An Introduction to On-Chain Finance and Its Benefits

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With the way blockchain has proven to the world as the best technology that is capable of revolutionizing how the financial sectors, business, and other sectors should operate better, many sectors such as banking, business, agriculture, hospital, health, and others are beginning to key into the blockchain industry.

The transparency that blockchain is bringing to the world in such a way that as a user of a blockchain network, you can track whatever transaction that has occurred on the blockchain network which with many others the financial sectors are now getting interested in blockchain. Today, many blockchain solutions such as (DeFi) Decentralized finance, and On-Chain Finance are transforming our financial sector. Let's first know what On-Chain Finance means briefly.

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On-Chain Finance

Instead, if you struggling to call it On-Chain Finance, you can call it OnFi which is a shorter name. Any traditional financial activities such as transactions or changes of infrastructure that move into a blockchain network, have simply done what is known as On-Chain. This means it is the migration of traditional financial activities onto a blockchain network.

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On a blockchain network, you can track your asset, since it is stored in a digital ledger and run mostly by smart contracts which help to execute many functions in a more decentralized and transparent way, than traditional finance sector.

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Benefits of On-Chain

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To streamline and modernize the way our traditional financial sectors are operating is the reason for the creation of On-Chain Finance and to bring more benefits into the blockchain space. However, there are so many benefits of having On-Chain Finance and some of the benefits have been shared below.

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• FOR TRACEABILITY & TRANSPARENCY

Transparency and traceability are what make blockchain so unique that whatever transaction such as transfer, receive and others can be viewed on a blockchain that is based On-Chain.

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• GREATER SECURITY

On-chain depends on cryptographic algorithms and smart contracts and not private programs like what the traditional finance sector is using. In a nutshell, On-Chain provides stronger security for users.

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• ELIMINATING INTERMEDIARIES (THIRD PARTIES)

In traditional financial sectors, third parties are usually involved which can make a transaction to be slow and costly. In a blockchain, there is nothing like having a third party or waiting for someone to come and approve your transaction for a fee. On-Chain is helping traditional financial sectors to eliminate third parties through the use of smart contract services.

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• IMPROVED ACCESSIBILITY

In traditional financial sectors opportunities aren't open to everyone, which is restricted to certain people and countries, whereas blockchain provides opportunities for everyone across the world. It is globally accessible to anyone interested in tapping into the services.

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Conclusion

_{On-chain finance helps to reduce operational costs which are mostly incurred in our financial sector. There are so many benefits of blockchain that we can't finish to discuss about here in this post. We have learned that On-Chain means the migration of the traditional financial sector into a blockchain.}