How Does ‘Atomic Settlement’ Relate to Tokenized Derivatives?
Atomic settlement means the simultaneous exchange of two assets (e.g. the derivative token and the payment) occurs instantly and automatically within a single, indivisible blockchain transaction. This eliminates counterparty risk and the need for traditional clearinghouses, a major advantage for tokenized derivatives.
Glossar
Simultaneous Exchange
Mechanism ⎊ Simultaneous Exchange, within cryptocurrency and derivatives, denotes the concurrent execution of offsetting transactions, typically across different venues or counterparties, designed to capitalize on fleeting arbitrage opportunities or manage counterparty risk.
Derivative Token
Valuation ⎊ Derivative Tokens represent contractual claims on underlying assets, often cryptocurrencies, whose value is derived from the performance of those assets or a benchmark.