Onchain Strategies

Definition ∞ Onchain strategies are investment or operational approaches executed directly on a blockchain network using smart contracts and decentralized applications. These strategies leverage the transparency and immutability of the blockchain for activities like yield farming, liquidity provision, and decentralized lending. Participants interact with protocols without intermediaries, relying on code execution. This approach offers unique opportunities for automated and verifiable financial actions.
Context ∞ The development of onchain strategies has expanded significantly with the growth of decentralized finance, offering users new avenues for capital deployment and risk management. While offering high transparency and potential for automation, these strategies also carry risks associated with smart contract vulnerabilities and impermanent loss. Continuous audits and community oversight are crucial for the security of these protocols.