Deciphr Academy
Module 21 · Flashcards

Staking and yield: key words

Read the word, say the meaning out loud, then open the card.

Yield

What an investment earns over a year, shown as a percentage of the amount put in. Source

Staking

Locking up a proof-of-stake network's coins so that they can be used to help run the network, in return for rewards. Source

Issuance

Creating new coins that did not exist before. On proof-of-stake networks, new coins are paid to validators as rewards. Source

MEV (maximal extractable value)

Extra value a block producer can take by choosing which transactions go into a block, and in what order. Source

Slashing

The penalty for provable cheating by a validator: part of its stake is destroyed and it is forced out of the network. Source

Inactivity leak

An Ethereum emergency rule that slowly drains the stake of offline validators until the active ones hold more than two-thirds of it. Source

Exit queue

The rate-limited wait to stop staking. How long it takes depends on how many others are leaving at the same time. Source

Withdrawal address

The address a validator's staked ETH and rewards are sent to. On Ethereum it can be set only once. Source

Staking as a service

Delegated staking: you deposit your own 32 ETH, and a third-party operator runs the validator for a fee. Source

Liquid staking token (LST)

A receipt token for coins staked through a pool, which can be traded or used while the coins stay staked. Source

Rebasing token

A token whose balance in your wallet changes as rewards, or losses, are added. Lido's stETH is one. Source

Restaking

Using coins that are already staked to help secure other services too, for extra rewards and extra risks. Source

Actively Validated Service (AVS)

A service, such as a price oracle or a bridge, that is secured by restaked ETH and pays rewards for it. Source

APR (annual percentage rate)

A yearly rate that does not include the effect of compounding. Source

APY (annual percentage yield)

A yearly rate that includes the effect of compounding, worked out over a 365-day year. Source

Token dilution

When new tokens are created, each existing token becomes a smaller share of the total supply. Source

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