Overview
This glossary lists the practical terms I use every day when interacting with a software wallet and DeFi protocols. Short definitions. Actionable context. A few step-by-step items where you actually need to act (like revoking approvals). I believe clear terms reduce mistakes.
Who should read this? New wallet users who want to understand seed phrases, network switching, gas mechanics and DeFi permissions. Intermediate users who want quick reminders and links to deeper guides.
Seed phrase glossary and account recovery
Seed phrase glossary
Seed phrase (or recovery phrase) — a sequence of words that represents the private keys for one or more accounts. The seed phrase is the single thing you need to restore your wallet on a new device. Keep it offline and in multiple secure locations.
Step by step: simple backup routine
- Write the seed phrase on paper or a metal backup. Don’t photograph it.
- Store copies in geographically separated, secure places.
- Test by restoring a new wallet (with a small test transfer) and then delete the test wallet.
For an expanded checklist see Backup & recovery guide. And yes, I once restored a test wallet wrong and learned to test immediately.
Network basics: EVM and Layer 2
EVM-compatible definition
evm-compatible definition: an EVM-compatible blockchain supports the Ethereum Virtual Machine instruction set. That means the same smart contract standards (like ERC-20) work across multiple networks with minimal changes. In practice you can use the same wallet UI patterns, token formats, and many developer tools across these chains.
If you want to switch networks safely, follow the steps in EVM chains & network switching.
What is Layer 2 (what is layer 2)
What is layer 2? Layer 2 (L2) refers to scaling solutions that execute transactions off the main chain and settle compressed data or proofs back to it. The benefit is much lower gas fees and faster throughput. The trade-off is that moving assets between L1 and L2 requires bridging, which adds complexity and potential delay.
For bridge instructions and safety tips see Cross-chain bridges.
Transactions, gas mechanics and EIP-1559
What is EIP-1559 (what is eip-1559)
what is eip-1559: EIP-1559 replaced the old auction-style fee market (on many EVM-compatible chains) with a base fee that is burned and a priority fee (tip) that goes to the validator. Wallets surface fields like "max fee" and "priority fee" so you can control speed versus cost.
In my experience, setting a modestly higher priority fee speeds confirmations without massively overpaying. When I first set this up I paid too much because I chose an aggressive priority fee; lesson learned: check recent block activity before hitting send.
For practical settings see Gas fees management.
Token approvals, allowances, and common DeFi actions
What is token allowance (what is token allowance)
what is token allowance? A token allowance is an on-chain permission a wallet gives to a smart contract so that contract can move tokens from the wallet on behalf of the user. It’s implemented with approve() + transferFrom() for ERC-20 tokens.
Unlimited allowances are convenient but risky: if a contract is compromised, the attacker can sweep any amount allowed.
How to revoke token approvals — step by step
- Open your wallet and find the approvals/permissions manager.
- Review each contract that has access: look for unlimited allowances first.
- Revoke or lower approvals you no longer use.
- Confirm the revocation (this is a regular on-chain transaction and will cost gas).
See a dedicated walk-through at Revoking approvals.
Connectivity: WalletConnect and dApp access
WalletConnect definition
walletconnect definition: WalletConnect is a secure protocol that connects a mobile wallet to web dApps via QR code scanning or deep links. The wallet signs transactions locally and sends only signatures to the dApp (the dApp never gets private keys). Sessions can persist across browsing sessions — so disconnect after use.
I’ve been using WalletConnect daily for months and have seen sessions remain active longer than expected (disconnect if you’re unsure). But always verify transaction details inside your wallet before signing — don’t trust a dApp UI alone.
See step-by-step connection guides: WalletConnect and the dApp browser.
Security, backups, and recovery best practices
- Biometric lock: convenient but not a replacement for a seed phrase backup. But don't rely on biometrics alone — they are a local convenience layer, not a recovery method.
- Transaction simulation: if the wallet shows a simulated outcome, use it. It can catch obvious mismatches.
- Phishing detection: inspect domains, check contract addresses on explorers, and avoid pasted links.
- Cloud backup: convenient but increases attack surface; if you use cloud backups, encrypt them.
If you lose your phone, restore from your seed phrase immediately. Follow the steps in Lost device recovery.
For fake apps and how to spot them see Phishing & fake apps.
Advanced features: staking, bridges, and smart-contract wallets
- Staking: wallets may surface validator lists and liquid staking tokens. Validator selection affects rewards and risk. See Staking in wallet.
- Cross-chain bridges: built-in bridges simplify flow but add smart-contract risk. I always test with a very small amount first.
- Account abstraction / smart-contract wallets: these enable features like gasless transactions, session keys, and batched transactions. They change how assets are controlled, so understand the recovery model. Read Account abstraction for details.
Form factor comparison: mobile vs extension vs desktop
| Feature / Form factor |
Mobile app |
Browser extension |
Desktop app |
| Best for |
On-the-go swaps, mobile dApp use, QR scans |
Desktop web dApps, fast injected provider |
Large portfolios, hardware wallet pairing |
| dApp access |
In-app browser + WalletConnect |
Injected provider for web dApps |
WalletConnect or native integrations |
| Security trade-offs |
Convenient; seed phrase on device |
Exposed in browser context while open |
Easier to pair hardware wallets |
| Pro tip |
Use biometrics plus seed backup |
Disconnect when done |
Use desktop for heavy account management |
NFTs and token management quick tips
- Add custom tokens only after verifying the contract address. See Add custom token.
- Hide spam NFTs where possible; metadata can be misleading.
- Track your portfolio using the built-in tools or export transactions for analysis. See Token management & portfolio.
FAQ
Q: Is it safe to keep crypto in a hot wallet?
A: Hot wallets are practical for daily DeFi interactions and small balances. For larger holdings use cold storage (hardware wallets). Apply basic hygiene: secure seed phrase, audit token approvals, and confirm transactions before signing.
Q: How do I revoke token approvals?
A: Use the wallet’s approvals manager or a trusted permissions tool to revoke or reduce allowances. Full steps are at Revoking approvals. I recommend checking approvals after heavy DeFi sessions.
Q: What happens if I lose my phone?
A: Restore from your seed phrase on a new device. Follow Lost device recovery for exact steps. Don’t rely on backups you can’t decrypt.
Q: How do I connect to a web dApp safely?
A: Prefer WalletConnect sessions, check the destination contract address, and always confirm the exact amounts and recipient addresses in your wallet before signing. See Connect to Uniswap or Connect PancakeSwap for examples.
Conclusion and next steps
Glossaries are helpful, but action matters. If you’re just getting started, complete Onboarding & setup and then secure your seed phrase with Backup & recovery. For hands-on interaction try a small swap following How to swap tokens and review approvals after trading via Revoking approvals.
Want more guides? Explore WalletConnect, Gas fees management, and Account abstraction. Small tests, repeated practice, and careful backups will make your daily DeFi interactions safer.
