FAQ

SegWit is a blockchain protocol update developed in 2015 to address the scalability and throughput issues that blockchain networks face today. For example, in the Bitcoin network, validation of a new block with transactions takes about 10 minutes. The number of transactions that can be confirmed in each block depends on the block size. The main purpose of SegWit is to keep signatures separate from transaction information. This allows you to increase the number of transactions in one block and thereby increase throughput.

The Schnorr scheme in cryptocurrencies is a special digital signature algorithm that determines the relationship between a private key (password) and a public key (address). Choosing the right signature algorithm is very important for maintaining the privacy, scalability, and security of the blockchain. The advantage of the Schnorr signature is that it is much easier to prove its security, so the scheme is especially often used for multi-signature transactions.

MakerDAO (DAI) is the De-fi protocol of the Ethereum ecosystem that allows the issuance of DAI USD-pegged stablecoins on bail of real assets and cryptocurrencies. The platform uses its own MKR token to make offers and take decisions. You can use MakerDAO through the Oasis DApp. Here you can post collateral for loans, keep track of your Maker Vaults, and participate in protocol management issues.

DAI is MakerDAO's dollar-pegged stablecoin, which is considered one of the largest stablecoins by capitalization. The users themselves provide the issuance of DAI, so the stablecoin has an unlimited supply. Tokens operate on the ERC-20 standard. DAI has the same benefits and the same scope of use as fiat-backed stablecoins.

ERC-20 is one of the most popular smart contract standards on the Ethereum blockchain. A standard is a list of rules that must be followed when developing a smart contract to issue a new custom token. The emergence of the ERC-20 standard has greatly simplified the process of creating new cryptocurrencies. All tokens created based on the ERC-20 standard can be stored on one Ethereum address.

Elastic supply tokens are De-fi assets whose circulating supply increases or decreases depending on their price. Changing the supply of tokens is called rebasing. When rebasing occurs, the supply decreases or increases according to the price of each token. For example, if the Bitcoin protocol were elastic, if the user had 1 BTC after the price fell by 50%, there would be 2 BTC in the account.

Blockchain zero is an infrastructure that offers all the necessary tools to build a first-level blockchain. Zero protocols are the backbone of blockchain applications and networks, solving interoperability and scalability issues. The zero layer gets rid of the first layer protocol limitations, which are based on a monolithic architecture, for example, Ethereum. With a flexible underlying infrastructure, developers can create custom blockchains for a variety of purposes.

Polygon Bridge allows users to quickly transfer NFT and ERC tokens to the Polygon sidechain. The network was specially designed to improve compatibility between the Ethereum and Polygon blockchains. To transfer tokens using Polygon Bridge, you only need a compatible crypto wallet. The cross-chain channel does not require trust and works on a double consensus architecture, which has a positive effect on decentralization and transaction speed.

Siiba Inu (SHIB) is a decentralized cryptocurrency that was created in 2020 by a group of individuals under the pseudonym “Ryoshi”. The name of the cryptocurrency comes from the Japanese Shiba Inu dog breed. Shiba Inu is an ERC-20 token that was released as an alternative to the popular Dogecoin meme-coin on the Ethereum blockchain.

Bitcoin-ETFs are pools of assets that are linked to BTC. Bitcoin ETFs are created by traditional brokerage companies. This allows users to trade Bitcoin without actually owning the asset. Bitcoin ETFs provide an opportunity for large investors to earn on changes in the asset price. There is no need to physically own the assets. Bitcoin ETFs are most popular in the USA and Canada.

A backtest is a tool that is used to test new markets and strategies in both crypto and traditional trading. It involves the use of special software that allows you to test the success of strategies in an artificially simulated environment. If the backtest shows a positive result, it means that the trader can apply the proven tactics in real conditions.

BEP-20 is a special token standard on the BNB Smart Chain (BSC) designed to extend popular standards such as ERC-20 and BEP-2. Using the BEP-20 standard allows you to transfer tokens between different blockchains. The BEP-20 standard is highly flexible and developers choose it very often. Such tokens were specifically created for the decentralized finance industry.

Utility tokens are tokens of utility programs that provide access to the products and services offered by the company. This type of token is not an investment. They do not provide any financial benefits and do not give additional rights and privileges to the company's assets. They are not analogous to loan agreements. Utility tokens are considered the most common type of tokens.

Flare is a distributed network that was designed to create two external bridges between XPR Ledger and Ethereum networks. Thanks to Flare, you can use XPR tokens with smart contracts. The Flare Network has unified the use of smart contract scaling across the network. Flare operates on the Avalanche consensus protocol, which is adapted to work with the Federated Byzantine Agreement. Spark is the Flare Network's native token created to prevent spam attacks.

An ETF is an exchange-traded fund that tracks the value of underlying assets. Such funds exist for a long time in various industries. Recently, cryptocurrency ETFs have begun to appear. Such funds are considered regulated financial products. Therefore, cryptocurrency ETH is traded on stock exchanges, not cryptocurrency exchanges, such as the NYSE or NASDAQ.

A crypto portfolio tracker is a platform or application that allows a trader to visually track the value of crypto assets placed on different platforms in real-time. Depending on the functionality, the application may automatically track transactions or require manual entry. The best crypto portfolio trackers include platforms such as Coinmarketcap, CoinGecko, Koinly, Coin Market Manager, CoinTracker, etc.

BETH is a tokenized version of ETH that is used for staking on Binance. By holding BETH tokens, the user will be able to participate in the ETH 2.0 Beacon Chain staking. BETH coin holders receive ETH 2.0 staking rewards earned by the Binance node. Each BETH is equal to 1 ETH in staking. You can also exchange ETH for BETH in equal proportion. BETH tokens can be used for more than just staking. With their help, you can participate in Defi projects and receive rewards in the form of project coins, which soon become liquid on Binance.

Zero-knowledge proof is a cryptographic technology that allows you to determine the validity of information without disclosing it. The mechanism is used in cases where it is necessary to prove the authenticity of confidential information. The prover must independently generate a unique mathematical proof so that the verifier can verify the truth of the statement. Neither party can use the evidence offered to reconstruct the original information.

Dynamic NFTs are non-fungible tokens that can change under the influence of smart contracts, following coded conditions. Changing its appearance, the token retains the original ID. Dynamic NFTs contain metadata that can change and be visually reflected. Dynamic tokens are created based on the ERC-1155 standard. Such NFTs can be used for personal identification, gaming, virtual real estate, and art.

Dogecoin is an open-source peer-to-peer meme-cryptocurrency. Dogecoin was created in 2014 as a fork of Litecoin. Initially, cryptocurrency was presented as a joke. Later, Dogecoin began to be used for charitable purposes, for example, on Reddit, you could thank the user for creating interesting content by sending a small amount in Dogecoin. In 2020, thanks to a viral video on TikTok, the coin became very popular. Adding new blocks to the Dogecoin blockchain is based on Proof-of-Work algorithms.

The real yield of cryptocurrencies is a metric that allows you to compare the expected profitability with the received profit of the project. If the real income from mining is more than the offered percentages, the issue will be considered diluted. The profitability of such projects is not real and sustainable. The calculation of the indicator allows you to evaluate the profitability of Defi projects in the long term.

Maximum Extractable Value (MEV) is a strategy that involves excluding, including, and reordering transactions when a new block is created. Using a strategy allows miners to get the maximum profit. Usually, the strategy is used by block producers, who have the right to choose and order the transaction. If other network participants see opportunities to extract value, they can pay a fee and add transactions to the block. Most often, the MEV strategy is used in networks with developed smart contracts, for example, in Ethereum.

Proof of Capacity/ Proof of Space (PoC/ PoSpace) is a protocol that selects miners based on the amount of free space on a computer's hard drive. PoC miners do their planning by creating lists of all possible hashes. The created lists are stored on the hard drive. The number of possible solutions depends on the memory size. The more solutions the miner offers, the higher the probability of finding the right combination of hashes and getting a reward. This mechanism does not require expensive hardware, but the protocol is considered to be susceptible to hacker attacks, so it is less popular. The PoC protocol is currently used in Signum (Signa).

Proof of Burn (PoB) is a protocol where miners get the right to add a block based on the number of tokens burned. Tokens must be sent to the “burner” address, after which they cannot be restored. The more tokens were burned, the higher the chance of being selected. This mechanism is associated with the loss of short-term wealth with the ability to gain permanent privileges to add new blocks, which stimulates the long-term commitment of miners. The PoB protocol is used by such cryptocurrencies as Factom (FCT), Counterparty (XCP), and Slimcoin (SLM).