Onchain Trading

Definition ∞ Onchain Trading describes the direct exchange of digital assets that occurs entirely on a blockchain network, typically through decentralized exchanges (DEXs) or peer-to-peer protocols. Unlike centralized exchanges, these transactions are executed via smart contracts, removing the need for an intermediary to hold funds. This method offers enhanced security, censorship resistance, and direct ownership of assets throughout the trading process. Onchain trading aligns with the decentralized principles of cryptocurrency.
Context ∞ The state of onchain trading is continuously advancing, with improvements in network scalability and user interface design. A key debate concerns the trade-offs between the security of onchain trading and the speed and cost efficiency offered by centralized platforms. Future developments will likely focus on reducing transaction fees, increasing transaction speeds, and improving liquidity across various decentralized trading venues.