> For the complete documentation index, see [llms.txt](https://docs.evedex.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.evedex.com/key-features-and-components/trading-platform-and-matching-engine/arbitrum-l3-and-on-chain-settlement.md).

# Arbitrum L2 and on-chain settlement

On-chain settlement refers to the process of finalizing transactions directly on Arbitrum. Unlike centralized exchanges, where trades are executed and settled off-chain within the exchange's internal ledger, EVEDEX leverages blockchain technology to ensure transparency, security, and self-custody.

The platform handles the following on Arbitrum:

* **Position and Funds Data**: Logs user trading positions and balances.
* **Liquidation and ADL Data**: Records liquidation events and ADL (Auto-Deleveraging) adjustments.
* **Funding Rates and Fees**: Tracks funding rates and trading fees paid.
* **Auditability**: Provides open, verifiable data for anyone to review.

We have shared the entire journey of our current blockchain solution on this [page](/key-features-and-components/advanced-layer-3-infrastructure.md). You can find detailed insights and background information there.

#### Interaction Between EVEDEX Core Engine and Blockchain

User actions are periodically recorded in the blockchain to verify and ensure the correctness of the backend data. Key scenarios include:

* **Periodic Updates**: User position data is written to the blockchain after sufficient changes have accumulated.
* **Withdrawals**: When a user withdraws funds, the data is recorded on-chain to verify backend correctness.


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