#OnChainLendingSurge On-chain transactions occur directly on the blockchain, providing a level of security and transparency, but they can be slower and more expensive.

Off-chain transactions occur outside the main blockchain network and have characteristics such as speed and cost-effectiveness, but they may introduce complexities and security vulnerabilities.

Both on-chain and off-chain transactions play roles in the cryptocurrency ecosystem and address different needs and use cases.

Understanding on-chain transactions

On-chain transactions refer to those that occur directly on the blockchain. These transactions are recorded and validated on the blockchain, providing a level of security and transparency. When a user initiates an on-chain transaction, the details are transmitted to the network, where they undergo a validation process and inclusion in a block. This is achieved through consensus mechanisms, such as Proof of Work (PoW) or Proof of Stake (PoS), with the aim of ensuring that the transaction is recorded on the blockchain.