On-Chain Markets

Definition ∞ On-chain markets are digital venues where the trading of assets, such as cryptocurrencies or non-fungible tokens, takes place directly on a blockchain. All transaction details, including order placements and trade executions, are recorded and settled on the distributed ledger. These markets typically operate through smart contracts, ensuring transparency and data immutability.
Context ∞ On-chain markets are fundamental to the decentralized finance ecosystem, providing users with direct control over their assets without needing traditional financial intermediaries. Current discussions frequently involve liquidity provision, temporary losses in automated market makers, and the security of smart contract code. Regulatory oversight and technological progress in scalability solutions remain crucial elements influencing their continued growth and acceptance.