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Glossary

Quick reference for Web3 and API terminology used throughout this documentation.

A​

ABI (Application Binary Interface)​

A JSON specification that defines how to interact with a smart contract — its functions, parameters, and return types. Required for calling contract methods.

Address​

A 42-character hexadecimal string (starting with 0x) that identifies an account or contract on Ethereum. Example: 0xd8dA6BF26964aF9D7eEd9e03E53415D37aA96045

AMM (Automated Market Maker)​

A DeFi protocol that uses liquidity pools and algorithms (instead of order books) to enable token swaps. Examples: Uniswap, Curve.

API Key​

A secret credential for authenticating API requests. Provides higher rate limits and usage tracking.

APY (Annual Percentage Yield)​

The annualized return on a DeFi position, including compound interest. A 10% APY means $100 becomes $110 after one year.

B​

Base​

A Layer 2 blockchain built on Ethereum using Optimistic Rollup technology. The Web3 Identity API accepts x402 payments on Base.

Block​

A batch of transactions permanently recorded on the blockchain. Ethereum produces a block roughly every 12 seconds.

Bridge​

A protocol that transfers assets between different blockchains. Example: Moving ETH from Ethereum to Arbitrum.

C​

CCIP (Cross-Chain Interoperability Protocol)​

Chainlink's protocol for secure cross-chain communication. Also refers to EIP-3668 for off-chain data resolution.

Chain ID​

A unique identifier for a blockchain network. Ethereum Mainnet = 1, Base = 8453, Polygon = 137.

Checksum Address​

An address with mixed-case letters that includes error detection. 0xABC... vs 0xabc... — the checksum version catches typos.

Contenthash​

An ENS record pointing to decentralized content (IPFS, IPNS, Arweave). Enables .eth.limo websites.

Contract​

See Smart Contract.

D​

DAO (Decentralized Autonomous Organization)​

An organization governed by smart contracts and token holder votes rather than traditional management.

DeFi (Decentralized Finance)​

Financial services built on blockchain — lending, trading, yield farming — without traditional intermediaries.

DEX (Decentralized Exchange)​

A trading platform that operates via smart contracts without a central authority. Examples: Uniswap, SushiSwap.

E​

EIP (Ethereum Improvement Proposal)​

A design document proposing new Ethereum features or standards. EIP-20 defined ERC-20 tokens.

ENS (Ethereum Name Service)​

A naming system that maps human-readable names (like vitalik.eth) to Ethereum addresses and other records.

ERC (Ethereum Request for Comments)​

A standard for Ethereum smart contracts. Common ERCs:

  • ERC-20: Fungible tokens (USDC, UNI)
  • ERC-721: NFTs (unique tokens)
  • ERC-1155: Multi-token standard

EOA (Externally Owned Account)​

A regular Ethereum account controlled by a private key (as opposed to a smart contract account).

F​

Farcaster​

A decentralized social network built on Ethereum. Users have portable identities and own their social graph.

FID (Farcaster ID)​

A unique numeric identifier for a Farcaster account. Like a user ID but on-chain.

Finality​

When a blockchain transaction becomes irreversible. On Ethereum, typically after ~15 blocks (~3 minutes).

Free Tier​

The Web3 Identity API's complimentary usage allowance: 100 calls/day per wallet/IP (200 with SIWE authentication).

G​

Gas​

The unit measuring computational effort on Ethereum. Every transaction requires gas, paid in ETH.

Gas Price​

The cost per unit of gas, measured in gwei. Higher gas prices = faster transaction confirmation.

Gwei​

A denomination of ETH. 1 gwei = 0.000000001 ETH (10⁻⁹). Used for gas prices.

H​

Hash​

A fixed-length string produced by a cryptographic function. Transaction hashes identify specific transactions.

HODL​

Crypto slang for "hold" — keeping assets long-term regardless of price volatility.

I​

IPFS (InterPlanetary File System)​

A decentralized file storage network. Content is addressed by hash, making it immutable and censorship-resistant.

J​

JSON-RPC​

The protocol for communicating with Ethereum nodes. The Web3 Identity API abstracts this complexity.

L​

L1 (Layer 1)​

The base blockchain — Ethereum mainnet. Handles final settlement and security.

L2 (Layer 2)​

Scaling solutions built on top of L1. Process transactions faster/cheaper, then settle to Ethereum. Examples: Arbitrum, Optimism, Base.

Lens Protocol​

A decentralized social graph on Polygon. Users own their profiles, content, and connections as NFTs.

Liquidity​

The ease of trading an asset without affecting its price. High liquidity = easy to buy/sell.

Liquidity Pool​

A smart contract holding token pairs that enable decentralized trading. Liquidity providers earn fees.

M​

Mainnet​

The production blockchain network where real transactions occur (as opposed to testnets).

Merkle Tree​

A data structure enabling efficient verification of large datasets. Used in blockchain proofs.

Micropayment​

A very small payment, typically under $1. x402 protocol enables API micropayments.

N​

NFT (Non-Fungible Token)​

A unique digital asset on blockchain. Each token is distinct (unlike fungible tokens like ETH where each unit is identical).

Node​

A computer running blockchain software, maintaining a copy of the chain and validating transactions.

Nonce​

A number used once — in Ethereum, tracks the count of transactions from an address.

O​

Off-chain​

Data or computation that happens outside the blockchain. Cheaper but requires trust assumptions.

On-chain​

Data or computation recorded directly on the blockchain. Expensive but trustless and permanent.

Oracle​

A service providing external data to smart contracts. Example: Chainlink price feeds.

P​

Private Key​

A secret 256-bit number that controls an Ethereum account. Never share it — anyone with your private key controls your funds.

Protocol​

A set of rules governing a system. In DeFi, protocols are smart contract systems (Aave, Uniswap, etc.).

Public Key​

Derived from a private key; used to generate your Ethereum address. Safe to share.

R​

Rate Limit​

Maximum API requests allowed per time period. Web3 Identity API: 100/day free, higher with authentication.

Resolver​

An ENS smart contract that stores and returns records for a name. Each ENS name points to a resolver.

RPC (Remote Procedure Call)​

A protocol for requesting data from a blockchain node. The Web3 Identity API handles RPC complexity for you.

S​

SIWE (Sign-In with Ethereum)​

An authentication standard where users prove wallet ownership by signing a message. No passwords needed.

Slippage​

The difference between expected and actual trade prices due to market movement during execution.

Smart Contract​

A program stored on blockchain that automatically executes when conditions are met. Written in Solidity for Ethereum.

Stablecoin​

A token designed to maintain a stable value, usually pegged to USD. Examples: USDC, DAI, USDT.

T​

Testnet​

A blockchain network for testing with fake tokens. Examples: Goerli, Sepolia (Ethereum testnets).

Token​

A digital asset on blockchain. Can be fungible (ERC-20) or non-fungible (ERC-721).

Transaction​

An operation recorded on blockchain — sending tokens, calling contracts, etc. Each has a unique hash.

TVL (Total Value Locked)​

The total USD value of assets deposited in a DeFi protocol. A key metric for protocol size/adoption.

U​

USDC​

USD Coin — a regulated stablecoin pegged 1:1 to the US dollar. Used for x402 payments on this API.

V​

Validator​

In Proof of Stake, a node that proposes and validates new blocks. Requires staking 32 ETH on Ethereum.

Viem​

A TypeScript library for Ethereum interactions. Modern alternative to ethers.js and web3.js.

W​

Wallet​

Software or hardware that stores private keys and enables blockchain interactions. Examples: MetaMask, Rainbow, Ledger.

Wei​

The smallest denomination of ETH. 1 ETH = 10¹⁸ wei.

Wrapped Token​

A token representing another asset on a different chain. wETH (Wrapped ETH) is ERC-20 compatible ETH.

X​

x402​

A payment protocol using HTTP status code 402 (Payment Required) for API micropayments. Sign with your wallet, pay per request.

Y​

Yield​

Returns earned from DeFi activities — staking, lending, liquidity provision, etc.

Yield Farming​

Maximizing returns by moving assets between DeFi protocols to capture the best yields.

Z​

Zero-Knowledge Proof​

A cryptographic method proving something is true without revealing the underlying data. Used in ZK-rollups for scaling.

API-Specific Terms​

Endpoint​

A specific API URL path that returns data. Example: /api/ens/resolve/:name

Free Tier​

100 API calls per day without authentication (200 with SIWE). Resets at midnight UTC.

Unlimited API calls via x402 micropayments. Costs $0.001-$0.02 per request depending on endpoint.

x-price​

A custom header indicating the cost of a paid endpoint. Example: x-price: $0.01

Missing a term? Let us know and we'll add it!