How Does the Latency of a Blockchain Network Affect Atomic Settlement?
High network latency (slow block confirmation times) increases the duration of the time window in which the atomic swap must be completed. This extended time window increases the risk of price fluctuation (slippage) between the trade agreement and final settlement.
It also requires longer timelocks in the HTLC, potentially tying up capital for longer, making the process less efficient for high-frequency institutional trading.
Glossar
Timelocks
Definition ⎊ Timelocks are smart contract mechanisms that delay the execution of certain actions until a specified time or block number has passed.
Atomic Swap
Swap ⎊ Atomic swaps represent a peer-to-peer exchange mechanism enabling the direct transfer of cryptocurrencies across disparate blockchains without reliance on centralized intermediaries.