Execution Risk Management

Transaction latency risk is associated with execution price and time uncertainty on digital assets while transacting on a blockchain where the algorithm for that cryptocurrency, due to its design, cannot process transactions rapidly. This risk exists for transactions taking place on a particular blockchain such as Ethereum or Bitcoin. This risk also exists when one Ethereum token is exchanged for another Ethereum token through a decentralized exchange like Uniswap.

When transacting on an exchange such as Gemini, transaction latency risk does not apply, since the trading is facilitated by Gemini’s infrastructure (much like trading in stocks on the NASDAQ or NYSE is facilitated by their own proprietary systems), and not by Ethereum. Since Ethereum is not facilitating the transaction (the transaction is not being tracked on the Ethereum blockchain), the latency or “traffic jams” associated with Ethereum or other blockchains are irrelevant.