Testnet
Quick Answer
A testnet is a separate blockchain using valueless tokens for development testing. Payment integrations should always be tested on testnets (Sepolia, Amoy) before mainnet deployment.
Full Definition
A testnet is a separate blockchain network used for development and testing that mirrors mainnet functionality but uses valueless tokens. Developers deploy and test smart contracts, payment integrations, and transaction flows on testnets before going live. Popular testnets include Sepolia (Ethereum), Amoy (Polygon), and Devnet (Solana). Testing on testnets is free and prevents costly errors on mainnet.
Related Terms
Token
A token is a digital asset created on an existing blockchain via smart contract standards (ERC-20, BEP-20). Payment gateways convert any supported token to the merchant's settlement preference.
Tokenisation
Tokenisation represents real-world assets (property, equity, invoices) as digital tokens on blockchain, enabling global transfer, fractional ownership, and programmable payment models.
Transaction Fee
Transaction fees combine network fees (gas) and service fees. Crypto gateways typically charge 0.5-1.5% versus card payments' 1.5-3.5%, with even larger savings on cross-border transactions.
Transaction Hash (TxHash)
A transaction hash is a unique hexadecimal identifier for a blockchain transaction, used to track payment status on block explorers and provide irrefutable proof of payment.
Travel Rule
The Travel Rule requires VASPs to share sender/receiver identification for qualifying transactions, originating from FATF Recommendation 16 to prevent money laundering in cross-border crypto.
TVL (Total Value Locked)
TVL is the total crypto deposited in a DeFi protocol's smart contracts. Higher TVL in liquidity pools means deeper liquidity and better exchange rates for payment settlement.