How Does the Concept of ‘Settlement Risk’ in Derivatives Compare to Finality Risk in PoW?
Settlement risk in derivatives is the risk that one party fails to deliver on their obligation after the other party has already delivered, often due to time differences or counterparty default. This is analogous to finality risk in PoW, where a transaction might be considered confirmed but could still be reversed if a longer chain is found later.
Both are risks related to the certainty and completion of a financial or cryptographic commitment.