On-chain metadata, such as transaction details, smart contract code, and token attributes, is an integral part of the blockchain’s data structure, permanently stored and replicated across network nodes. In contrast, off-chain metadata is stored externally using cryptographic references, enhancing the blockchain’s efficiency and flexibility.

The blockchain’s data structure itself contains on-chain metadata. This information is permanently preserved and replicated across all network nodes and forms an integral part of the blockchain’s distributed ledger. Most on-chain metadata is stored within actual transactions. On the blockchain, each transaction includes a payload with associated metadata. For example, when sending cryptocurrency between addresses, the sender, recipient, amount, and transaction date are recorded as on-chain metadata.

For smart contracts, the contract’s code and accompanying data are stored on the blockchain as on-chain metadata. This includes the contract’s functions, state variables, and related data. Each block has a header that provides easily verifiable metadata, such as the block timestamp, block number, and transaction ID. Metadata regarding token attributes—such as token name, symbol, and supply—is often stored on the blockchain for tokens like Ethereum’s ERC-721 and ERC-20.

In contrast, off-chain metadata is stored outside the blockchain. It can be kept in various places, including off-chain scaling solutions like the Lightning Network, decentralized storage systems like the InterPlanetary File System (IPFS), and external databases. The blockchain uses cryptographic hashes or pointers to reference off-chain metadata, which can free up space on the blockchain for larger or less critical data storage, reduce congestion, and provide flexibility for applications requiring private or dynamic information.