What is a On-chain?
Quick Definition
On-chain refers to processes, transactions, or data that are recorded directly on a blockchain.
Full Definition
On-chain activity happens entirely within a blockchain network. When a token transfer is executed, a smart contract runs, or a balance is updated, it's recorded permanently on the blockchain. This is visible to anyone, verifiable by anyone, and unchangeable once confirmed. On-chain data is the foundation of blockchain's transparency: everything that happens on-chain leaves a permanent, auditable trail.
This represents a fundamental shift from traditional finance, where most transactions and balances are held in private databases controlled by individual institutions. On-chain activity is public by default. Anyone with an internet connection can verify a transaction, check a balance, or audit the activity of a protocol without permission and without needing to trust a single source.
Why on-chain transparency matters
For stablecoins, on-chain transparency is what enables trust at scale. Every token in circulation, every transfer, every supply change is recorded on the blockchain and can be verified independently. This makes it possible to audit the system continuously, in real time, without relying solely on the issuer's reports.
The combination of on-chain transparency (for the token) and off-chain accountability (for the reserves) is what makes well-designed stablecoins one of the most auditable financial instruments ever created.
What's on-chain with Steady
Everything that involves STDY tokens happens on-chain. Token balances, transfers, rebase events, and minting and burning are all recorded on the blockchain networks we operate on (Ethereum and Arbitrum). Anyone can verify their balance, the total supply, and the history of every transaction without needing to rely solely on our reporting. This on-chain transparency is one of the factors that makes Steady fundamentally different from traditional financial instruments.
Related Terms
Blockchain
ReadA blockchain is a distributed digital ledger that records transactions across a network of computers in a secure, transparent, and tamper-resistant way.
Blockchain Network
ReadA blockchain network is the system of connected participants and infrastructure that validates, records, and maintains data on a specific blockchain.
Off-chain
ReadOff-chain refers to processes, assets, or transactions that happen outside of a blockchain, typically within traditional financial or operational infrastructure.
Smart Contract
ReadA smart contract is a self-executing program that runs on a blockchain and automatically enforces the terms of an agreement when specific conditions are met.
Tokenization
ReadTokenization is the process of representing a real-world asset such as a currency, bond, or piece of property as a digital token on a blockchain.
Transparency Portal
ReadA transparency portal is a publicly accessible dashboard where a protocol publishes detailed information about its operations, reserves, and performance.
Other Glossary Items
Learn about common and essential terms related to Steady and other stablecoin protocols.
Algorithmic Stablecoin
ReadAn algorithmic stablecoin attempts to maintain its value through automated rules that adjust token supply based on market demand, rather than holding equivalent reserve assets.
AML
ReadAML (Anti-Money Laundering) refers to the laws, regulations, and procedures designed to prevent the use of financial systems for laundering the proceeds of crime.
APY
ReadAPY, or Annual Percentage Yield, is the standardized rate of return an asset generates over a year, including the effect of compounding.
Arbitrum
ReadArbitrum is a Layer 2 blockchain network built on top of Ethereum, designed to offer faster and cheaper transactions while inheriting Ethereum's security and infrastructure.
Asset Backing
ReadAsset backing refers to the real-world or on-chain assets held by the issuer to support the value of every token in circulation.
Asset Locking
ReadAsset locking refers to restricting access to funds for a defined period or condition, during which they cannot be transferred or used.
Asset Segregation
ReadAsset segregation is the practice of keeping client or backing assets separate from the issuer's operational funds, protecting them from the issuer's other obligations.
Audit
ReadAn audit is an independent examination of a protocol's code, reserves, or operations by qualified third parties to verify accuracy and compliance with stated claims.
Backing
ReadBacking refers to the assets or mechanisms that support a stablecoin's value and help it maintain its intended reference value.
Bridge
ReadA bridge is a mechanism that enables the transfer of assets or data between different blockchain networks.
Clarity Act
ReadThe Clarity Act is a proposed US legislative framework intended to clarify the regulatory treatment of digital assets, defining when they should be treated as securities versus commodities.
Collateralization / Over-collateralization
ReadCollateralization refers to the ratio between the value of assets held in reserve and the value of tokens issued. Over-collateralization means holding more in reserves than the value of tokens issued.
Composability
ReadComposability refers to the ability of different protocols, contracts, and tokens on a blockchain to interact and combine with each other seamlessly.
Counterparty Exposure
ReadCounterparty exposure refers to the risk that another party, such as a bank, custodian, broker, or service provider fails to fulfill its obligations, potentially affecting the assets or funds it holds.
Custodial vs. Non-Custodial
ReadCustodial means a third party holds the private keys to your assets on your behalf. Non-custodial means you hold your own keys and control your own assets directly.
LearnMoreAboutSteady
Transparency Portal
reserves, statements, audits, smart contract, and more.
FAQs
Discover the basics about Steady in our frequently asked questions.
Contact Us
questions, feel free to get in touch. We'll be happy to help.
