RE: LeoThread 2026-03-26 04-12

1️⃣ APR vs. APY
APR (Annual Percentage Rate): The simple annual interest earned.
APY (Annual Percentage Yield): Accounts for compounding — assumes earnings are continuously reinvested, so APY typically appears higher!

2️⃣ Layer 1 (L1) vs. Layer 2 (L2)
L1: The base protocol (Ethereum, Bitcoin).
L2: A scaling layer built on top of an L1 that batches transactions for speed and lower cost, then settles proofs back to the L1.

3️⃣ Hot Wallet vs. Cold Storage
Hot Wallet: Internet-connected (browser extensions, phone apps). Convenient for regular DeFi use but more exposed.
Cold Storage: An offline physical device (e.g., a hardware wallet). Much harder to hack.

4️⃣ Market Cap vs. FDV
Market Cap: Current price × circulating supply — the value of coins currently in circulation. FDV (Fully Diluted Valuation): Current price × total max supply.

If FDV far exceeds market cap, large token unlocks and inflation may be imminent.

5️⃣ Hard fork vs. Soft fork
Soft fork: A backward-compatible protocol upgrade; the network stays unified. Hard fork: A permanent rule split.

If consensus fails on an upgrade, the chain can split into two separate coins (for example BTC and BCH).

6️⃣ Gas fees vs. Slippage
Gas fee: The fee paid to validators to process a transaction.
Slippage: The hidden trading cost — the difference between the expected price and the executed price when the market moves mid-trade.

7️⃣ Bonding vs. Staking
Staking: Locking native tokens to validate transactions in a PoS network. Bonding: Locking assets as collateral.

In some protocols, nodes bond tokens like $CACAO to financially underwrite large amounts of liquidity.