# On-Chain Finality ⎊ Area ⎊ Resource 3

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## What is the Finality of On-Chain Finality?

On-chain finality refers to the guarantee that a transaction cannot be reversed once confirmed by the network. This concept is central to the integrity of decentralized finance, providing assurance for settlement of derivatives contracts. Different blockchain architectures achieve finality through varying mechanisms, impacting transaction speed and security.

## What is the Settlement of On-Chain Finality?

The speed of settlement for derivatives depends directly on the finality of the underlying blockchain. In high-frequency trading, rapid finality reduces counterparty risk and allows for faster capital recycling. Slow finality introduces settlement risk, requiring longer collateral lock-up periods for on-chain derivatives.

## What is the Consensus of On-Chain Finality?

The consensus mechanism determines how finality is achieved. Proof-of-work blockchains offer probabilistic finality, where a transaction's irreversibility increases with each new block. Proof-of-stake systems often implement deterministic finality, where a transaction is finalized after a specific number of validators attest to it, providing greater certainty in a shorter timeframe.


---

## [Off-Chain Data Availability](https://term.greeks.live/term/off-chain-data-availability/)

## [Latency Optimized Settlement](https://term.greeks.live/term/latency-optimized-settlement/)

## [Hybrid Matching Engine](https://term.greeks.live/term/hybrid-matching-engine/)

## [Transaction Finality Metrics](https://term.greeks.live/term/transaction-finality-metrics/)

## [Immutable Transaction Finality](https://term.greeks.live/term/immutable-transaction-finality/)

---

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**Original URL:** https://term.greeks.live/area/on-chain-finality/resource/3/