Whale Club 2022 THE REAL ESTATE INVESTOR'S Dictionary on Crypto
General Terminology Transaction Landscape Ecosystem 01 07 03 05 Table of Contents https://www.blockchainwhales.com/
& EMOTIONS
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Simply put, we have an unfair advantage - knowledge, an operating system, personal responsibility, and control of our behaviors and emotions. Blockchain presents an incredible opportunity for the real estate investor who takes the time to understand it. Most folks are unable or unwilling to make the commitment to obtain the required knowledge of crypto. We follow a set of rules or “commandments” that guide our decision making, whether in crypto or real estate. Most people that approach investments are essentially gambling. We are deliberately making decisions to reduce risk, reduce effort, and increase our number of options while getting closer to our Solvable Problem™. This is a necessary requirement to be involved in crypto as we say it’s still the Wild West. One must be dedicated to continuous learning and development, security, and accountability for your own actions. This requires a substantial and intentional commitment of time, energy, and cognitive focus that most are not willing to invest. Behavior matters. Crypto can be an emotional roller coaster. Fear of missing out, staring at charts, HODL, getting rekt’ed, chasing yield, doing your own research, etc… We’ve all heard at least some of these concepts and principles, and most are easy to understand. The difficulty comes in the implementation. Although most can probably learn these behaviors over time, most will not, or will do so only partially, because of lack of time, dedication, or for other reasons. This is how we create an unfair advantage and rig the game in our favor. Club SYSTEM BEHAVIORS
is a community of high net worth real estate investors that are leveraging blockchain to grow their real estate business. But what sets us apart?
LEARN MORE HERE KNOWLEDGE The Whale
PERSONAL RESPONSIBILITY
OPERATING
The most popular non custodial wallet used in DeFi, which takes the form of a browser extension. You use a wallet like this to connect to DeFi platforms and invest your money.
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On for Dear Life. The choice or decision to hold onto one's crypto investments through bull and bear markets is called HODLing. HODLer One who HODLs. Airdrop
Terminology
General
01 Whale A person who holds a large amount of cryptocurrency or cryptocurrencies. and is an experienced investor. FOMO Fear Of Missing Out. The feeling that everyone else seems to be getting rich, profiting, or generally having a great time without you. In investing, it's a feeling that your current portfolio isn't performing well enough when compared to newer and "shinier" investment choices and options.
HODL A misspelled word by a crypto investor on an online forum from the early days of cryptocurrency, HODL became a term that was embraced as an inside joke by the nascent community of investors, coders, and entrepreneurs who supported coins like Bitcoin and Ethereum in the early days. They believe in the long term promise of cryptocurrencies and held their investments through periods of massive volatility or even no volatility (i.e., price stagnation). Also known as Hold
A method of distributing tokens where they are directly sent to users’ wallets, often as a promotional tactic or a reward of some kind. MetaMask
02 FIAT
Immutable Unable to be changed from its initial state. Blockchains and their transactions are immutable: they cannot be changed or altered in any way. Miner The individuals or groups who process blocks of transactions on a particular blockchain, securing the network in the process. Miners are paid a fee to incentivize their participation.
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Stablecoin A token which has been developed to track the price of the US dollar (or other fiat currency) as closely as possible. Some popular stablecoins in DeFi include USDC, BUSD (Binance), USDT (Tether) and Dai.
The choice or decision to hold onto one's crypto investments through bull and bear markets is called HODLing.
Non-fungible token (NFT) A form of token, such as those conforming to Ethererum’s ERC 721 standard, that are not interchangeable from one token to the next. Each token has its own intrinsic properties that distinguish it from another. Commonly used for art and other forms of creative expression. Think of an NFT like a receipt or a ticket. It can show proof of ownership, and provides exclusive access to something specific like a club, or group. Pegged A cryptocurrency token that has been developed to track another asset ’s price as closely as possible. Stablecoins are pegged to the US dollar, for example. Private Keys Cryptocurrencies are secured through the use of very strong cryptography , the central element of which is the private key, a secret that should only ever be known by the owner of a particular wallet. Private keys are managed by software wallets like MetaMask or hardware wallets, and users generally only interact with the mnemonic seed phrase for their private keys. Think of this as a secret passphrase that only the owner would know.
A currency, like the US dollar or the Euro, that is not backed by a reserve of a physical commodity like gold or silver, but by the entity that issues it, generally a government, who maintains its value through various monetary policies.
Landscape 03 Blockchain
Address A long string of numbers and letters that identifies and locates an account that can transact on a particular blockchain. Addresses are generally created and managed by a wallet.
Cryptocurrency
Blockchain Explorer A website that provides an easy to use look at transactions for a particular blockchain, which are often used to view the status of a transaction, or to view the contents of any wallet address. An example would be bscscan.com or etherscan.com.
A digital medium of exchange, represented by a coin, which uses a public transaction ledger (see blockchain) and strong cryptography to ensure the integrity of transactions. Generally there is no central issuing or regulatory entity, instead preferring a decentralized model.
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The technology that allows an immutable permanent public record or ledger of all transactions since the beginning of a cryptocurrency coin or token. We call this technology Accounting 3.0. Block A bundle of transactions being processed on a blockchain network. New blocks are created on a regular interval, and each block is linked to the previous one, creating a “chain” of blocks, giving blockchain its name.
The native token of the Ethereum network. All transactions on Ethereum require gas fees to be paid in ETH.
Ethereum (ETH) Currency
A decentralized cryptocurrency that can be sent and received in a trustless manner without requiring the involvement of any supervising intermediary. Bitcoin can be used as a medium of exchange, a store of value and a unit of account, similar to any traditional currency. The Bitcoin network is secured by strong cryptography and transactions are processed by miners who are incentivized by earning additional Bitcoin for their work. There is a fixed amount of BTC at 21 Million, making it deflationary.
Ethereum Network
The Ethereum standard for defining new types of cryptocurrency tokens. The native token for the Ethereum blockchain is ETH, but many, many other tokens have been created via this standard, such as BADGER and ibBTC. Other blockchains have similar standards for creating tokens.
The most popular blockchain explorer for the Ethereum blockchain. Can be used to view information about transactions, wallets and smart contracts.
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A non-custodial wallet (meaning owned by YOU) which uses dedicated hardware to store and manage the private keys that cryptographically prove ownership of those assets. As with any wallet, assets are not stored on this device, they are stored on the blockchain itself. An example would be a Trezor or Ledger. Etherscan
Binance Smart Chain (BSC) A blockchain created by the centralized exchange Binance. BSC is a fork of the Ethereum blockchain, but uses centralized validators to enable transactions at lower cost. It’s native token is BNB, and tokens on BSC conform to the BEP 20 standard, a version of Ethereum’s ERC-20 standard.
The leading smart contract enabled blockchain, focused on decentralization, censorship resistance, privacy and open access for all. Ethereum is the primary blockchain platform for many DeFi protocols. Hardware wallet
04 Bitcoin (BTC)
ERC-20
Centralized Finance. In terms of cryptocurrency, CeFi is represented by centralized cryptocurrency exchanges, businesses, or organizations with a physical address, and usually with some sort of corporate structure. These CeFi businesses must follow all applicable laws, rules, and regulations in each country, state, or region in which they operate.
Ecosystems
CeFi
A popular messaging application that is used widely across the DeFi space as a gathering place for communities that build up around DeFi protocols. The Whale Club does all its communication on this application.
05 Discord
CEX A CEX is a Centralized Exchange, with a physical address and a corporate structure. Like other CeFi businesses, a CEX must follow all applicable laws, rules, money transmitter licenses, and regulations in each country, state, or region in which they operate. There are significant overhead costs in running a CEX including Corporate leaders, labor, rent and electricity, office supplies, significant legal expenses, and expensive money transmitter licenses to be able to operate in chosen countries, states, or regions. Examples would be Coinbase, Binance, FTX, Crypto.com.
Smart Contract Code that is stored and executed on the blockchain of a particular cryptocurrency network. Can be used to create many kinds of applications, including DeFi protocols. Think of this as a computer program. https://www.blockchainwhales.com/
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06 DeFi DeFi, or Decentralized Finance, is at its root a set of Smart Contracts running independently on blockchains such as the Binance Smart Chain network. Smart Contracts may or may not interact with other smart contracts and even other blockchains. The goal of DeFi is to enhance the profitability of investors in DeFi through automated smart contracts seeking to maximize yields for invested funds. DeFi is marked by rapid innovative progression and testing of new ideas and concepts. DeFi often involves high risk investing, sometimes involving smart contracts that have not been audited or even thoroughly reviewed (a review is not as comprehensive as an audit, but may also be included as part of an audit). Due to this and other reasons, DeFi is conventionally considered to be riskier than CeFi or traditional investing. dApp A 21st-century invention, a dApp is a decentralized Web3 application that normally runs on a blockchain. Advantages of dApps are that: they allow for new solutions to problems, they are decentralized and are thus rugged, and they are resistant to outages and censorship. dApps can provide decentralized software application services such as the Brave browser but it can also be used to trace and track goods, and can be used to enable international financial transactions without the delay, costs, and hassle of middlemen and bureaucracy. They can also be a keystone to the functionality of complex decentralized exchanges and crypto financial services such as price oracles. DEX Decentralized EXchange. A cryptocurrency exchange that is decentralized, without a physical location. It is a Peer-2-Peer network operating on Smart Contracts where users buy and sell directly to one another, with only the DEX as a middleman. Without the high overhead and regulatory costs of doing business as a CEX, a DEX does not have to follow the stricter rules and regulations that CEXs must follow, and thus can be leaner, more profitable, and more efficient than a CEX. (For example: How does one sue or arrest an automated Smart Contract which is running on a Virtual Machine that is globally distributed? [Comment: TMI?])
Transactional
A user who has deposited assets into a liquidity pool for use by a decentralized exchange (DEX) for automated market making (AMM). Liquidity providers are generally incentivized to deposit assets into the pool by receiving incentive rewards, often in the form of governance tokens from the DeFi protocols involved with the pool.
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A pool of assets used by a decentralized exchange (DEX) that uses that automated market maker (AMM) method of creating a venue for crypto asset trading. Pools are supplied tokens by liquidity providers. LP Token A token given to liquidity providers as a receipt for their deposit of assets into a liquidity pool. Can be traded or used with DeFi smart contacts just as like other tokens.
07
Liquidity Pool
Liquidity Provider
Market Cap Market Capitalization. A measure of the total funds invested in a company or project. This market cap of a coin, company, or project can be calculated by multiplying the asset's unit price by the total number of coins.
Automated Market Maker (AMM) An Automated Market Maker (AMM) is a blockchain protocol that places assets in trading pools. It allows participants to buy or sell cryptocurrencies. The AMM facilitates the trades between the trade customer and the liquidity pool.
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The act of lending a cryptocurrency deposit to yield farm additional cryptocurrency via CeFi or DeFi staking offerings, programs, or projects. Locking a particular token into a smart contract (removing it from one’s wallet) in exchange for some kind of benefit. Typically there is a benefit to both the user, often in the form of yield, and to the protocol offering the staking.
A term that combines “token” and “economics” and describes the economic policies applied to a particular token and its related DeFi applications, including the creation, distribution and destruction of tokens. Total Value Locked (TVL) The dollar value of all of the cryptocurrency deposited by users in a DeFi protocol’s smart contracts. A popular measure of the relative size of a particular protocol within the DeFi space.
Tokenomics
Impermanent
08 Loss In Automated Market Makers (AMM) lending providers (LPs) contribute assets for liquidity to market participants. These AMM pools utilize a bonding curve, typically built on a constant function market marker formula. Asset prices are constantly changed by the AMM pool in response to trading activities by participants. This is an effort to ensure that LPs can receive the same amount of assets they deposited when they withdraw. However, due to the volatility of asset prices and arbitragers, LPs occasionally will not receive the exact amount of assets upon withdrawal. The dollar value of the assets they withdraw would typically be lower than if they had not provided liquidity and just held the assets.
This dollar value shortfall is known as impermanent loss. The loss is said to be impermanent because if asset prices return to the level during withdrawal the loss is eliminated.
Token A unit of cryptocurrency that has been created according to the token standard for a particular blockchain (like ERC 20 for Ethereum). Distinct from a blockchain’s native coin, tokens are used to create new applications and use cases on a blockchain.
Staking
Turning your goals into a math equation. A single amount to achieve within a certain timeframe. This allows for APR targets necessary to reach the goal amount within the timeframe. Macro Strategy
The Bitcoin network does not support smart contracts directly, so to use Bitcoin on a smart contract enabled blockchain like Ethererum, BTC is bridged to the blockchain, where it is represented as a token using the standard for that blockchain, which is ERC-20 in the case of Ethereum. It is often expressed as wBTC. Micro Strategy May involve assets that are not part of the solvable problem but get you closer to it.
Yield
Solvable Problem
The assets invested in for the solvable problem. These are assets you plan on holding long term.
A piece of software that manages cryptocurrency funds and transactions, as your private keys, for one or more blockchains. Cryptocurrency wallets do not actually store funds, they are stored on the blockchain itself. In order to access these funds, your private key is used. Wallets manage your keys, making it easy to interact with the blockchain. On Ethereum, MetaMask is a popular software wallet, which takes the form of a browser extension. Hardware wallets such as those made by Ledger and Trezor, increase security by storing your private keys on a dedicated, secure hardware device.
09 Wallet
Wrapped Bitcoin
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Using DeFi platforms to generate yield in the form of interest, trading fees, or incentive rewards, often in the form of governance tokens. Yield farming is at the core of most DeFi protocols, including KnightSwap.
The return on a particular deposit, usually stated as APY, APR, or ROI. Unlike traditional finance’s simple interest or fixed-income yield, DeFi offers a number of sources of yield, usually combined into some form of yield farming. Yield Farming
Asymmetric Risk to the Upside Investments that are more weighted towards growth and mitigated against risk. These investments have very high upside, and very little downside.
10 Barbell Strategy Keeping your assets in two categories; reliable and upside potential nothing ever in the middle. Typically the reliable income funds the upside potential plays. Items with upside potential typically require less financial exposure while still giving the possibility of great returns (so not as much is needed to be risked to still get a great return) 3 C’s First focusing on Clarity. Know what you want and have a solvable problem. Then Certainty, filling up the reliable side of the barbell. Then Collapsing Time, getting closer to your solvable problem by reaping rewards on the upside potential side of the barbell. Investor Frame This asks, “Given what I know now, would I choose to opt into the exact situation I am in now?” Contributors A special thanks to the whales responsible for concept and coordination, writing, and designing of this gold nugget of information: Find more here: www.facebook.com/pesparks www.instagram.com/blockchain.whaleclub/ www.blockchainwhales.com/ Paul Sparks Alan Walker Sonia Lipov Steve Trang Nic Peterson Dan Nicholson