Definition ∞ Market friction refers to any cost or impediment that hinders the smooth and efficient execution of transactions in a market. These barriers can include transaction fees, slippage, regulatory hurdles, or liquidity constraints. High market friction increases the cost and complexity of trading or transferring assets.
Context ∞ In the context of digital assets, market friction can arise from high network fees, slow transaction confirmation times, or challenges in converting crypto to fiat currency. Decentralized finance (DeFi) aims to reduce certain types of friction, while regulatory compliance often introduces new ones. Understanding market friction is vital for assessing the efficiency and accessibility of various crypto platforms and protocols.
Blockchain Knowledge
Cryptocurrency Foundation
Cryptospace Newsfeed
