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Settlement

At the core of all blockchain networks lies the Settlement Layer, which acts as a decisive authority for transactions. Its vital role is to guarantee that every transaction becomes unalterable and eternally inscribed onto the blockchain once executed.

This layer plays a pivotal role in facilitating the transfer of digital assets and tokens between network participants, underpinning the financial infrastructure of the blockchain.

Purpose​

Purpose of the Settlement Layer serves several critical functions:

  • Finality and Security: It ensures that once a transaction is confirmed, it becomes irreversible and immutable. Settlement layers provide cryptographic guarantees that transactions are valid and cannot be altered.
  • Consensus and Order: Settlement layers use consensus mechanisms to agree on the order of transactions. They establish a common ground for all participants to reach a consensus.
  • Interoperability: In some architectures, the settlement layer facilitates communication and transaction settlement across different blockchain systems.