50 terms

Glossary

New words are fine. Here are the words that come up most around Ethereum and its L2s, explained in plain language.

L1 (Layer 1): The base blockchain that finally settles transactions and keeps the record. Ethereum mainnet is the L1.
L2 (Layer 2): A chain that processes transactions separately on top of L1 and posts only the results and data to L1. It borrows L1’s security while charging far lower fees.
Rollup: A kind of L2 that bundles (“rolls up”) many transactions and posts their data and a summary to L1. Because the data is on L1, anyone can recompute the L2’s state.
Optimistic rollup: A rollup that assumes posted results are correct and finalises them unless someone proves otherwise within a challenge period, usually seven days.
Fraud proof (fault proof): The procedure by which someone proves to L1 that an optimistic rollup’s posted result is wrong. If anyone may submit one, it is called permissionless.
ZK rollup: A rollup that posts a mathematical proof (a validity proof) that its batch was computed correctly, which L1 verifies directly. There is no challenge period to wait for.
Validity proof (zero-knowledge proof): Cryptography that proves a computation was done correctly, briefly and without revealing all of it. SNARKs and STARKs are the main families.
zkEVM: A system that can prove, with zero-knowledge proofs, programs written for Ethereum’s execution environment (the EVM) with little or no change.
Sidechain: An independent chain secured by its own validators rather than by Ethereum. Assets move between it and Ethereum only through bridges.
Data availability (DA): Whether transaction data is published so that anyone can download it. Without the data, nobody can verify the chain’s state or withdraw assets.
Optimium · Validium: Chains that work like rollups but keep their data outside L1 (on EigenDA, with a committee, and so on). Cheaper, but they require trusting that outside party.
Blob: Temporary data space added to L1 in March 2024 (EIP-4844) so that L2s can post data cheaply. Blobs are deleted after about 18 days.
Gas: The unit of computation a transaction uses, and the fee paid for it. More complex transactions use more gas.
gwei: The unit gas prices are quoted in. One gwei is a billionth of an ETH.
Base fee: The minimum gas price, which rises when blocks are full and falls when they are not (EIP-1559). This part is burned rather than paid to anyone.
TPS: Transactions per second: how much a chain is being used right now.
Block · Slot: A block is one batch of transactions. On Ethereum a turn to produce a block (a slot) comes every 12 seconds.
Beacon chain: The layer of Ethereum that runs consensus: who proposes and who attests to the next block.
Proof of stake · Validator: The consensus method in which participants who have staked ETH propose and attest to blocks. Breaking the rules costs them part of their stake.
Finality: The point at which a transaction can no longer be reversed. On Ethereum this normally takes about 13 minutes.
Sequencer: The operator that orders transactions and builds blocks on an L2. Today most L2s run a single sequencer themselves.
Based rollup: A rollup with no separate sequencer: Ethereum’s own block proposers also order the L2’s blocks.
Rollup stage (Stage 0, 1, 2): L2BEAT’s rating of how little you have to trust a rollup’s operators. The higher the number, the less they can do on their own.
Bridge: A mechanism for moving assets between chains. Usually you lock an asset on one side and receive the same amount on the other.
TVL (total value locked): The total value of assets deposited on a chain or in a service.

Market cap: A token’s price multiplied by its circulating supply.
Token · ERC-20: An asset issued on a chain. ERC-20 is the name of the common standard tokens follow on Ethereum.
Stablecoin: A token designed to hold the value of a currency such as the dollar (USDC, USDT, DAI and others).
Gas token: The asset fees are paid in on a chain. Most L2s use ETH; some chains use their own token (MNT, CELO, FRAX, POL, xDAI).
Governance token: A token used to vote on changes to a chain’s or a service’s rules.
Staking · LST: Staking means committing ETH to validation and earning rewards. An LST (liquid staking token) is a receipt-like token you get in return and can use freely (stETH and others).
DeFi: Finance — swapping, lending and so on — run by programs (smart contracts) rather than by intermediaries such as banks.
DEX (decentralised exchange): An exchange where a program, not a company, swaps tokens (Uniswap, for example).
RWA (real-world assets): Real-world assets such as treasury bills, stocks or property represented as tokens.
Memecoin: A token whose price is driven by trends and community rather than by use. Extremely volatile.
Wrapped asset: A token that represents an asset from elsewhere (bitcoin, for example) at the same value so it can be used on this chain (WBTC, WETH).
Wallet · Address: A wallet manages assets with a private key; an address, starting with 0x, is where assets are received. Never share a private key or recovery phrase with anyone.
ENS: A name, such as name.eth, used in place of a long 0x address.
Signature: Proving with your private key that a request really comes from you. A signature that is not a transaction costs no fee and moves no assets.
Smart contract: A program stored on a blockchain that runs by itself according to fixed rules.
EVM: The virtual computer that runs smart contracts on Ethereum. Most L2s use the same EVM, so programs can be moved over unchanged.
RPC: The interface for asking a blockchain questions such as “what is the latest block?”
Block explorer: A site where you can look up blocks, transactions and addresses (Etherscan, for example).
Superchain · OP Stack: The OP Stack is Optimism’s toolkit for building L2s; the Superchain is the group of chains built with it that share standards and upgrades.
Arbitrum Nitro · Orbit: Nitro is Arbitrum’s execution technology; Orbit is the framework that lets anyone launch their own chain with it.
Agglayer: Polygon’s connection layer for joining the assets and messages of many chains.
Upgrades (Dencun, Pectra, Fusaka): Ethereum changes its rules roughly once a year or two. Dencun (March 2024) introduced blobs, Pectra (May 2025) expanded wallet features and blob capacity, and Fusaka (December 2025) made room for many more blobs.
MEV: The profit available to whoever orders the transactions in a block, by choosing that order.
Whale: A nickname for an address that moves very large amounts.
All-time high (ATH): The highest price so far.

Facts on this page are as of 2026-10 and may change. If you spot a mistake, please tell us through the contact page.