How Does a Cash-Settled Futures Contract Differ from a Physically-Settled One in This Context?

A physically-settled futures contract requires the actual delivery of the underlying asset (the low-difficulty coin) at expiration. A cash-settled contract only requires the payment of the profit or loss in cash (or a stablecoin), based on the difference between the contract price and the spot price at expiration.

For vulnerable altcoins, cash-settled contracts are preferred as they avoid the logistical and security risks of handling the potentially compromised physical asset.