process of creating a new NFT and adding it to the blockchain.
Wallet
A digital application used to store, send, and receive cryptocurrencies and NFTs.
Metamask
A popular Ethereum-based wallet used for managing NFTs and interacting with decentralized applications (dApps).
DApp (Decentralized Application)
An application built on a blockchain network, often used for trading and interacting with NFTs.
Marketplace
An online platform where users can buy, sell, and trade NFTs.
OpenSea
A leading NFT marketplace for buying, selling, and trading various digital assets.
Rarible
A popular decentralized NFT marketplace and creation platform.
CryptoPunks
One of the first NFT projects, consisting of 10,000 unique pixel-art characters.
Bidding
The process of placing a bid on an NFT in an auction or sale.
Reserve Price
The minimum price a seller is willing to accept for an NFT.
Royalties
A percentage of future sales paid to the original creator of an NFT.
Provenance
The history of an NFT’s ownership, sales, and authenticity.
IPFS (InterPlanetary File System)
A decentralized protocol for storing and sharing digital content, often used for hosting NFT data.
Utility
The practical use or function of an NFT beyond its artistic or collectible value.
Rarity
The relative scarcity of an NFT or its attributes, affecting its value.
Metadata
Information associated with an NFT, such as the creator, description, and attributes.
Token ID
A unique identifier for each NFT on a blockchain.
Whitelist
A list of approved users who can access exclusive NFT sales or events.
Decentraland
A virtual reality platform powered by Ethereum, where users can buy, sell, and develop virtual land as NFTs.
Axie Infinity
A popular play-to-earn game featuring NFT-based creatures called Axies.
CryptoKitties
An early NFT-based game where users can breed, buy, and sell unique virtual cats.
NBA Top Shot
A platform for buying, selling, and trading officially licensed NBA collectible highlights as NFTs.
PFP (Profile Picture)
A term referring to NFTs that are commonly used as profile pictures on social media platforms.
Floor Price
The lowest price for an NFT within a specific collection or project, often used as a baseline for its market value.
Gasless Minting
A method of creating NFTs without paying gas fees, often achieved through layer 2 solutions or alternative blockchains.
Layer 2
A secondary network built on top of a blockchain to enhance its scalability and reduce transaction fees.
Polygon (formerly Matic)
A popular Ethereum layer 2 scaling solution used for gasless minting and trading of NFTs.
Immutable X
A layer 2 protocol for gas-free NFT minting and trading on the Ethereum network.
Tezos
An alternative blockchain platform for creating and trading NFTs, known for its lower transaction fees compared to Ethereum.
Hic et Nunc
A popular NFT marketplace built on the Tezos blockchain.
Solana
A high-performance blockchain platform for creating and trading NFTs.
Solsea
A leading NFT marketplace on the Solana blockchain.
Wrapped NFT (wNFT)
An NFT that is “wrapped” to make it compatible with a different blockchain, allowing cross-chain trading and utilization.
Airdrop
A distribution of free NFTs or tokens to wallet addresses, often as a promotional strategy.
Liquidity Pool
A decentralized pool of tokens used for automatic trading in decentralized exchanges, sometimes used for NFT-based tokens.
DAO (Decentralized Autonomous Organization)
An organization governed by rules encoded in smart contracts, often used for managing NFT collections and projects.
Fractional Ownership
Dividing an NFT into smaller, tradable shares, enabling multiple users to own a portion of a high-value digital asset.
Flash Loan
A loan provided and repaid within a single blockchain transaction, sometimes used for NFT-related activities.
DeFi (Decentralized Finance)
A financial system built on blockchain technology that does not rely on traditional intermediaries, often intersecting with NFTs.
NFTfi
A platform that enables users to use their NFTs as collateral for loans.
Virtual Land
A digital representation of land within a virtual world, often bought, sold, and developed as NFTs.
Loot
A randomized NFT project consisting of text-based “bags” of items, used to build a decentralized gaming ecosystem.
Blue Chip NFT
A high-value, reputable NFT or project, often considered a safer investment compared to lesser-known projects.
Understanding the terminology associated with NFTs and NFT trading is essential for anyone interested in participating in this burgeoning market. This glossary of 50 essential phrases will help newcomers navigate the world of digital art, collectibles, and beyond. As the NFT space continues to evolve, staying up-to-date with the latest trends and terminology is key to success.
