The shift from traditional multi-day settlement cycles to near-instant on-chain settlement is a game-changer for institutional liquidity. In conventional markets, trades can take two to three days to settle, tying up capital and limiting how quickly institutions can redeploy funds. With on-chain settlement, transactions occur almost instantly, freeing up liquidity and allowing institutions to respond faster to market opportunities.
This improvement directly enhances market efficiency. Faster settlement reduces delays, minimizes price discrepancies, and enables smoother trading across multiple assets and markets. Institutions can execute strategies with greater confidence, knowing that the risk of failed or delayed settlements is drastically lowered.
Counterparty risk is also significantly impacted. Instant settlement removes the window in which one party might default or fail to deliver, reducing exposure and the need for complex risk mitigation measures. By lowering both settlement and counterparty risks, on-chain systems can make markets safer and more attractive for large-scale institutional participation.
Overall, near-instant settlement has the potential to transform financial markets, making them more liquid, efficient, and resilient. It marks a crucial step toward bridging traditional finance with blockchain-powered innovation, creating a more responsive and secure ecosystem for institutional investors.@Dusk #dusk $DUSK
