A finance-heavy puzzle connecting crypto market vocabulary with traditional market concepts.
Macro Drivers
Crypto prices often react to monetary policy, inflation data, and broad liquidity conditions.
- CPI: CPI is a consumer price index used as a common measure of inflation.
- FOMC: The FOMC is the Federal Open Market Committee, which sets key U.S. monetary policy decisions.
- Interest Rates: Interest rates influence borrowing costs, yields, and risk appetite across markets.
- Liquidity: Liquidity describes how easily assets can be traded without large price impact.
DeFi Yield
DeFi yield products use lending, collateral, and incentive mechanics to create returns and risks.
- APY: APY estimates annualized return after compounding, though crypto yields can change quickly.
- Yield Farming: Yield farming is the practice of allocating crypto assets to earn protocol incentives or fees.
- Lending Pool: A lending pool lets users supply assets that other users can borrow against collateral.
- Collateral: Collateral is an asset pledged to secure a loan or leveraged position.
Options Contracts
Options define directional rights, deadlines, and exercise prices.
Call OptionPut OptionStrike PriceExpiry
- Call Option: A call option gives the holder the right, but not the obligation, to buy an asset at a set price.
- Put Option: A put option gives the holder the right, but not the obligation, to sell an asset at a set price.
- Strike Price: The strike price is the price at which an option can be exercised.
- Expiry: Expiry is the date or time after which an option contract no longer exists.
Stablecoin Mechanics
Stablecoin risk depends on the peg mechanism, issuer reserves, and market confidence.
- USDC: USDC is a dollar-denominated stablecoin issued by Circle.
- Tether: Tether is the issuer of USDT, one of the largest dollar-linked stablecoins.
- Peg: A peg is the target value a stablecoin or currency arrangement tries to maintain.
- Reserve: Reserves are assets held to back redemptions or support a stablecoin's value.