How Do Network Gas Fees Complicate the Economics of Physical Settlement?

Network gas fees, which are the transaction costs on a blockchain, complicate physical settlement by introducing a variable and potentially high cost to the delivery process. If the network is congested, gas fees can spike dramatically, making the transfer of the underlying crypto asset unexpectedly expensive.

This variability makes it difficult for the parties to accurately price the true cost of delivery at the time the contract is initiated, potentially eroding the profit of the seller.