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How Does a Smart Contract Reduce “Counterparty Risk” in a Derivative?

Collateral lock 100%. Automated execution checkmark. 0 default risk. Trustless ≠ trust required.
Greeks.Live29.10.25

How Does a Smart Contract Reduce “Counterparty Risk” in a Derivative?

A smart contract reduces counterparty risk by acting as a trustless escrow agent. Both parties' collateral is locked within the contract.

The contract automatically executes the payoff based on predefined, objective market conditions, eliminating the risk of one party defaulting on their obligation.

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