What Are the Main Risks Associated with Using "Unconfirmed" Data in Financial Models? ⎊ Path

What Are the Main Risks Associated with Using “Unconfirmed” Data in Financial Models?

The main risks of using unconfirmed data, such as an unconfirmed transaction or an unexecuted derivative order, in financial models are uncertainty, potential invalidation, and double-counting. An unconfirmed transaction can be replaced by RBF or simply never confirmed, invalidating any model that assumed its finality.

Similarly, unexecuted orders can be canceled or expire. Models based on such data risk significant errors in liquidity, exposure, or net position calculations.

What Is “Replace-by-Fee” (RBF) and How Does It Affect Miners?

What Is the Practical Difference between “Opt-in RBF” and “Full RBF”?

What Is the Replace-by-Fee (RBF) Protocol and How Is It Activated?

How Does the Concept of “Economic Finality” Differ from “Cryptographic Finality”?

What Are the Key Risks Associated with Deploying Complex Financial Smart Contracts?

What Is a “Mempool” and How Does RBF Interact with It?

How Does a ‘Replace-by-Fee’ (RBF) Transaction Work?

How Does the Concept of “Double-Spending” Differ from RBF?