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How Does a Decentralized Exchange (DEX) Utilize Smart Contracts for Derivatives Trading?

Contracts automate order matching, risk management, and settlement, enabling non-custodial, transparent derivatives trading directly from user wallets.
Greeks.Live06.11.25

How Does a Decentralized Exchange (DEX) Utilize Smart Contracts for Derivatives Trading?

DEXs use smart contracts to create a non-custodial trading environment. The contracts handle order matching (often via AMMs), risk management (collateral/liquidation), and trade settlement.

This allows users to trade derivatives directly from their wallets without depositing funds to a centralized entity, ensuring transparency and self-custody.

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