An educational crypto, finance, and AI vocabulary puzzle about stablecoin design, how markets match orders, grounded AI responses, and portable digital identity.
Stablecoin Mechanics
Stablecoin designs use reserves, redemption processes, collateral, and transparency practices to support their stated value objective.
Reserve AssetRedemptionOvercollateralizationAttestation - Reserve Asset: A reserve asset is an asset held to support a stablecoin's ability to meet stated redemption or stability objectives.
- Redemption: Redemption is the process of exchanging a token for an underlying asset or its stated reference value under the issuer's rules.
- Overcollateralization: Overcollateralization means pledged collateral is worth more than the associated debt or issued asset, creating a buffer against value changes.
- Attestation: An attestation is a report in which an independent party states whether specified information, such as reserve balances, met stated criteria at a point in time.
Market Microstructure
Market microstructure describes how orders, quotes, liquidity, and trading venues shape transaction prices and execution.
Order BookBid-Ask SpreadMarket MakerSlippage - Order Book: An order book is a continuously updated list of buy and sell orders organized by price and quantity.
- Bid-Ask Spread: The bid-ask spread is the difference between the highest quoted buy price and the lowest quoted sell price for an asset.
- Market Maker: A market maker quotes prices to buy and sell an asset, helping other participants find liquidity for trades.
- Slippage: Slippage is the difference between an expected transaction price and the actual execution price, often influenced by liquidity and order size.
Retrieval-Augmented Generation
Retrieval-augmented generation finds relevant sources before generation, helping a model ground responses in supplied material.
EmbeddingVector DatabaseRetrieverContext Window
- Embedding: An embedding is a numerical representation of data such as text that lets systems compare semantic similarity.
- Vector Database: A vector database stores embeddings and helps retrieve items that are mathematically similar to a query.
- Retriever: A retriever is a system component that selects relevant documents or passages for a model to use as context.
- Context Window: A context window is the amount of input information an AI model can consider at one time when producing an output.
Decentralized Identity
Decentralized identity lets people hold identifiers and verifiable claims while deciding when and how to share them.
Decentralized IdentifierVerifiable CredentialCredential IssuerSelective Disclosure
- Decentralized Identifier: A decentralized identifier is an identifier designed to be created and controlled by its subject without depending on one central registry.
- Verifiable Credential: A verifiable credential is a digital statement about a subject that can be checked for authenticity and integrity.
- Credential Issuer: A credential issuer is an entity that creates and signs a credential asserting information about a subject.
- Selective Disclosure: Selective disclosure lets a person prove a needed fact from a credential while limiting exposure of unrelated personal information.