Off-Exchange Settlement

The reason OpenDelta has the ability to scale its products to hundreds of billions of dollars in TVL is because it is able to access the CeFi crypto derivatives markets in a trust-minimized way. Historically, centralized exchanges have been prone to hacks and unexpected bankruptcies. As a result, mitigation of the counterparty risk connected to trading on centralized exchanges is of paramount importance.

We mitigate this problem on a per-product basis by employing a system of Off-Exchange Settlement (OES) in combination with wallets secured by multi-signature and multi part computation technology.

OPB

All collateral is held on non-custodial wallets completely segregated from the exchanges and controlled by OpenDelta and third-party institutional-grade custodians. The funds that are exposed to the exchange are merely any unsettled P&L of the position. Periodic settlements (e.g once per day) ensure that this P&L never grows too large. In a scenario where an exchange unexpectedly ceases operations or is hacked, OpenDelta only incurs a loss on that day's unsettled P&L. The rest of the collateral is safely held in the segregated wallet.