How Does the Withdrawal Period of an Optimistic Rollup Affect a Trader’s Capital Efficiency?

Optimistic Rollups impose a challenge period (typically 7 days) during which transactions can be disputed. This means that withdrawing funds from the Layer 2 back to Layer 1 requires waiting for this period to expire.

This long waiting time ties up a trader's capital, reducing its efficiency and creating a significant liquidity hurdle, especially for HFT or arbitrage strategies that require rapid capital redeployment.