In Derivatives Trading, What Risks Are Mitigated by the Increased Finality of Layer 2?

Increased transaction finality on Layer 2 mitigates the risk of front-running and miner extractable value (MEV) in derivatives trading. Quick finality ensures that a trader's order is confirmed and executed before malicious actors can manipulate the order or block.

This is crucial for time-sensitive operations like liquidations or margin calls in perpetual futures and options. It also reduces settlement risk, as the outcome of a trade is confirmed much faster and more reliably.