On-Chain Auditing

Definition ∞ On-chain auditing involves the direct inspection and verification of transactions, smart contract code, and other data recorded on a blockchain. This method offers unparalleled transparency and immutability, allowing for real-time validation of financial activities. It provides an independent and verifiable record of operations without relying on external attestations.
Context ∞ On-chain auditing is gaining prominence as a mechanism for enhancing transparency and accountability in decentralized finance (DeFi) and other blockchain applications. Regulators and investors increasingly seek verifiable proof of reserves and operational integrity, which on-chain methods can supply. News frequently covers new tools and methodologies improving the efficacy of these auditing practices.