Terminology

  • Updated

If you clicked on this article, there’s a good chance that this could be your first time on Rarible. It might even be your first time on anything NFT-related!

Here's a list of terms commonly used in the "wild world" of Web3 that I recommend familiarizing yourself with before you get started:

  • Airdrop An airdrop is when you automatically receive a free NFT in your wallet which was sent to you from someone else. Airdrops can be used as a means to reward or attract others to the air-dropper's NFTs or collection. 
  • Blockchain – A blockchain is a decentralized network of computers that track transactions in their network and generate a giant ledger of who owns what (and how much of it).
  • Bucket action A bucket auction allows the market to determine the mint price of an NFT. A starting price (clearing price) is firstly set for the entire auction. If you bid below the starting price, then you will lose the auction however, if you bid at or above the bidding price then you will win the auction.
  • Burn/burning Burning an NFT regards the total discarding of that specific NFT. Once an NFT is burned, the NFT is destroyed and taken off of the market which means that the NFT will no longer be transferable. 
  • Collection – A collection is an assortment of digital assets released by an artist (or group of artists) containing a limited number of individual NFTs.
  • Crypto wallet – A crypto wallet is something you perform cryptocurrency transactions with. There are custodial and noncustodial crypto wallets, depending on whether you control their private keys and seed phrase. Noncustodial wallets can be both hardware and software.
  • Decentralized Application (dApp) – A decentralized application is an application that can operate autonomously, typically through the use of smart contracts, that run on a blockchain. A dApp can be a crypto wallet, a blockchain game, a cryptocurrency exchange, and more.
  • Drop A drop is the event whereby a user(s) receives a free NFT(s) or token(s) because they have held onto a particular NFT(s) or asset(s).
  • ERC-1155 An ERC-1155 contract or collection enables batch (more than one) transfers. This means that you are able to own multiple assets on a single smart contract so all of the NFTs can be transferred at once without needing to sign individual transactions for each NFT. This creates less network congestion and consequently lower gas costs.
  • ERC-721 An ERC-721 contract or collection is built to send and/or receive singular NFTs. Due to this reason, if you had to transfer more than one NFT from an ERC-721 contract, each NFT would have their own single transaction. This results in higher transaction costs when minting or trading individual NFTs.
  • Etherscan Etherscan is a platform that can be utilized for exploring blockchains and finding analytics about different wallet addresses. Etherscan is a useful platform to identify transactions, the value of your NFT(s), your balances, and more.
  • Farm/farming Farming refers to online game players earning assets in the game due to their time and efforts for participating in the game or the company's NFT project(s).
  • Flip Flipping something in the NFT space means that you purchase an NFT and sell it soon after you have purchased it with the intent of making a profit quickly.
  • Floor Floor is the minimum price that you can purchase an NFT in a specific collection for.
  • Free minting Free minting regards the process of creating an NFT without paying the gas fees to create that NFT.
  • Gas fees – Gas fees are the payments required to complete a transaction on a blockchain. They are typically paid in the blockchain’s native currency and go directly to the miners or stakers validating the blockchain transaction. Gas fees are not fixed fees and largely depend on the network’s availability/consensus model. 
  • Metadata Metadata refers to the unique and essential data that makes up the NFT and ultimately determines how the NFT will look.
  • Minting Minting is essentially the process of creating an NFT.
  • Non-Fungible Tokens (NFTs) – Non-Fungible Tokens (NFTs) are unique, digital items that live on a blockchain. They authenticate ownership of digital assets like art, collectibles, music, videos, in-game assets, and more.
  • Royalties Royalties is the income that the creator of an NFT earns from the sale of their NFT.
  • Seed phrase – Your seed phrase is a series of words that can be used to recover your wallet if you lose access to your wallet. Never give this phrase to anyone. Anyone who knows your seed phrase has full access to your wallet and can buy, sell or transfer any funds or assets.
  • Smart contract – Smart contracts are programs stored on a blockchain that run when predetermined conditions are met. They typically are used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary’s involvement or time loss.
  • Sweeping The term sweeping refers to the act of purchasing a large number of the cheapest NFTs within a collection. This effectively raises the floor price.
  • Wallet address – Your wallet address is a long string of numbers and letters that is unique to you. It’s the address people will use when they are sending cryptocurrency or NFTs to your crypto wallet.
  • Web3 – Web3 is an idea for a new iteration of the World Wide Web where users are given back power and ownership of their content via decentralization, dApps, NFTs and cryptocurrencies.
  • Whitelist – A whitelist is an exclusive list that provides the individuals who are on the list with access to new NFT drops before the general public.
  • Whitepaper  Whitepaper is a document that is released by a project team and it incorporates detailed technical information about the project and its roadmap. 

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