On-Chain Logic

Definition ∞ On-chain logic refers to the set of rules, computations, and smart contract code that are executed and verified directly on a blockchain’s distributed ledger. These operations are transparent, immutable, and subject to the network’s consensus mechanisms. It governs how digital assets behave, how decentralized applications function, and how value is transferred. This logic forms the core programmable layer of a blockchain system.
Context ∞ The discussion around on-chain logic often involves its security, efficiency, and the limitations of executing complex operations directly on the main chain. News reports frequently detail smart contract audits or protocol upgrades that alter this logic. A key debate centers on balancing the security and transparency of on-chain execution with the scalability and privacy offered by off-chain solutions.