6 Terms Every Web3 Professional Should Know
As a trader or an investor, it’s common to come across unfamiliar terms whether you’re in the stock market or new to cryptocurrency. It can…
As a trader or an investor, it’s common to come across unfamiliar terms whether you’re in the stock market or new to cryptocurrency. It can be overwhelming to learn all new terms like HODL, FOMO, and FUD, but they are essential if you want to keep up with what’s happening in the financial markets and Web3 scene.
To help you navigate through this terminology, Club Salad has created a glossary of the six most common terms in blockchain and cryptocurrency that every Web3 professional should have in their terminology.
FOMO — Fear of Missing Out
FOMO is an emotion that many investors feel when they fear missing out on a potential profit opportunity. This can surge to a rush of investors buying an asset, resulting in volatile price movements. However, investors who pick up and drop assets like hot potatoes may be indicative of a bull market as buying power is increased.
When extreme market conditions occur, emotions can run high, and many investors may make decisions based on FOMO. This can cause significant moves in both directions, which can trap traders who try to counter the crowd.
FUD — Fear, Uncertainty and Doubt
FUD is used to discredit or throw dirt on a particular company or project by spreading inaccurate information about it. This can be a competitive or tactical advantage or could also mean profiting off a stock price decline caused by the potentially damaging news.
The cryptocurrency space is particularly prone to FUD. Short-selling an asset and then releasing misleading news that discredits companies is a common tactic used by investors. By doing so, they can make large profits by buying put options or short selling.
It’s always wise to consider both sides of the coin and think about what people have to gain by sharing certain opinions. By doing so, you can try to avoid falling prey to misinformation campaigns and make informed decisions.
HODL, a misspelling of the word ‘hold,’ is a popular term used in the cryptocurrency market. It refers to the buy-and-hold investment strategy, where investors hold onto their investments despite price drops.
The HODLing strategy is particularly popular among investors who are not dedicated day traders but want to get price exposure to cryptocurrency. It is also used by investors who strongly believe in a particular project or token and intend to hold on to their investment for a longer time.
The strategy is similar to the buy-and-hold strategy used in traditional markets, where investors try to find undervalued assets and hold on to them for a long time.
Many investors in the cryptocurrency market adopt the HODLing strategy for Bitcoin, as they believe in its potential for long-term investment.
BUIDL is a term used in the cryptocurrency industry to describe individuals or organizations who focus on building the ecosystem regardless of market conditions. The term is derived from HODL and emphasizes the importance of creating real-world use cases for blockchain technology beyond speculation and meme coins.
BUIDLers are true believers in the potential of cryptocurrencies to bring positive change to the world, and they are actively working towards this goal. They prioritize the long-term success of their projects and understand the importance of building a strong infrastructure that can serve the larger community in the future.
BUIDL is a mindset that encourages the crypto community to focus on the practical application of blockchain technology rather than just its value as an investment. By promoting a culture of innovation and collaboration, BUIDLers can help drive the growth and adoption of cryptocurrencies for years to come.
KYC — Know Your Customer
Compliance with national and international regulations is a requirement for stock exchanges and trading platforms. The New York Stock Exchange (NYSE) and the NASDAQ, for instance, are subjected to United States government guidelines.
One such regulation is Know Your Customer (KYC), also known as Know Your Client, which mandates financial institutions to verify their customers’ identities. KYC guidelines are essential to reduce the risk of money laundering.
The Salad Ventures team has adopted this same approach by introducing our very own soul-bound token, the Salad Passport NFT. This NFT also requires a KYC process done through PERSONA, which is also widely used by other web3 projects and crypto exchanges for security and verification purposes.
Adding on, KYC regulations are not limited to the financial industry alone. Various other sectors must also adhere to these guidelines. KYC guidelines are typically part of a more extensive anti-money laundering policy.
DYOR — Do Your Own Research
DYOR, short for “Do Your Own Research” is a term commonly used in the financial markets, particularly in fundamental analysis. It emphasizes the importance of investors doing their own research and not relying on others to make investment decisions.
Successful investors typically conduct their own research and analysis to form their own opinions and investment strategies. This can lead to differing opinions among investors, which is a natural part of the investment and trading process.
It is important for investors to have their own unique trading strategies and to base their investment decisions on their own research and conclusions. While different opinions can lead to different strategies, successful investors share the common trait of conducting their own research and analysis to make informed investment decisions.
If you’re new to the world of Web3, you might feel overwhelmed by the jargon and abbreviations used in the industry. However, with a good understanding of the terms we’ve covered, you’ll feel more confident navigating this new industry.
Remember to always do your own research before believing in any FUD, avoid the temptation to blindly invest in coins that have reached all-time highs due to FOMO, and continue to HODL and BUIDL your investments for the long term.
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