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Glossary
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Chain Neutrality

This is also known as Blockchain Agnosticism.
It refers to the practice of supporting the best chain for a customer's needs depending on the underlying problem or use case.
Ankr is a single platform that provides multiple different chains.
As a multi-chain provider, Ankr is chain neutral; we don’t advocate for our users to adopt any particular chain in preference to another. For example, a question we often get from developers is “Should I build my project on Ethereum or Binance Smart Chain?”
Developers currently have to choose between the networks and ecosystem.
For example, one consideration is whether they want users to hold crypto assets on ETH (ERC20) or BSC (BEP20) and what the implications are. For example, a user holding USDT, the ERC20 version, cannot easily buy a NFT being sold with USDT, the BEP20 version.
Ankr is at the forefront of addressing these limitations. By working closely with developers, Ankr has pioneered the building of tools for cross-chain interoperability.

Cloud Computing

Cloud computing is the concept of software linking together physical servers to create on-demand resources for compute, network, and storage.
Ankr’s startup idea (and first whitepaper) sought to use idle processing power in data centers to build an open source cloud called the DCCN or “distributed cloud computing network”. In this initial model, a user could run any application on the ANKR decentralized cloud service. Since then, Ankr has completed a pivot to focus exclusively on serving the crypto economy.

Crypto Economy

The crypto economy is the use of incentives and cryptography to design open, decentralized systems, applications, and networks. Within this economy exist several movements attempting to bring about mass adoption of a new system.
The ANKR platform brings two movements together: web3 and decentralized finance (DeFI). The web3 movement is about decentralized applications, protocols, and smart contracts, while the DeFi movement creates the financial system for web3 —money embedded in infrastructure. By bringing them together in easy to use products and services; ANKR helps power the crypto economy.
A traditional economy needs three fundamentals: land (real estate), workers (productivity), and a financial system. In the crypto economy, web3 infrastructure functions as “digital real estate” providing the computational space for the blockchain network to work. Ankr’s DeFi service, StakeFI, integrates the financial system into web3 infrastructure. And developer projects running on this infrastructure make the economy productive.

DeFi Movement

DeFi or Decentralized Finance is a socio-technical movement of push and pull factors.
    1.
    DeFi is a push away from an overreliance on central financial intermediaries such as brokerages, exchanges, or banks that offer traditional financial instruments. This reflects a disenchantment with centralized banking practices as well as fiscal policies such as quantitative easing.
    2.
    DeFi is also a pull towards the emergence of blockchain-based forms of finance that support the direct transfer and exchange of value peer-to-peer across borders to anyone, anywhere in the world with an internet connection. These transactions are mediated by smart contract programs or DeFi protocols often run using open-source software - most commonly Ethereum.
Whilst Ethereum 1.0 has been a phenomenal success, it has been hampered by the limited number of transactions it can process, as well as high gas fees for each transaction.
DeFi projects have evolved to solve these pain points with the launch of newer chains adopting novel technology to improve transaction throughput, costs and scalability.
From Ankr’s point of view, DeFi is on track to become the financial system for the web 3.0 movement.

ETH2

Eth2 is a set of upgrades that improve the scalability, security, and sustainability of Ethereum. These upgrades are:
Beacon Chain - Phase 0
The Beacon Chain introduces Proof-of-Stake to Ethereum. Proof-of-Stake is the underlying mechanism that activates validators upon receipt of enough stake. For Ethereum, users need to stake 32 ETH to become a validator. Validators are chosen at random to create blocks and are responsible for checking and confirming blocks they don't create. A user's stake is also used as a way to incentivise good validator behavior by making deductions for missing a transaction or any other errors - intentional or otherwise.
Merge - Phase 1.5
This is the merging of the Ethereum Mainnet into the Proof-of-Stake system controlled and coordinated by the Beacon Chain.
Sharding - Phase 2
Sharding is a scalability and capacity improvement for ETH 2 using Shard chains to spread the network's load across 64 new chains. With shard chains, validators only need to store/run data for the shard they're validating, not the entire network. Lower hardware requirements and capacity enable more validators to participate.
Shard chains can only safely enter the Ethereum ecosystem with a proof-of-stake consensus mechanism in place.

EVM-Compatible

EVM, or Ethereum Virtual Machine, is a leading standard for smart-contract development. With EVM compatibility, developers can build the same way that they would do on Ethereum, and benefit from the same tools and applications.
This is particularly useful in addressing the scalability problems of Ethereum. Ethereum 1.0 is currently limited to 15 or so transactions per second, whilst rising transaction fees can make it extremely hard to move funds in a timely manner, especially when interacting with smart contracts.
EVM compatible blockchains can help users get past these hurdles.
Examples of EVM compatible blockchains are Binance Smart Chain, Polygon and Avalanche.
With Ankr’s support for EVM-compatible chains, developers can easily access other chains with the same functions and code, without getting locked into a single chain.

Binance Smart Chain

Binance Smart Chain solves the development challenges in adding new decentralized features for assets and community to the native DEX blockchain.
Binance Smart Chain is a standalone parallel Binance chain offering much requested Smart Contract and Virtual Machine functionality. The provision of a parallel chain ensures the continuance of existing Binance Chain performance capabilities in handling millions of trades in a short time.
Key Benefits
    Cross-chain communication meaning that users are free to create any tokenization, financial products, and digital assets on Binance Smart Chain or Binance Chain. Items on BSC can be manually and programmatically traded and circulated in the stable, high throughput, fast and friendly environment of Binance Chain whilst being able to operate these in a single interface and tooling ecosystem.
    Staking Involved Consensus and Governance.
    Ethereum Compatibility.

Polygon (formerly known as MATIC)

Polygon solves the problem of ecosystem fragmentation and development challenges in connecting Ethereum-compatible blockchain networks.
Polygon is a specialized protocol and framework for building and connecting blockchain networks. The Polygon platform is designed for ease of use and provides a structure for Ethereum scaling and infrastructure development. Its core component is Polygon SDK, a modular, flexible framework that supports building multiple types of applications.
Using Polygon, one can create Optimistic Rollup chains, ZK Rollup chains, stand-alone chains, or any other kind of infra required by the developer.
Key Benefits
Polygon enhances and transforms the Ethereum Network into a fully-fledged multi-chain system with the advantages of Ethereum’s security, ecosystem, and openness.

Avalanche

Avalanche is a smart contracts platform aiming to solve the problem of fragmentation in the global financial system by providing an internet-scale electronic payment system with a novel consensus mechanism. The Avalanche consensus engine solves the blockchain scalability trilemma of balancing speed, scalability and security in a number of novel ways. - Snowball Consensus Protocol - Inspired by gossip algorithms, this system works by repeatedly sampling the network at random and steering correct nodes towards a common outcome. Avalanche executes multiple Snowball instances with the aid of a Directed Acyclic Graph.
- DAG (Directed Acyclic Graph) - A non-linear data structure to store data and enable the partial ordering of decisions. DAG works with Snowball to resolve any conflicting (double-spend) transactions and achieve consensus and fast finality transactions at high speed, efficiency and security.
Unlike PoW and PoS there is no competition to create a new block and the Avalanche consensus engine is eco-friendly, energy efficient and does not require special computer hardware. It performs well in adversarial conditions and is resilient to "51% attacks."
Key Benefits
    Supports the building of application-specific blockchains, spanning permissioned (private) and permissionless (public) deployments.
    Provides high scalability for building decentralized applications (Dapps) with an incredibly fast consensus mechanism.
    Enables high customizability and the building of arbitrarily complex digital assets with custom rules, covenants, and riders (smart assets) through sub-networks.

Front Running

Front Running is a type of attack in which a bot sets a higher gas cost to complete a transaction by inspecting the mempool. The mempool is a type of holding area where transactions that have been broadcast to the network wait to be mined into blocks. The front-running robot analyzes and finds targets that can be attacked by continuously scanning transactions in the Mempool.
By creating mutually beneficial relationships with significant mining pools, Ankr is able to support miners to connect more efficiently and directly to nodes via API services. By enabling this syncing up with miners at scale, gas prices are virtually eliminated.

Geth

A hardened Go implementation of the Ethereum node client. Offers support for public transactions and clique PoA consensus. Ankr nodes use Geth.

Internet Bonds

Internet Bonds are also referred to as Synthetic Staked tokens, Staking Derivatives or Liquid Staking.
An Internet Bond is a Digital Work Agreement between a Proof-of-Stake (PoS) network (Bond Issuer) and a capital provider/staker (Bond Holder). The agreement gives the Bond Holder the right to provide work and earn rewards.

Liquidity Mining

Liquidity mining is a term used in DeFi to describe the process of supplying liquidity* (in the form of crypto assets) to decentralized financial platforms/protocols and in return receiving rewards (usually in the form of tokens) for doing so. *Supplying liquidity is also known as staking assets.
NOTE: Liquidity Mining is distinct from Yield Farming. Yield farming is a form of staking. Liquidity mining is a subset of yield farming. The main difference is that liquidity providers are compensated not just with fee revenue but also the platform’s own token.
This is a quick overview of how it works. (See StakeFi for more details.)
1. Buy crypto assets e.g. ETH and/or DAI. (Some protocols require asset pairs).
2. Find a platform or protocol to deposit your crypto assets on. (See StakeFi)
3. Typically, you will receive rewards in the form of tokens for depositing assets onto a platform or protocol.
4. Next, you can stake your tokens on the issuing protocol for further rewards or trade your tokens on an exchange. Decentralized exchanges (DEXs) such as Uniswap have all tokens listed for trade.
5. You can then earn additional yield by exchanging your tokens for a Stablecoin and depositing those onto a network or protocol.

Borrowing and Lending

You can choose to borrow a token or coin from a platform. This then allows you to either stake it back onto the same platform to earn rewards or stake it on another platform to earn rewards.

Liquid Staking (See Internet Bonds)

Multi-Chain Support

Multi-chain support provides the means for disparate blockchains to communicate with each other. It also provides the ability to share, see and access information across different blockchain networks.
Creating an ecosystem where different blockchains can communicate with each other easily depends on ease of integration with existing systems, the ability to initiate and perform transactions on other chains and transact between deployments by integrating apps and easy switching from one underlying platform to another.
Ankr is dedicated to providing this multi-chain support and interoperability via our Developer APIs.
Key benefits to dApp Developers:
    Easy information sharing and execution of smart contracts cross-chain.
    Potential for layering and expansion of functionality to create uniquely useful apps.

Nodes

Nodes are decentralized applications which run the blockchain; without them the blockchain would not exist.
Nodes are deployed on servers in data centers. Ankr uses independent data centers to host its nodes.

Parachain

Parachains form part of the Polkadot network. They allow transactions to be processed at the same time - in parallel - instead of one after the other. This removes the bottlenecks - delayed transaction finality and high transaction fees that arise with sequential processing on blockchains.
Parachains construct and propose blocks to validators (on a Relay Chain) before being added to the final chain. Each parachain can be optimised for a specific use.
Passive Earning
Passive earning refers to the ability to generate income at regular intervals without needing to exert much effort. In DeFi, there are several potential ways to earn passive income. NOTE: Some methods are less risky than others but all methods incur risk.
Earn Interest
Depositing assets onto a platform or protocol allows you to earn interest on your asset in much the same way as placing money into a savings account.

Proof-of-Work Blockchain

Consensus algorithm commonly called mining used in networks like Bitcoin, Ethereum 1.0, Dogecoin, and Litecoin.

Proof-of-Stake Blockchain

Proof of stake is a financial type consensus mechanism used by blockchain networks to achieve distributed consensus. Proof of stake blockchains use much less electricity than Proof-of-work blockchains, and can be hosted in traditional data centers.
Users stake crypto assets such as ETH to become a Validator in the network. Validators, sometimes referred to as staking nodes, check transactions and create new blocks. This allows all nodes on the network to agree on the state of the network.
Ankr runs a network of validators which power StakeFI, including a top three validator for BSC. In addition, users can deploy validators using Ankr’s 1-click node service.

Provider

Providers deploy nodes and validate transactions on the Ankr network. They invest resources to support and secure the Ankr infrastructure and in return they receive staking rewards.
They can do this in two ways:
    1.
    Running new Staking nodes
Providers can bring CPU, GPU, memory and free storage to connect to the StakeFi infrastructure using ANKR tokens. Providers host new Staking nodes.
2. Using Ankr Staking Nodes
Providers DO NOT host staking nodes themselves. They use Ankr staking nodes via sidecars running on an Ethereum 2.0 node.

Scalability Trilemma

The scalability trilemma refers to the inherent difficulty in maximizing three important attributes of blockchain systems: Decentralization, Scalability, and Security.
The trilemma claims that blockchain systems can maximize two at the expense of the third - meaning that all blockchain systems require trade-offs depending on the specific application and use case.
Blockchains are decentralized and secure by design. However, to build a high performance and reliable application, significant investments must be made in building and maintaining node infrastructure. Ankr helps to solve the scalability issue in proof-of-stake blockchain networks with our Developer API service.
The scalability trilemma manifests here with some elements of centralization via our node cluster architecture and RPC gateway.
Ankr addresses this tradeoff by adding “decentralization of power” into the service:
    1.
    Ankr is on a pathway towards being governed by its community through the ANKR DAO (Decentralized Autonomous Organization). Institutional investors are not allowed to buy up the majority of tokens hence ensuring the community is in power.
    2.
    The Developer API service has a slot auction mechanism for maintaining decentralization: Third party organizations run nodes which power the Developer API.
    3.
    Nodes are distributed across independent third party data centers across multiple geographic locations, and never in centralized public cloud providers.

Sidecar

Sidecar is Ankr software that manages a blockchain node (e.g. availability, capacity, and security).
Ankr users who want to be Providers can install and execute this software to stake their ANKR tokens and receive rewards.
Providers who stake using sidecars are expected to participate in the voting process. For participating in the voting process, the stakers will get rewards in ANKR tokens.
It also randomly chooses other nodes on the Ankr Staking infrastructure, checks their uptime, and reports to the smart contracts.

Synthetic Tokens (See Internet Bonds)

Stakers AKA Requesters

Stakers deposit crypto assets on blockchain networks/protocols and request staking services from a Provider.
They do not host a node themselves.
They can stake any amount - from 0.5 ETH, to thousands of ETH.

Traditional Staking

Staking involves locking crypto assets (stake) onto a blockchain network to support the security and operations of that network. In exchange for locking your crypto assets, rewards are received in return for validating blocks.
The protocol randomly assigns the right to validate a block at specific intervals. The chances of being chosen are proportional to the quantity of crypto assets locked up. The higher the stake, the greater the chance of being selected as the next block validator.
The basis for the allocation of rewards varies according to the protocol but can include the following:
    1.
    Number of coins being staked by a validator.
    2.
    Period of time validator has been actively staking.
    3.
    Number of coins on the network in total.
    4.
    Rate of inflation

Web 3.0 Movement

The Web 3.0 movement refers to the building of an internet of decentralized networks that no single entity controls. It is a movement away from the centralized corporations that currently dominate the web and profit from the data users generate.
The key innovation of these networks is the creation of platforms that no single entity controls, yet everyone can still trust.
Blockchain technology underlies the decentralization that is essential to the formation of Web 3.0 because it is open, trustless and permissionless. Decentralization and the enablement of value transfers between peers are the key building blocks of Web 3.0.
Ankr provides Web 3.0 infrastructure for individuals, developers, and enterprises.

Last modified 1mo ago