L fintech glossary terms

Laffer Curve

Tax rate vs tax revenue.

Laissez Faire

Free market with no intervention.

Latency

Time for data to travel.

Layer 0

Network infrastructure underlying Layer 1 blockchains.

Layer 1

Base blockchain protocol.

Layer 2

Protocol built on top of a blockchain.

Layer 3

App-specific chains on L2.

LBO

Leveraged Buyout; buying with borrowed money.

Lease

Contract renting property.

Ledger

Book of financial accounts.

Legacy Code

Old code still in use.

Letter of Credit

Bank guarantee for payment.

Leverage

Using borrowed capital to increase investment potential.

Liability

Something a person or company owes, usually a sum of money.

Liability Insurance

Insurance covering legal responsibility for harm to others.

Libor

London Interbank Offered Rate.

License

Permission to use software.

Life Insurance

Insurance paying beneficiaries upon policyholder death.

LIFO

Last In, First Out.

Light Client

Wallet downloading only block headers.

Lightning Network

Layer 2 payment protocol.

Limit Order

Order to buy/sell at a specific price or better.

Line of Credit

Flexible loan amount.

Liquid Staking

Staking while keeping liquidity.

Liquidate

To convert assets into cash.

Liquidation

Selling off assets to pay creditors.

Liquidation Threshold

Point at which collateral is sold to cover debt.

Liquidity

Ease with which an asset can be converted into cash.

Liquidity Mining

Earning tokens by providing liquidity.

Liquidity Pool

Collection of funds locked in a smart contract.

Liquidity Risk

Risk of not being able to sell.

LLM

Large Language Model.

Load Balancer

Distributes network traffic across multiple servers.

Load Balancing

Distributing traffic across servers.

Loan Shark

Illegal moneylender.

Local Storage

Storage in browser.

Lock-up Period

Period executing cannot sell.

Logic Gate

Building block of digital circuit.

Long Position

Buying a security with the expectation it will rise in value.

Loss Leader

Product sold at loss to attract customers.

Lot

Standardized quantity of a financial instrument.

LTE

Long Term Evolution (4G).