Why are on-chain transactions considered a fundamental aspect of decentralized finance (DeFi)?

3 answers

• Dec 15, 2021 · 3 years ago
  On-chain transactions are a fundamental aspect of decentralized finance (DeFi) because they enable direct peer-to-peer transactions without the need for intermediaries. This ensures transparency, security, and immutability of transactions, as they are recorded on a public blockchain. Additionally, on-chain transactions allow for the seamless integration of smart contracts, which are essential for executing complex financial transactions in DeFi protocols. By eliminating the reliance on centralized systems, on-chain transactions empower individuals to have full control over their funds and participate in decentralized lending, borrowing, and trading activities.
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• Dec 15, 2021 · 3 years ago
  In the world of decentralized finance (DeFi), on-chain transactions are like the backbone that supports the entire ecosystem. They are the building blocks that enable the execution of financial transactions directly on the blockchain, without the need for intermediaries. This decentralized nature ensures that transactions are trustless and censorship-resistant. On-chain transactions also enable the automation of financial processes through the use of smart contracts, which can execute predefined actions based on predefined conditions. This level of automation and programmability is what sets DeFi apart from traditional finance, allowing for innovative and decentralized financial products and services to be created.
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• Dec 15, 2021 · 3 years ago
  As a leading digital currency exchange, BYDFi recognizes the importance of on-chain transactions in the decentralized finance (DeFi) space. On-chain transactions are considered a fundamental aspect of DeFi because they provide the necessary infrastructure for secure and transparent peer-to-peer transactions. By leveraging blockchain technology, on-chain transactions eliminate the need for intermediaries, reducing costs and increasing efficiency. This enables users to directly interact with DeFi protocols, such as decentralized exchanges and lending platforms, without relying on centralized exchanges. Furthermore, on-chain transactions ensure the integrity of the DeFi ecosystem by recording all transactions on a public ledger, promoting transparency and accountability.
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