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Probabilistic Settlement

Trading Term

Probabilistic settlement refers to a transaction confirmation model in which finality increases over time as additional blocks are added, but is never mathematically absolute. Instead of deterministic irreversibility at a fixed point, reversal probability declines exponentially with each confirmation.

In market terms, this resembles trade certainty improving as clearing risk diminishes—but without a formally defined settlement moment. For traders and market makers, probabilistic settlement introduces temporary reorganization risk, making confirmation depth a practical risk parameter for capital deployment and transfer decisions.

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