Layer 2

Blockchain

A distributed, immutable digital ledger that records transactions across a network of computers without a central authority.

Distributed Ledger Technology

A digital system for recording, sharing, and synchronising data across multiple sites without a central administrator.

Consensus Mechanism

The method by which a distributed network agrees on the current state of the ledger and validates transactions.

Proof of Work

A consensus mechanism requiring computational effort to validate transactions and create new blocks, used by Bitcoin.

Proof of Stake

A consensus mechanism where validators are selected based on the amount of cryptocurrency they hold and stake.

Delegated Proof of Stake

A consensus mechanism where token holders vote for delegates who validate transactions on their behalf.

Byzantine Fault Tolerance

The ability of a distributed system to reach consensus despite some nodes acting maliciously or failing.

Merkle Tree

A hash-based data structure that efficiently verifies the integrity and consistency of large sets of data.

Hash Function

A mathematical function that converts input data of any size into a fixed-size output, used extensively in blockchain security.

Cryptographic Hash

A one-way function producing a fixed-length output that is computationally infeasible to reverse or find collisions for.

Public Key Cryptography

An encryption system using mathematically linked key pairs — a public key for encryption and a private key for decryption.

Digital Signature

A cryptographic mechanism that verifies the authenticity and integrity of digital messages or documents.

A blockchain architecture that separates execution, consensus, settlement, and data availability into independent layers, enabling specialisation and improved scalability.

InterPlanetary File System — a peer-to-peer distributed file system for storing and sharing data in a decentralised manner.

A decentralised oracle network that connects smart contracts with external data sources, APIs, and payment systems.

A service that provides external real-world data to blockchain smart contracts that cannot access off-chain information directly.

A cryptocurrency token that grants holders voting rights on protocol decisions and changes.

A digital form of fiat currency issued and regulated by a country's central bank on blockchain infrastructure.

A digital asset on a blockchain that represents ownership of a regulated financial instrument such as equity, debt, or revenue share, subject to securities laws.

An uncollateralised loan in DeFi that must be borrowed and repaid within a single blockchain transaction.