Settlement Efficiency

Definition ∞ Settlement efficiency refers to the speed and cost-effectiveness with which financial transactions are finalized. In digital asset markets, this involves the rapid and low-cost transfer of value from one party to another. Highly efficient settlement systems reduce counterparty risk and facilitate smoother trading operations. This metric is a key consideration for the adoption of new financial technologies.
Context ∞ Discussions regarding settlement efficiency are currently focused on the comparative performance of various blockchain protocols and traditional payment systems. Key debates involve the impact of transaction finality times and associated fees on market liquidity and operational costs. Analysts are evaluating the potential for distributed ledger technology to revolutionize existing settlement infrastructures.