> For the complete documentation index, see [llms.txt](https://wisdomtree.gitbook.io/wisdomtree-gold-token/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://wisdomtree.gitbook.io/wisdomtree-gold-token/glossary.md). # Glossary ### 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.