Glossary & Key Concepts

BioFoundry maintains a crypto-native focus while demystifying these mechanics for biotech professionals and newcomers to DeFi. This glossary serves as a bridge between the two worlds, explaining key concepts in accessible terms.

Key Terms

DeFi (Decentralized Finance)

A collection of blockchain-based financial tools and applications that operate without traditional intermediaries (like banks).

Analogy: If traditional finance is like going through a bank teller for a transaction, DeFi is like an autonomous vending machine for finance – it will exchange or manage assets for you automatically according to code.

Decentralized Science (DeSci)

An emerging movement that applies decentralization principles to scientific research and funding. This means using blockchain for things like sharing research data, crowdfunding experiments via tokens, and governing research directions via DAOs.

DAO (Decentralized Autonomous Organization)

A blockchain-based cooperative or organization governed by token holders rather than a traditional corporate board. Decisions in a DAO are made via proposals that members vote on, usually weighted by how many governance tokens they hold.

Analogy: Imagine a research institute where instead of a director making decisions, every member has a vote proportional to their stake – and all votes are tallied automatically by a transparent system.

Token (Cryptographic Token)

A digital asset on the blockchain that can represent various things: value, ownership, or rights within a project.

Analogy: A token can be likened to a stock share in a startup combined with a kickstarter reward tier – except it's more fluid, as you can trade it anytime on crypto exchanges.

Liquidity Pool

A pot of funds (two assets, like a project token and USDC) held in a smart contract that allows anyone to swap between those two assets.

Analogy: Think of a liquidity pool as a currency exchange booth at an airport, but instead of a human setting the exchange rate, the rate is set automatically by how much of each currency is in the booth.

Liquidity Bootstrapping Pool (LBP)

A specialized kind of liquidity pool used for launching tokens. It starts with a very unbalanced ratio and gradually shifts to a balanced ratio, causing the price of the new token to decline if nobody buys.

Analogy: You can think of an LBP like a dutch auction meets a currency exchange – initially the "ask" price is very high, and if no one buys, the price is gradually lowered automatically.

Staking

Locking up your tokens (making them unspendable for a period) in order to achieve something – either to secure a network or to earn rewards.

Analogy: If you're familiar with a certificate of deposit (CD) at a bank – you can't touch your money for X months, and you get interest – staking is similar but often with higher "interest" in the form of additional tokens.

Governance Token

A token specifically used to vote in a DAO's governance. Owning more gives more voting power, though some DAOs use mechanisms to balance power.

IP-NFT (Intellectual Property NFT)

A concept where a piece of intellectual property (like a patent, data set, or proprietary research material) is represented as a unique token (NFT) on the blockchain.

Analogy: It's like a deed to a property, but the property is a patent or data, and it's digital.

Protocol-Owned Liquidity (POL)

When the platform (protocol) itself owns a chunk of the liquidity in the pools, rather than all liquidity being owned by individual users.

Analogy: It's like an endowment fund that always maintains a certain amount of capital in an asset to keep it stable.