How Does the Settlement Finality Time on Layer 2 Solutions Compare to Traditional Financial Market Settlement Times?

Layer 2 solutions offer significantly faster settlement finality than traditional financial markets. While a Layer 2 transaction can be considered final within seconds or minutes, traditional stock market trades settle in T+1 or T+2 (the trade date plus one or two business days).

For derivatives and other complex financial products, traditional settlement can take even longer. The near-instant settlement on Layer 2 networks reduces counterparty risk and frees up collateral and liquidity far more quickly than in legacy financial systems, representing a major improvement in capital efficiency.