Definition ∞ On-chain cost refers to the expenses incurred for executing transactions or operations directly on a blockchain network. These costs, often paid in the network’s native cryptocurrency, compensate validators or miners for processing and securing the transaction. Factors such as network congestion, transaction complexity, and block space availability influence these fees.
Context ∞ In cryptocurrency news, on-chain costs are a recurring topic, particularly during periods of high network activity or congestion on popular blockchains like Ethereum. High on-chain costs can deter users and developers, impacting the usability and scalability of decentralized applications. Discussions around layer-2 solutions and protocol upgrades often center on reducing these transactional expenses to enhance network accessibility.
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