How Does a Smart Contract Handle the Clearing and Settlement Process on a DEX? ▴ Learn

How Does a Smart Contract Handle the Clearing and Settlement Process on a DEX?

The smart contract handles clearing and settlement simultaneously and instantaneously upon trade execution. Since the contract holds the liquidity, it debits the input token from the user's wallet and credits the output token, all within the same atomic transaction.

This eliminates the need for a separate clearing house or settlement period, drastically reducing counterparty risk and time delays.

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