📑Glossary

This page lays out definitions of some of the technical and legal terms used throughout this document

Airdrop

When new tokens are created and distributed to wallets ‘for free’ i.e. based on past behavior that is deemed to have been in the interest of the application’s development.

Bid/Ask Spread

A bid/ask spread is the difference between the bid price and the ask price for a given asset. The bid price represents the highest price a buyer is willing to pay for the asset, while the ask price represents the lowest price a seller is willing to accept.

Blockchain

A type of distributed database. It is a growing database of time-stamped transactions that cannot be altered. Each new addition to the database is a ‘block’ of data that contains transactions. These transaction blocks are verified by a network of computers and added to the chain. Also termed ‘distributed ledger’.

• Decentralized exchange

• Sometimes referred to as a DEX, these allow users to buy and sell digital assets directly with each other, bypassing intermediaries that might impose fees, such as an exchange or clearinghouse.

Decentralized Finance

Decentralized Finance (DeFi) is an umbrella term for a collection of projects that use dApps (via ‘smart contracts’) to mimic the functionality or service typically provided by a centralized financial intermediary, e.g., a bank or an exchange.

DeFi may have the potential to lower traditional financial fees, create near-instant settlements of digital assets and have other uses from lending, borrowing, trading, payments and asset management.

Distributed Ledger Technology (DLT)

Distributed Ledger Technology (DLT) is a type of database that is shared and replicated across a network of computers (see Nodes).

One of the most well-known examples of distributed ledger technologies is a blockchain.

Digital Assets

A Digital Asset is a broad term referring to non-tangible forms of electronic records that represents an ownership of a unique item, such as a cryptocurrency, digital collectable, or digital token.

Document of Title

A document of title, such as the Gold Token, is a contract with, not an interest in, the bailee (i.e., WisdomTree Digital or its affiliate). A Gold Token user’s ability to obtain gold in exchange for a Gold Token depends upon WisdomTree Digital’s maintenance of the gold with the Custodian and compliance with the conditions for retrieval. The gold will be held in a customer account that would not be subject to the insolvency of the WisdomTree Digital.

Token

A token is a digital asset that represents a certain value, utility, or function on a blockchain network. Tokens are built on top of a blockchain via a decentralized application (see: dApp) and can be used for many purposes including representing financial assets, a vote, or stake in a project.

Two main types of tokens include:

• Security Tokens: Security Tokens represent ownership of a real-world asset such as a stock, bond, real estate, or artwork. They are subject to regulatory oversight and typically treated as financial securities

• Utility Tokens: These tokens grant a specific use case for the owner to a product or service on the blockchain. Tokens can be used or redeemed as part of smart contracts for different services.

Tokenization

Tokenization is the process of representing a real-world asset or utility as a digital asset on a blockchain. This allows the asset or utility to be securely transferred and stored on the blockchain leveraging the protocol’s efficiencies and accessibilities.

A few of the benefits of tokenization include, but are not limited to:

• Lower transaction costs

• Near instant settlement

• Improved security

• Greater accessibility

• Increased liquidity

Smart Contract

A smart contract is executable code stored on a blockchain that performs various functions enabling versatility in the system.