On-chain trading volume refers to the total value of digital assets exchanged directly on a blockchain network, recorded as immutable transactions on the distributed ledger. This metric specifically counts trades executed through decentralized exchanges or peer-to-peer protocols, where assets are exchanged without relying on a centralized intermediary. It contrasts with off-chain volume, which occurs on centralized exchanges. High on-chain volume indicates robust activity and liquidity within decentralized finance applications.
Context
The growth of on-chain trading volume is a key indicator of the increasing adoption and maturity of decentralized finance ecosystems. A central discussion involves the scalability limitations of underlying blockchains and the associated transaction costs that can affect this volume. Innovations in Layer 2 solutions and rollup technologies are actively working to enhance network capacity, thereby supporting higher on-chain trading activity and reducing friction for users.
High-throughput perpetual DEXs surpassed $1.43T in monthly volume, validating specialized app-chain and Layer 2 architectures as the future of on-chain derivatives.
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