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Crypto, DeFi, RWA & regulation - explained
Plain-English, sourced explainers on the concepts that actually matter. No fluff, no hype.
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DeFi
Liquid Staking Token (LST)
A liquid staking token (LST) is a transferable receipt token a protocol mints when you stake a proof-of-stake asset like ETH. It accrues staking rewards while staying liquid, so you can trade it or use it as DeFi collateral instead of locking the underlying for the unbonding period.
Restaking
Restaking is the practice of reusing already-staked ETH (or its liquid staking tokens) to secure additional protocols beyond Ethereum itself, earning extra yield in exchange for taking on extra slashing risk. EigenLayer pioneered it; the model now spans multiple competing security layers.
Stablecoin
A stablecoin is a crypto token designed to hold a steady value, usually pegged 1:1 to a fiat currency like the US dollar and backed by reserves of cash and short-term government debt. It's the settlement layer that lets people move dollars on-chain without touching a bank.
Infrastructure
Account Abstraction
Account abstraction is the design pattern that lets a blockchain account behave like programmable code instead of a fixed keypair, so wallets can sponsor gas, batch transactions, recover lost keys, and enforce custom rules. On Ethereum it ships via ERC-4337 and EIP-7702.
Decentralized Verifier Network (DVN)
A Decentralized Verifier Network (DVN) is an independent service that attests to the integrity of a cross-chain message by checking its hash before delivery. Applications combine multiple DVNs into a configurable security stack rather than trusting a single bridge validator.
Intent-Based Architecture
Intent-based architecture is a design where users sign a declarative statement of the outcome they want — "swap X for at least Y" — and a competitive network of off-chain solvers figures out and executes the path. The user specifies the what; solvers handle the how.
Layer 2 Rollup
A Layer 2 rollup is a scaling protocol that executes transactions off the main chain, then posts compressed transaction data and proofs back to Ethereum for settlement. It inherits Ethereum's security while cutting fees by 90%+ and lifting throughput well past the base layer.
Shared Sequencing
Shared sequencing is infrastructure that lets multiple rollups outsource transaction ordering to one shared network instead of each running its own sequencer. The goal is atomic cross-rollup transactions, faster finality, and credibly neutral ordering that no single chain controls.
RWA
Permissioned DeFi
Permissioned DeFi is on-chain lending, trading, and yield infrastructure that gates participation behind identity and compliance checks — only KYC-verified, whitelisted wallets can supply or borrow, while the underlying smart contracts stay the same as their open counterparts.
Real-World Asset Tokenization
Real-world asset (RWA) tokenization is the process of issuing a blockchain token that represents a legal claim on an off-chain asset — a Treasury bill, a bond, real estate, or a commodity — so it can be held, transferred, and settled onchain.
Tokenized Treasury
A tokenized Treasury is a blockchain-based token that represents a claim on a fund holding short-term U.S. government debt — usually a regulated money market fund or T-bill portfolio — letting holders earn yield on-chain with near-instant settlement.
Regulation
MiCA (Markets in Crypto-Assets Regulation)
MiCA (Markets in Crypto-Assets Regulation) is the EU's unified rulebook for crypto-asset issuers and service providers, in force since 2023 and fully applicable to exchanges since December 30, 2024. It creates one license that passports across all 27 member states.
Proof of Reserves
Proof of Reserves (PoR) is a cryptographic method an exchange or custodian uses to prove it holds assets backing customer balances, usually by publishing a Merkle tree of liabilities and on-chain wallet attestations. It proves assets exist — it does not prove the firm is solvent.
Travel Rule (FATF)
The Travel Rule is a FATF anti-money-laundering requirement that forces crypto exchanges and other Virtual Asset Service Providers (VASPs) to collect and pass along sender and recipient identity data on transfers above a USD/EUR 1,000 threshold — mirroring the rule banks have followed for wire transfers since 1996.
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