diff --git a/README.md b/README.md
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@@ -143,3 +143,10 @@ For support please join our [Discord](https://discord.gg/buildonbase) post in `
 THE NODE SOFTWARE IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND. We make no guarantees about asset protection or security. Usage is subject to applicable laws and regulations.
 
 For more information, visit [docs.base.org](https://docs.base.org/).
+
+## Terminology
+
+- **Node** — a running instance participating in the Base network.
+- **Sequencer** — a component responsible for transaction ordering.
+- **L2** — the Base Layer 2 network built on Ethereum.
+