Chapter 2 / 12·5 min read

The Base Layer: Wallets, Tokens, Chains, Gas, Stablecoins

Five words to lay down before everything else. Get these five and nothing later in the course will feel foreign.

The blockchain

A big public ledger, copied across thousands of computers, where every written line can never be erased. Nobody owns it, everybody can read it. Several competing ledgers exist: Ethereum, Base, Arbitrum, HyperEVM. Each one is called a chain, and Otomato watches twelve of them.

The wallet

Your account on that ledger. A public address, like an IBAN you can hand to anyone, and a private key, the password you never hand to anyone. One detail matters enormously for the rest of this course: because addresses are public, anyone can see what any address holds. That is exactly what lets Otomato monitor a portfolio with nothing more than the address itself.

The token

A line in the ledger that says "this address owns 12 of this thing". It can represent a currency, a share of a protocol, a voting right, a ticket. An NFT is just a token where every copy is unique, like a numbered trading card.

Gas

The toll. Writing into the ledger costs money, paid in the chain's own currency. That is why people batch their actions, and why everyone complains when the network is congested.

The stablecoin

A token built to always be worth one dollar: USDC, USDT, DAI. It is the cash of DeFi, because doing math in a currency that moves 8% a day is hell. When a stablecoin drifts from its dollar, that is a depeg, and it is one of the worst possible events: all of DeFi rests on the assumption that these tokens are worth 1.

Two measures you will see everywhere

TVL, APR, APY

TVL: the total value deposited in a protocol. Its size. APR and APY: annual yield. APR is the raw rate, APY accounts for interest going back to work (interest on interest). For the same product, APY always reads slightly higher than APR.
Check yourself:Why does Otomato only need your address, with no password and no signature?(tap to reveal)
Because the ledger is public. Your address is enough to read everything you own and everything you do. Otomato reads, it never writes. And that is also why it categorically cannot touch your funds: moving money requires the private key, which it never asks for.