Learn-to-Earn: 15 “I” Concepts You Must Understand in the Crypto Space
This article is a continuation of our Learn-to-Earn series tailored to acquaint our community and followers to the different DeFi concepts in the Web3 ecosystem. In this series, we will be delving into some major ‘I’ concepts for your mastery either as a newbie or better still to refresh your understanding as a professional.
These are private information used to identify a party or user on the internet. Typical examples of identity data include personal addresses and security numbers. Identity Data can be used to access the user’s financial details like credit card and bank account information.
Immutability simply means unchangeable and applies to Blockchain computer networks. It is a blockchain feature that permits an irreversible codification of data into the distributed ledger after executing a transaction. This feature allows a user to receive and send irreversible crypto transactions on the blockchain network. Immutability ensures data integrity for the various blockchain applications like dApp and blockchain cloud storage platforms.
An index fund is a pool or collection of various assets in different but constant ratios. In traditional finance, the portfolio managers manually initiate trades to maintain the pool’s intended balance when the need arises. But in DeFi, the fund rebalances automatically after each trade.
This is a token that can track the index of other assets or a group of cryptos. It is mostly used to track the Market Capitalization of DeFi projects and various Layer-1 smart contract blockchain networks. Good examples of such projects are Uniswap, Aave, and MakerDAO while the Layer 1 platform includes Ethereum, Polkadot, and Cardano. In addition, a synthetic index token can track stock indexes like NASDAQ or the S&P500.
Initial Coin Offering (ICO)
ICO refers to the process of creating and selling a token to raise funds for a new crypto project or product. It makes use of blockchain technology and can also be referred to as token sales. An ICO does not provide equity and shares to buyers; instead, it sells tokens or coins with claims of future utility in the project. However, Tokens launched via an ICO could be regarded as securities and could be regulated in some countries.
Initial DEX Offering (IDO)
IDO is a token sale or fundraising mechanism peculiar to blockchain projects. It is the process of launching a new token on a decentralized exchange (DEX). IDOs are sometimes preferred over other fundraising models like ICOs and IEOs because they provide a faster trading pair, lower listing costs, and instant liquidity.
Initial Exchange Offering (IEO)
An Initial Exchange Offering is a crypto fundraising or token distribution event conducted on a crypto exchange platform. According to the U.S Securities and Exchange Commission (SEC), individuals should invest in IEOs with caution. They added that the model may not be in line with Federal Security rules hence, may lack investor protection.
Initial Farm Offering (IFO)
Initial Farm Offerings via yield farming help new crypto projects to distribute their tokens to various users or traders. Traders who commit their liquidity tokens to the DEX protocol gain access to the new project token.
Initial Public Offering (IPO)
An IPO is a process by which a private company is transformed into a publicly traded company via the sale of its shares. These shares are securities representing a percentage of ownership transferred through sales to the public- the retail, and institutional investors. To successfully conduct an IPO, a company must comply with SEC guiding rules and regulations.
Inter-Blockchain Communication (IBC) Protocol
This is a protocol that enables cross-chain interaction and value exchange thereby enhancing interoperability among various blockchain networks. It was built by technological experts from Agoric, Tendermint, and the Interchain Foundation.
The process is also known as cross-chain communication. It improves inter-blockchain communication, mutual interaction, and exchange of value usually in token or crypto assets. Inter-Chain Communication is among the main blockchain technology that enhances its interoperability.
Interoperability is the ability of two or more blockchain protocols to interact and work with each other. It enables users to send cryptos and data across blockchains like Bitcoin and Ethereum. Its additional features include Layer -2 solutions and sidechains, wrapped cryptos, Smart contracts, and dApp communication between chains.
InterPlanetary File System (IPFS)
IPFS is a network designed by Protocol Labs for storing files and transferring verifiable data in a peer-to-peer (P2P) manner. The file system is equivalent to Filecoin, a blockchain developed to incentivize incessant data storage. Some popular crypto projects that use IPFS include Rarible, Unstoppable Domains Sandbox, and the Flow blockchain.
An internet meme is an idea expressed via text on an image or a short video spread among various internet users. These memes are often shared through different social media platforms and their formats continue to vary with time to represent trending news, cultures and so on.
Isolated Margin Trading (Derivatives Trading)
A type of margin trading whereby traders have the option of limiting their losses to a particular margin set. Hence, they limit the amount of margin allocated to each position and its associated risk. If you liquidate the position of a trader using the isolated margin trading mode, it will affect only the isolated margin balance and not the entire account balance.
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