Heat. Water can’t “burn” or even let things burn inside of it. Oil can get much hotter than water and can cause burning.
Heat breaks down molecules that we consider tough. Plant and animal cells, organic chemistry. This is why you can fry something and it will still turn out juicy inside.
The reason we put breading on things that we fry is to create an oil/water barrier. If you fry a naked piece of chicken the water will all evaporate out. The breading slows the water from steaming out.
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