# Glossary of Relevant Terms

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<summary>Blockchain</summary>

Blockchain is a type of distributed digital ledger that creates and stores immutable data records. It uses cryptographic algorithms to secure the information stored and ensure its accuracy and authenticity.

Public blockchains such as Ethereum – the first and by far the most popular network to mint non-fungible tokens on – are what NFTs run on.

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<summary>Blockchain Gas Fee</summary>

A gas fee is a certain amount a user needs to pay for the blockchain to process their transaction. This fee fuels (hence the name) publicly-available blockchains such as Ethereum through incentivizing validators or miners – depending on the blockchain’s consensus mechanism – to add the transaction to the blockchain, like your transaction’s taxi fare.

Gas fees are determined by the supply and demand between the network’s validators.

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<summary>Blockchain Immutability</summary>

Blockchain immutability is the concept that once data – including smart contracts – has been added to a blockchain, it cannot be changed, altered, or erased. This is an important feature of blockchain technology, as it ensures that data is stored and accessed securely and reliably.

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<summary>Blockchain Consensus Mechanism</summary>

Blockchain consensus mechanisms are algorithms that enable a blockchain’s distributed networks to reach agreement on the state of a ledger they share – basically whether a transaction or any other data record is legit or not.

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<summary>Blockchain Protocol</summary>

Most of the time, the term blockchain protocol refers to either **(a)** a set of predetermined rules dictating the way a blockchain’s network operates, and which all its participant nodes should respect in order for the blockchain to function (the consensus algorithm, governance structure, incentives, penalties, etc.) and **(b)** a smart contract infrastructure programmed and deployed to a blockchain to serve a specific purpose.

In this white paper, you’re going to come across **(b)** as applied to Ownity’s blockchain side.

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<summary>Blockchain Smart Contract</summary>

Blockchain smart contracts are immutable self-enforcing programs containing if-then rules. This implies that the smart contract automatically executes the coded agreement once the set conditions are met. Trustelssly, without involving any third-party go-betweens such as escrow services, various platforms acting as custodians for your assets whether you like it or not, notaries, etc.

In **DeFi** – **decentralized finance** (as opposed to **CeFi**, or **centralized finance**) – smart contracts are used to securely and transparently facilitate the exchange of funds, property, services, or any other token of value.

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<summary>Digital Asset</summary>

**Digital** or **virtual assets** are any assets enabled by computer technology, stored only digitally, and come with a distinct usage right. This includes cryptographic ones such as fungible – used as **digital currencies** – and non-fungible blockchain tokens (ERC20, 721, & 1155).

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<summary>Cryptocurrency</summary>

Cryptocurrencies are a type of **digital currency**, with the others being CBDCs (central bank digital currencies), in which transactions are verified and records maintained by a blockchain, rather than by any centralized authority such as a bank.

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<summary>NFT</summary>

NFTs, short for **non-fungible tokens**, are digital assets that are unique and cannot be replicated.

They are stored on a blockchain and are used to represent ownership of any digital data such as works of art, photos, videos, sound recordings, valuable collectibles, in-game objects, property deeds and other records, membership passes, memorabilia and POAPs, soulbound tokens, tickets, and much more.

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<summary>ERC20</summary>

ERC20 is a standard for the minting of **fungible** (in other words, **interchangeable**, think how $1 is easily convertible into another $1) **tokens** on the Ethereum blockchain.

ERC20-like fungible token standards have been widely adopted across other blockchains (e.g. BEP20 on BNB Chain or TRC20 on TRON).

The standard defines how fungible tokens should be transferred between different blockchain participants in a secure, reliable, and predictable way whereby ensuring that one unit of a token issued on the blockchain is fully interchangeable with any other of its kind throughout the blockchain network and that the token can be natively supported by the apps launched on the blockchain.

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<summary>ERC721</summary>

ERC721 is a standard for the minting of **non-fungible** (in other words, **noninterchangeable** or **unique**, think how there’s only 1 authentic Mona Lisa in the Lourve) **tokens** on the Ethereum blockchain.

ERC721-like non-fungible token standards have been widely adopted across other blockchains (e.g. BEP721 on BNB Chain or FA2 on Tezos).

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<summary>ERC1155</summary>

ERC1155 is a standard allowing for the minting of both **fungible** & **non-fungible tokens** on the Ethereum blockchain. It’s an improvement over both the ERC20 and 721 standards.

It has been extensively used to represent identical but limited in-game assets (such as 100 swords of a particular kind - a supply much more limited than that of a typical ERC20 token but not a one-of-a-kind NFT anymore), among other uses.

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<summary>Minting</summary>

Minting is the process of generating new tokens on a blockchain.

Minting of an NFT includes committing to the blockchain the data it is going to represent.

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<summary>NFT Collection</summary>

An NFT collection – e.g. Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), CryptoPunks – is a coherent set of NFTs that is minted by one entity – one blockchain address (or several, if minted on a number of blockchains.)

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<summary>Co-Owned NFT</summary>

On Ownity, a co-owned NFT is one that a group of users has co-purchased by pooling ETH for its full listing price on OpenSea, LooksRare, or X2Y2. They then share the ownership and management of the NFT.

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<summary>NFT Fraction</summary>

On Ownity, an NFT fraction is a user’s equity in a co-owned NFT. It is based on the proportion of funds one contributed to the co-purchase of the NFT.\
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For example, if a person deposited 0.49 ETH for a 1 ETH co-purchase, they would own 49% of that NFT after it is co-purchased.

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<summary>NFT Marketplace</summary>

A platform that showcases NFTs for sale, allowing creators to earn from their works and owners and investors to trade (buy, sell, bid, negotiate, and sometimes swap) them for a small fee.

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<summary>External NFT Marketplace</summary>

On Ownity, either the OpenSea, LooksRare, or X2Y2 NFT marketplace from where Ownity aggregates all the prominent NFT collection listings and where co-owned or exclusively owned NFTs are listed for sale or delisted from by co-owners and exclusive owners respectively.

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<summary>NFT Co-Ownership</summary>

*Aka* **fractional**, **joint**, or **shared NFT ownership** is a barrier-defying way for people with different buying powers to invest as a group in NFTs that would normally be outside of their reach. It involves splitting up an NFT into smaller shares between co-owners.

Ownity’s **NFT Co-Ownership Suite** supplies an end-to-end journey: from **fractionalization** to subsequent **co-purchase** to **co-management** to **NFT fraction management**.

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<summary>NFT Fractionalization</summary>

On Ownity, it is the process of depositing funds by independent investors towards the co-purchase of an NFT at the listed price.

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<summary>NFT Co-Purchase</summary>

On Ownity, it is the smart-contract-automated sending of the investor-deposited funds by Ownity to the seller on Ownity’s native marketplace or OpenSea, LooksRare, or X2Y2, and the transfer of the bought NFT into the platform’s non-custodial smart contract for storage while co-owned.

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<summary>NFT Co-Management</summary>

*Aka* **DAO Management** or **DAO Voting**.

On Ownity, it is the practice of making decisions on what to do next with the co-owned NFT through voting the DAO way on whether to list it for sale or not, where and at what price, and whether to cancel its live sale listing.

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<summary>NFT Fraction Management</summary>

With co-owner groups on Ownity being DAOs, any one individual co-owner is free to sell or transfer their fraction or its portion.

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<summary>Live / Ongoing NFT Fractionalization</summary>

On Ownity, an NFT listing fractionalization that has not yet reached 100% and continues taking in user deposits towards the eventual co-purchase.

An NFT whose listing's Ownity page fractionalization bar has reached 100% is considered fully fractionalized and is immediately bought from the seller and brought into a special non-custodial storage smart contract.

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<summary>NFT Buyer</summary>

On Ownity, the person who participates in a **live NFT fractionalization** by depositing a part of the cost towards the NFT's eventual co-purchase, or buys a whole (100%) NFT.

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<summary>NFT Co-Owner</summary>

On Ownity, the person who acquired a fraction of an NFT through participation in its fractionalization and subsequent co-purchase, or bought a fraction off of Ownity’s **Fraction Market**.

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<summary>Sole / Exclusive NFT Owner</summary>

On Ownity, the person who owns 100% of an NFT by buying it whole or taking over the other co-owners’ fractions.

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<summary>NFT Fraction Buyer</summary>

On Ownity, the person who buys an NFT fraction off of the **Fraction Market**.

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<summary>NFT Fraction Seller</summary>

On Ownity, the person who sells an NFT fraction on the **Fraction Market**.

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<summary>NFT Fraction Recipient</summary>

On Ownity, the person who receives an NFT fraction from an **NFT Fraction Owner** via transfer.

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