Market behavior adjusts to the capabilities of the infrastructure.
Traders become more conservative as the time for confirmation increases.
Liquidity traders increase spreads to hedge against the uncertainty.
This leads to a less efficient market overall.
Fast confirmation shortens the uncertainty period.
Fogo’s design emphasizes minimizing the time for settlement. This enables traders to make more frequent adjustments to their positions.
More frequent adjustments enable better price discovery.
Infrastructure that enables faster adjustments enables more responsive trading systems.
This is particularly valuable for applications that need to interact in real-time.
Systems with reliable settlement enable developers to create systems without accounting for infrastructure latencies.
Over time, ecosystems that provide stable execution times tend to host more sophisticated financial applications.
Infrastructure does not have to be adopted immediately to be valuable.
Value grows over time as applications begin to rely on its behavior.
Fogo’s path indicates a desire to facilitate an ecosystem in which execution times are stable.
This could have an effect on the long-term health of the ecosystem.
