Trading Efficiency

Definition ∞ Trading efficiency describes the speed, cost, and impact of executing financial transactions. It evaluates how effectively trades are processed, considering factors such as transaction fees, latency, slippage, and market liquidity. In digital asset markets, high trading efficiency implies minimal costs and rapid execution without significantly moving asset prices, even for large orders. Improving efficiency is a primary goal for exchanges and blockchain protocols seeking to attract greater trading volume and institutional participation.
Context ∞ Enhancing trading efficiency is a constant focus for cryptocurrency exchanges and decentralized finance (DeFi) platforms, frequently reported in industry news. Ongoing efforts involve developing faster blockchain networks, optimizing order matching engines, and reducing gas fees through layer-2 solutions. The pursuit of greater efficiency is crucial for attracting institutional capital and making digital asset markets more competitive with traditional financial systems.