// GLOSSARY -- AGENTIC FINANCE
What is On-Chain Policy Enforcement?
Using smart contracts to verify spending rules on the blockchain — tamper-proof, transparent, and independently verifiable by anyone.
WHY IT MATTERS
Off-chain enforcement is fast but requires trust. On-chain removes this — rules in contracts, verifiable by anyone, enforced by consensus.
Smart account modules, guard contracts, and validation hooks implement it. A module rejecting transfers above $10,000 regardless of signer.
Trade-off: flexibility and gas cost. Best architectures combine off-chain evaluation (fast, rich) with on-chain verification (trustless, tamper-proof).
HOW POLICYLAYER USES THIS
PolicyLayer provides hybrid enforcement: off-chain for speed and expressiveness, on-chain anchoring for trust and auditability.
FREQUENTLY ASKED QUESTIONS
Why not all on-chain?
On-chain rules are limited to Solidity, cost gas per evaluation, and can't easily express time-based or cross-transaction logic. Off-chain fills these gaps.
How is trust established off-chain?
Cryptographic proofs of policy evaluation are anchored on-chain. Anyone can verify that a specific policy was applied to a specific transaction.
Gas cost?
Depends on complexity. Simple checks (amount limits) are cheap. Complex validations cost more. PolicyLayer minimizes on-chain computation by doing heavy lifting off-chain.