How Does the Speed of Block Finality Impact the Effectiveness of Atomic Settlement?
Block finality is the time it takes for a transaction to be considered irreversible on a blockchain. Slower finality increases the time window during which an atomic settlement could potentially be reversed or fail, adding risk.
Faster finality reduces this time window, making the settlement more secure and closer to instantaneous, which is ideal for high-value or time-sensitive derivatives.
Glossar
Speed
Velocity ⎊ Speed within cryptocurrency, options, and derivatives contexts primarily denotes the rate at which transactions are processed and confirmed, impacting market efficiency and arbitrage opportunities.
Atomic Settlement
Execution ⎊ The simultaneous exchange of assets occurs only when all predefined conditions of a smart contract are met.
Atomic Swaps
Exchange ⎊ A protocol allowing for the direct, peer-to-peer exchange of one cryptocurrency for another across disparate blockchain networks without the need for a centralized intermediary or custodian.
Block Finality Impact
Consequence ⎊ The certainty of a block's finality directly dictates the operational risk profile for any on-chain derivatives settlement or large-scale crypto transaction.