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NFT Glossary of Terms: Learn Basic Terminology

December 6, 2022

NFT glossary terms

In March 2021, Christie’s, an infamous British arthouse, sold an NFT for $69 million. Just like that, NFTs went from being relatively unknown assets to becoming a fully-fledged disruptive innovation. Since then, we’ve watched tweets sell for millions and well-known brands launching their own NFT-enabled projects and collections.

As an emerging technology, the NFT ecosystem is filled with a whole host of weird terminology. If you’re new to this brave new world, reading every sentence might result in a quick Google search to understand the terms. Hence, we thought it’d be helpful to create an NFT glossary with the foundations you need before further sprawling into the often daunting NFT landscape.

Here’s a short, curated list of some frequently used NFT terms, phrases, and acronyms, to wet your feet.

As the NFT and crypto space evolves fast, we’ll update this glossary regularly when new terms, players, and technologies enter the industry. Be sure to bookmark it, and revisit it as you continue your NFT journey.

Airdrop

To send NFT(s), tokens, or cryptocurrency to a wallet free of charge. Mostly done to promote new collections, a reward for posting on social media about a project, or distribute event passes to attendees.

Alpha

Alpha-ing means accessing important insider information that is unknown to everyone. For example, I work with Binance and know they’ll publish an NFT lexicon shortly. So I have Alpha on this month’s Binance Academy plans! Maybe it’s not the intel the world’s been waiting for, but you get the picture.

Ape In / Degen

Used to describe the act of heavily investing in a new NFT project hastily out of fear of missing out. On the other hand, a degen refers to the person who makes these gambles.

Blockchain

Blockchain is a shared digital database secured by digital infrastructure known as Distributed Ledger Technology (DLT). Essentially it’s a digital ledger of transactions duplicated and distributed across the entire network of computer systems on the blockchain. So, in practice, the blockchain accepts new data, doesn’t allow changing of previous blocks of information, and creates consensus among users.

BTD or BTFD

Short for “buy the dips” and “buy the f*cking dips,” respectively. It’s a bargain to buy an NFT after a drop in price as the asset is likely to recover and increase in value over time.

Burn

When you burn an NFT, you’re essentially destroying it. It’s removed from circulation by sending it to a wallet address owned by no one, never to be accessed again.

Copy Cat

In the NFT space, a Copy Cat is a knock-off project that copies another more popular one. There are a lot of plagiarism claims as a result. Still, apart from removing the fakes from NFT marketplaces, there doesn’t seem to be any other workaround for now.

DAO

A DAO refers to Decentralized Autonomous Organization run on the blockchain and governed through smart contracts. Unlike in a traditional organization, token holders in DAOs can vote on key decisions, such as the project’s future. A proposal is accepted and executed once a consensus, predefined in the smart contract, is achieved.

Delist

Taking down an NFT listing from an exchange as a result of copyright claims issued to the NFT creator, leaving them with a dead resale market for their collection.

Discord

Discord is a VoIP and instant messaging platform that has become the primary means of communication for most NFT and Web3 communities. To access these communities, users need an invite link.

ERC-20

A standard for fungible (interchangeable) tokens, i.e., voting tokens, staking tokens, or digital currencies. This means that tokens built on this standard are the same in value and type at a given time.

ERC-721

A token standard for non-fungible tokens (NFTs). Unique as they are, these tokens have a different value than another token from the same Smart Contract. Meaning that a token cannot be exchanged for another because of its unique specifications like age or rarity. They’re often utilized to represent digital collectibles, access keys, game items, event tickets, domain names, and many more.

ERC-1155

A token standard allows for more gas-efficient trades and bundling of transactions. Users can build multiple tokens in a single contract. ERC-1155 can be used to create for all use cases; utility tokens (like $BNB) and Non-Fungible Tokens like CryptoPunks. These traits make ERC1155 better at storage management, efficient, and budget-friendly.

Flipping

As used frequently in the real estate realm, flipping is the act of buying items for cheap and selling them quickly for a profit. The same applies in the NFT space.

Floor Price

This is the lowest NFT price in the collection, excluding bid offers. “Floor sweeping” or “buying the floor” involves buying the cheapest NFT(s) in a collection to raise the price.

Gas

Gas is a fee individuals pay to compensate miners for the computing power used to process and verify blockchain transactions. Typically paid in the blockchain’s native cryptocurrency, gas fees differ from network to network and fluctuate based on network congestion.

Generative Art

A method used to create large NFT collections. Rather than designing each NFT individually, a creator uses a program to randomize trait selection from a limited pool of assets. This process is popular with PFP creators for its increased perceived value, pre-minting capabilities, and appeal to collectors.

Hash

A unique transaction ID known as “hash” is created when a transaction occurs. This automatic process is called hashing.

IRLs

Short for “In Real Life,” this term refers to physical NFT exhibitions that merge the digital and physical worlds and aim to build bridges between crypto art and traditional or IRL art.

Lazy Minting

Lazy minting is when an NFT is available off-chain and only gets minted once sold. This means the artist does not have to pay any upfront gas fees to mint their NFTs, essentially paying the fees only once the token is purchased and transferred “on-chain.”

Metadata

The collection of data that describes an NFT, i.e., the file name, video length, and images that make up each frame. The metadata showcases the ownership of an NFT and differentiates one from the other.

Mint

Minting is publishing an NFT on the blockchain, making it available for purchase. That said, NFTs don’t have to be made public; they can be kept private. 

Moon

Just like its literal meaning, “To the moon!” is often used in the NFT and crypto space to describe that the value of something will skyrocket.

If something is “mooning,” it means the price of a coin or NFT is experiencing a spike.

NFTs

Short for non-fungible tokens — NFTs are cryptographic tokens that exist on the blockchain. As a result, they have their own identification code and metadata. They are unique and non-fungible, i.e., non-interchangeable. An NFT can be traded on designated trading platforms or kept as collectibles. They can be anything from videos and photos to avatars. NFTs are mostly used for buying and selling digital items (specifically, art). They can also be used to grant the owner access to exclusive merchandise, tickets to live or digital events, and more.

NFA and DYOR

These two acronyms mean “not financial advice” and “Do Your Own Research,” respectively. They act as disclaimers to opinions or projections for an NFT project, warning others to develop their own understanding before making any investment moves.

NFT Marketplace

This decentralized platform allows NFTs to be bought, sold, or traded. Most NFT marketplaces are built on the Solana or Ethereum blockchains, with OpenSea and Hyperspace as examples of each chain.

PFP

A PFP is a token generated to act as a profile picture. These are the most popular NFT art collections, for example, the CryptoPunks (check out Odell Junior’s Twitter). Each one is unique for each owner. Creators create hundreds of characters and trait combinations. Some traits may have a lower chance of appearing, which makes some PFPs more valuable.

Rarity

This is an overall measure of an NFTs value often determined by calculating the scarcity of individual traits and averaging or multiplying them.

Rarible

A community-owned NFT marketplace founded in 2020, fuelled by its native ERC-20 token, RARI. This platform allows users to create, buy, auction, and discover digital collectibles.

Smart Contracts

A “smart contract” is a program that runs on the Ethereum blockchain. It automates the execution of agreements and transactions. Thus all participants can ascertain the outcome without the interference of an intermediary or time delay. We can compare it to a vending machine. With the right inputs, a certain output is guaranteed.

WAGMI

WAGMI is short for “we’re all gonna make it .” Mostly used to describe a future state of a successful project that will deliver great returns.

1/1

A one-of-one artwork or NFT is a completely exclusive, single-edition NFT (only one exists). Due to their rarity, 1/1s usually carry a much higher price tag than multi-edition NFT collections.

10K Project

An NFT collection with 10,000 unique pieces.

Conclusion

NFT development is part of a wider move towards decentralization, and its utility will continue to grow as blockchain technologies evolve. It’s not enough to know what they are – you also need to know how they work, and knowing the many terms used by those who trade them daily is a great place to start.

I know you just joined the party, but hopefully, the music is no longer too loud. You’re now armed with some of the most important terms in the world of NFTs. So go forth and dance to the rhythm.

Written by Darshan Kothari

Founder of Vardhaman Infotech - Blockchain & AI development Company. Developed world's first KALQ Keyboard. Thiel fellowship runner up. Love reading books.

NFT

October 10, 2022

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