Encyclopedia
Blockchain Trilemma: Definition and Trade-Offs
Definition
The blockchain trilemma — a concept articulated by Ethereum co-founder Vitalik Buterin — posits that blockchain networks can optimise for at most two …
Crypto Custody: Definition and Swiss Regulatory Framework
Definition
Crypto custody refers to the safekeeping and management of private keys that control access to digital assets on a blockchain. Because ownership of …
DeFi: Decentralised Finance Definition and Swiss Landscape
Definition
Decentralised finance — universally abbreviated as DeFi — refers to a category of financial services and applications built on public blockchain …
Gas Fees: Definition, Mechanics and Optimisation
Definition
Gas fees are the transaction fees paid by users to compensate the validators (or miners, on proof-of-work networks) who process and confirm …
Layer 2: Definition, Types and Swiss Projects
Definition
Layer 2 (L2) refers to a category of blockchain scaling solutions that process transactions off the main blockchain (Layer 1) whilst inheriting its …
Staking: Definition, Mechanics and Swiss Tax Treatment
Definition
Staking is the process of locking cryptocurrency tokens in a proof-of-stake blockchain network to participate in transaction validation and network …
Tokenomics: Definition and Design Principles
Definition
Tokenomics — a portmanteau of “token” and “economics” — refers to the economic design of a cryptocurrency or digital token. …
Zero-Knowledge Proofs: Definition and Applications
Definition
A zero-knowledge proof (ZK proof) is a cryptographic method by which one party (the prover) can demonstrate to another party (the verifier) that a …
Stablecoins: FINMA Classification, Swiss Legal Treatment, and the Swiss Franc Stablecoin Market
Stablecoins — blockchain tokens designed to maintain a stable value relative to a reference asset — are the most commercially significant intersection of blockchain technology and traditional finance. In Switzerland, FINMA's token classification framework produces a specific and commercially significant outcome: most fiat-backed stablecoins are payment tokens, which means their issuers must navigate Swiss banking law to operate legally. Understanding this framework is essential for anyone building or using stablecoins in Crypto Valley.
Crypto Valley: Definition and Geographic Scope
Crypto Valley is not a formal designation — it is a collective name for Switzerland's blockchain and digital asset ecosystem, centred on the canton of Zug and extending across the Zurich metropolitan area. The name was coined in 2013-2014 as the first blockchain companies and foundations began accumulating in Zug, and has since become the recognised brand for one of the world's most significant financial technology ecosystems.
DLT Securities (Registerwertrechte): Switzerland's Tokenised Securities Framework
DLT securities — Registerwertrechte in Swiss law — are the legal instrument that makes regulated tokenisation possible in Switzerland. Created by the Federal DLT Act (effective February 2021), they are securities that exist only on a blockchain, with full legal rights enforceable under the Swiss Code of Obligations. Sygnum and AMINA Bank issue them. SIX Digital Exchange trades them. They are Switzerland's most significant contribution to global securities law in a generation.
ICO (Initial Coin Offering): Definition, History, and Switzerland's Role
The ICO boom of 2017-2018 was the event that put Crypto Valley on the world's financial map. Switzerland — particularly Zug — was the world's leading ICO jurisdiction, processing the largest token sales in history and developing the regulatory framework (FINMA's 2018 ICO guidelines) that became the global template for token regulation.
Proof of Stake: The Consensus Mechanism Powering Crypto Valley's Protocols
Proof of Stake is the consensus mechanism that replaced energy-intensive mining across the blockchain ecosystem. Every major protocol governed by a Zug-based foundation — Ethereum, Cardano, Polkadot, Tezos, Solana, NEAR — uses a proof-of-stake variant. Understanding PoS is essential for understanding how these networks operate and how staking rewards are treated for institutional investors.
Smart Contract: Definition and Swiss Regulatory Treatment
Smart contracts are the programming primitive that transforms blockchain from a payments network into a programmable financial infrastructure. Vitalik Buterin conceived them as the core innovation of Ethereum — the network governed by the Ethereum Foundation in Zug. Understanding smart contracts is prerequisite to understanding DeFi, tokenisation, and the legal questions the Swiss DLT Act addressed.
Stiftung (Swiss Foundation): Definition and Blockchain Applications
A Stiftung — the German word for foundation — is Switzerland's mission-locked, non-profit legal entity. It has no shareholders, no owners, and its assets are irrevocably dedicated to its stated purpose. It is the legal structure chosen by the Ethereum Foundation, Web3 Foundation, Cardano Foundation, Tezos Foundation, Solana Foundation, NEAR Foundation, and dozens of other major blockchain protocol foundations based in Zug.