Definition ∞ On-chain applications are decentralized programs or services that execute directly on a blockchain network, leveraging its distributed ledger and smart contract capabilities. These applications, often called dApps, operate transparently and immutably, with all their logic and data recorded on the public ledger. They benefit from the security and censorship resistance inherent to the underlying blockchain. Examples include decentralized exchanges, lending protocols, and NFT marketplaces.
Context ∞ On-chain applications represent the core functionality of many blockchain ecosystems, with news frequently reporting on their development, user activity, and security audits. Reports often detail new dApp launches, upgrades to existing protocols, or vulnerabilities discovered in smart contracts. A key discussion involves balancing scalability and transaction costs with the security and decentralization benefits of on-chain execution. The continued expansion of layer-2 solutions aims to improve the performance of these applications.
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