Optimistic Settlement

Optimistic Settlement is a blockchain mechanism that makes transactions faster and cheaper by settling transactions off-chain but posting the transaction data on-chain. Instead of checking every transaction immediately, the system processes them quickly and only checks if there's a dispute.

In Mach, the term "optimistic" refers to the smart contract processing a proposed match before the transaction has been fully-settled on both chains. No risk is taken on by the user, and there are other active security measures, as well as an extra layer of insurance from Mach and market-makers.

If something goes wrong with the trade, the system will challenge the match to protect users from any potential loss of funds. This challenge mechanism is powered by LayerZero, which automatically freezes funds and sends messages to check if there are issues on either chain.