Crypto wallet glossary
Short, plain-English definitions of the terms you meet when using a crypto wallet, from address and approval to seed phrase, MPC and Permit2. Fuller guides are linked below.
Wallet apps are full of jargon. Here is what the most common terms mean. For the basics, start with what is a crypto wallet. For security terms, see seed phrase safety, wallet drainers and token approvals.
Terms A to Z
- Account abstraction
- Making accounts programmable, so wallets can offer features like passkeys, spending limits and social recovery.
- Address
- A public string, such as one starting with 0x or bc1, that others use to send you crypto. Safe to share.
- Address book
- A wallet feature that saves verified addresses so you don't copy them from transaction history.
- Address poisoning
- A scam that plants look-alike addresses in your history so you send funds to the attacker.
- Air-gapped
- A device that never connects to the internet or to a computer by cable, and signs via QR codes or memory cards.
- Airdrop
- Free tokens sent to wallets. Unsolicited airdrops are often bait for drainer sites.
- Approval (allowance)
- Permission for a smart contract to spend a token from your wallet, up to a set or unlimited amount.
- BIP39
- The standard that turns random data into a 12 to 24 word seed phrase from a list of 2,048 words.
- BIP39 passphrase
- An optional extra word or phrase added to a seed phrase that opens a completely different wallet. Sometimes called the 25th word.
- Blind signing
- Approving a transaction whose details your wallet or device cannot display in readable form.
- Block explorer
- A website that shows blockchain transactions, balances and contracts, such as Etherscan or Solscan.
- Bridge
- A service that moves tokens between blockchains. Bridges have been a frequent target of hacks.
- Clear signing
- Showing transaction details in plain language on a wallet or hardware device screen before you approve.
- Cold wallet
- A wallet whose keys stay offline, usually a hardware device.
- Custodial wallet
- An account where a company, such as an exchange, holds the keys for you.
- DApp
- A decentralised application that runs on smart contracts and connects to your wallet.
- DeFi
- Decentralised finance: lending, trading and earning through smart contracts instead of banks.
- Derivation path
- The rule a wallet uses to create addresses from a seed phrase. Different paths can show different addresses from the same phrase.
- Drainer
- Phishing code that tricks you into signing approvals or transactions that hand your assets to an attacker.
- Dust
- A tiny amount of crypto, often sent to track wallets or to plant addresses for poisoning.
- EIP-7702
- An Ethereum change from the May 2025 Pectra upgrade that lets an ordinary address delegate to smart-contract code.
- ERC-20
- The standard for fungible tokens on Ethereum and EVM chains, such as USDC and USDT.
- EVM
- The Ethereum Virtual Machine. EVM chains, such as BNB Chain, Base, Arbitrum and Polygon, share Ethereum-style addresses.
- Firmware
- The software that runs inside a hardware wallet. Update only through the manufacturer's official app.
- Gas
- The fee paid to process a transaction on Ethereum and similar networks.
- Hardware wallet
- A small device that generates and stores keys offline and signs transactions internally.
- Hot wallet
- A wallet whose keys are on an internet-connected phone or computer.
- Keyless wallet
- A marketing term for wallets, usually MPC, that do not show you a single seed phrase.
- Layer 2
- A network built on top of a main chain, such as Arbitrum or Base on Ethereum, offering cheaper transactions.
- Lightning Network
- A payment network on top of Bitcoin for fast, low-cost transfers.
- Mnemonic
- Another name for a seed phrase.
- MPC
- Multi-party computation: the key is split into shares held in different places that sign together without forming a full key.
- Multisig
- A wallet that needs several signatures, for example two of three, to move funds.
- Network fee
- The fee paid to the blockchain's validators or miners, separate from any wallet fee.
- NFT
- A non-fungible token: a unique token often used for art, collectibles or memberships.
- Non-custodial wallet
- A wallet where you, not a company, hold the keys. Also called self-custody.
- Open source
- Software whose code is published so anyone can inspect it.
- Passkey
- A login credential stored on your device and unlocked with biometrics or a PIN, used by some smart wallets instead of a seed phrase.
- Permit
- An off-chain signature (EIP-2612) that grants a token approval without a transaction. Often abused by drainers.
- Permit2
- Uniswap's shared approval contract that lets apps request token permissions by signature.
- Phishing
- Tricking someone into revealing secrets or signing something harmful, via fake sites, messages or apps.
- Private key
- The secret number that controls an address. Anyone with it can move the funds.
- Public key
- The key derived from a private key, from which an address is created. Safe to share.
- Recovery phrase
- Another name for a seed phrase: the words that restore your wallet.
- Revoke
- Cancelling a token approval with an on-chain transaction that sets the allowance to zero.
- Secure element
- A tamper-resistant chip used in many hardware wallets and cards to store keys.
- Seed phrase
- A list of 12, 20 or 24 words that can recreate every key in a wallet.
- Self-custody
- Holding your own keys, rather than letting an exchange or company hold them.
- SLIP-39
- A backup standard, used by Trezor, that can split a seed into multiple shares, such as any 2 of 3.
- Slippage
- The difference between the expected and actual price of a swap, usually capped by a setting.
- Smart account
- A wallet that is itself a smart contract, allowing rules such as multisig, limits and recovery.
- Smart contract
- Code on a blockchain that runs automatically when called, such as a DEX or lending pool.
- Stablecoin
- A token designed to track a currency, usually the US dollar, such as USDT or USDC.
- Staking
- Locking or delegating coins to help secure a proof-of-stake network in return for rewards.
- Supply-chain attack
- Compromising software or hardware before it reaches you, such as a malicious update or a tampered device.
- Swap
- Exchanging one token for another, often inside the wallet through a DEX aggregator.
- Transaction simulation
- A wallet feature that previews what a transaction will do to your balances before you sign.
- Watch-only wallet
- A wallet that shows balances for an address without holding its keys.
Learn more
- Hot vs cold wallets
- Custodial vs non-custodial
- MPC vs seed phrase wallets
- Address poisoning
- Wallet fees compared
Frequently asked questions
What is the difference between a seed phrase and a private key?
A private key controls a single address. A seed phrase generates many private keys, so it backs up the whole wallet across networks.
Is a recovery phrase the same as a seed phrase?
Yes. Recovery phrase, seed phrase, mnemonic and secret recovery phrase all mean the same thing.
What does EVM-compatible mean?
The network runs the Ethereum Virtual Machine, so it uses Ethereum-style 0x addresses and works with wallets such as MetaMask and Rabby.
What is gas?
The network fee for processing a transaction on Ethereum and similar chains. It goes to the network, not the wallet.