Collection 4 of 5 · 5 cards
Contracts & tokens
Some blockchains do more than record transfers: they run programs. This collection explains how those programs are metered, what tokens really are, how stablecoins are designed to hold their value, and how layer-2 systems try to handle more activity.
Cards in this collection
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What is gas?
Gas is the unit Ethereum uses to measure how much computational work a transaction needs; the fee a sender pays is the gas used multiplied by a fee per unit of gas.
2 min read
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What is a smart contract?
A smart contract is a program stored on a blockchain that runs exactly as written whenever a transaction calls it, with every node executing it and checking the same result.
2 min read
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What is a token?
A token is a unit recorded and managed by a smart contract on an existing blockchain, which can stand for almost anything — a vote, a ticket, a game item or a claim on something held elsewhere.
2 min read
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What is a stablecoin?
A stablecoin is a token designed to keep a steady value relative to something else — usually one national currency — by means of reserves, collateral or an algorithm.
2 min read
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What is a layer 2?
A layer 2 is a system built on top of a base blockchain that processes transactions away from the base chain but relies on that chain for security or final settlement.
2 min read