Definition ∞ Capital flow efficiency denotes the speed and cost with which financial resources move between economic agents or markets. In digital asset systems, this often pertains to the reduction of intermediaries and transaction fees. High efficiency allows for quicker allocation of capital to productive uses. It represents a key advantage of blockchain-based financial systems over traditional ones.
Context ∞ Improving capital flow efficiency remains a primary objective for many blockchain protocols and decentralized finance initiatives. Challenges persist in scaling these systems to handle large transaction volumes without compromising security or decentralization. Regulatory frameworks are slowly adapting to the accelerated pace of digital capital transfers, seeking to monitor movements without impeding innovation.
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