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What Is the Main Drawback of Using Atomic Settlement for High-Frequency Trading?

The main drawback is the inherent latency and cost associated with on-chain transactions. Atomic settlement requires transactions to be confirmed on the blockchain, which can take seconds or minutes, making it too slow for the millisecond execution speeds required by high-frequency trading (HFT) strategies.

HFT typically relies on off-chain or layer-2 solutions for speed.

What Is ‘High-Frequency Trading’ (HFT) and Its Relation to Latency?
How Does Co-Location or Proximity Hosting Reduce Latency for Market Data?
Why Is Proof-of-Work (PoW) Unsuitable for a Permissioned Financial Network?
How Does the Use of High-Frequency Trading (HFT) Algorithms Relate to Front-Running Accusations?