On-chain strategizing is the practice of developing and executing investment, trading, or protocol management strategies directly on a blockchain network, leveraging publicly available ledger data and smart contract functionalities. This involves analyzing real-time transaction flows, liquidity pool dynamics, and governance activities to inform decisions. It allows for the creation of automated strategies that react to market conditions or protocol events with transparency and immutability. This approach offers verifiable execution.
Context
On-chain strategizing is a rapidly evolving field, with advancements in decentralized finance tools and analytics. News often covers sophisticated trading bots, yield optimization strategies, and governance participation methods that operate entirely on-chain. The area presents both opportunities for enhanced market efficiency and risks related to front-running or complex smart contract interactions.
A new 'off-chain influence proofness' criterion exposes EIP-1559's vulnerability, necessitating a cryptographic second-price auction with on-chain miner reserves.
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