Definition ∞ Onchain funds are digital assets or capital directly recorded, managed, and verifiable on a blockchain ledger. These funds exist as cryptographic tokens or native cryptocurrencies, with all transactions publicly accessible and auditable on the network. Their movement and ownership are governed by the rules of the underlying blockchain protocol. This contrasts with offchain funds, which are managed by centralized intermediaries.
Context ∞ The management and security of onchain funds are central to decentralized finance (DeFi) and the broader digital asset ecosystem. News often reports on large movements of onchain funds by whales or institutional entities, which can influence market sentiment. Concerns around the security of smart contracts holding these funds, and regulatory approaches to their custody, are ongoing discussions. Understanding the flow of onchain funds provides crucial insight into market activity and protocol health.
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