How Are Digital Asset Derivatives Typically Settled When Traded via an Institutional RFQ Platform?

Settlement often occurs bilaterally between the counterparties, either on-chain or off-chain through a trusted third-party settlement network. For physically settled crypto derivatives, the underlying digital assets are transferred from one party's wallet/custodian to the other.

For cash-settled derivatives, only the net cash difference is exchanged. Prime brokers or specialized custodians often facilitate the asset transfer and finality.