How Does a Network’s Difficulty Adjustment Mechanism Compare to Volatility Measures in Options Trading?
The difficulty adjustment mechanism is a form of negative feedback loop designed to stabilize the block time (a key operational variable). In options trading, volatility measures (like implied volatility) reflect market uncertainty.
While one is an internal protocol stability feature and the other is a market risk measure, both are dynamic mechanisms that react to changing external inputs (hash rate vs. market sentiment) to manage a target outcome.
