How Does DLT Handle Netting of Obligations between Multiple Counterparties?

Netting is the process of offsetting multiple obligations between parties to arrive at a single, final payment. On a DLT, smart contracts can be programmed to automatically calculate and execute multilateral netting in real-time.

By having all obligations recorded on a shared ledger, the netting calculation is transparent and instantly verifiable by all participants, reducing the need for manual reconciliation and improving capital efficiency.