On-Chain Exposure

Definition ∞ On-Chain Exposure refers to direct ownership or participation in digital assets and protocols recorded on a blockchain ledger. This includes holding cryptocurrencies in self-custodied wallets, providing liquidity to decentralized finance (DeFi) protocols, or interacting with smart contracts. It represents direct, verifiable interaction with the underlying blockchain technology. This contrasts with indirect exposure through traditional financial products.
Context ∞ Discussions about On-Chain Exposure are prevalent in crypto news, particularly when analyzing the activity and health of decentralized networks. Investors often consider their on-chain exposure to assess direct control over assets and participation in decentralized governance. Regulatory bodies are also examining how to monitor and regulate activities that constitute direct on-chain exposure, especially concerning DeFi.