On-Chain Trading

Definition ∞ On-chain trading refers to the execution of cryptocurrency trades directly on a blockchain network, without the intermediation of a centralized exchange. Transactions are recorded and settled transparently on the distributed ledger, offering enhanced security and auditability. This method typically involves decentralized exchanges (DEXs) or peer-to-peer trading facilitated by smart contracts. It represents a core aspect of decentralized finance operations.
Context ∞ News concerning on-chain trading often relates to the performance and user activity on decentralized exchanges (DEXs), as well as advancements in layer-2 scaling solutions that aim to improve transaction speed and reduce costs. Discussions frequently revolve around the security of smart contracts, the prevalence of impermanent loss for liquidity providers, and the competition between different DEX architectures. Analysts are evaluating the growing adoption of on-chain trading as an alternative to centralized platforms.