Ethereum (ETH)

Self-executing programs stored on a blockchain that automatically enforce the terms of an agreement when predetermined conditions are met. Smart contracts enable trustless transactions without intermediaries because the code, once deployed, executes exactly as written and cannot be altered (unless specifically designed to be upgradeable). They form the foundation of DeFi, NFTs, DAOs, and virtually all dApps.

A unit measuring the computational effort required to execute operations on the Ethereum network. Users pay gas fees in ETH to compensate validators for processing transactions. Since EIP-1559, gas fees consist of a base fee (burned) and an optional priority fee (tip) to incentivize faster inclusion.

The most widely adopted token standard on Ethereum, defining a common set of rules that all fungible tokens must follow. ERC-20 specifies six mandatory functions (like transfer, approve, and balanceOf) that ensure any compliant token can be seamlessly used across wallets, exchanges, and DeFi protocols without custom integration.

A secondary protocol built on top of a Layer 1 blockchain to improve scalability, reduce transaction costs, and increase throughput without sacrificing the security guarantees of the underlying chain. Layer 2 solutions process transactions off the main chain and periodically post compressed proofs or data back to Layer 1 for finality.

A consensus mechanism where validators are selected to propose and attest to new blocks based on the amount of cryptocurrency they have staked as collateral. PoS replaces energy-intensive computational competition (PoW) with economic stake as the security mechanism — validators risk losing their staked tokens (slashing) if they act maliciously. PoS is significantly more energy-efficient than PoW and is used by Ethereum, Solana, Cardano, and most modern blockchains.