On-Chain Financial Products

Definition ∞ On-Chain Financial Products are financial instruments or services that are entirely built, executed, and settled on a blockchain network. These products leverage smart contracts for automated execution and offer features like transparency, immutability, and reduced reliance on intermediaries. Examples include decentralized lending protocols, tokenized assets, and automated market makers.
Context ∞ The rapid growth of decentralized finance (DeFi) has brought On-Chain Financial Products to the forefront of crypto news, with continuous innovation in lending, borrowing, and trading protocols. Regulatory bodies are closely observing these products, seeking to understand their risks and determine appropriate oversight mechanisms. The ongoing challenge involves balancing the permissionless nature of blockchain with the need for investor protection and market stability.