Have you ever thought that every transfer you make on the blockchain is actually being "watched"?

Many newcomers are unfamiliar with the term KYT. But honestly, whether you're using an exchange or a self-custody wallet, this system is almost always behind the scenes.

**What is KYT?**

Full name: Know Your Transaction. Literally translated as "Understand Your Transaction." It sounds a bit like Big Brother, but this tool has indeed become a standard in the Web3 ecosystem.

**Why is it needed on the chain?**

It's quite simple—compliance. Exchanges and wallet service providers must ensure their platforms are not used for money laundering or funding illegal activities. KYT is their inspection tool, analyzing transaction patterns, source of funds, destination addresses, and other factors to determine whether a transfer is "clean."

**Can you feel it?**

Most of the time, you won't notice. But sometimes you'll find certain addresses marked as "risky," or a transfer being paused for review—that's KYT in action.

Although this mechanism is somewhat controversial (privacy enthusiasts have voiced concerns), at this stage, it is an essential feature for exchanges and legitimate wallets. Instead of resisting it, understanding how it works will help you navigate Web3 more intelligently.