In the Context of Derivatives, How Does Immutability Secure Collateral?

Immutability ensures that the collateral locked within a smart contract for a derivative trade, such as a futures contract, cannot be moved or seized by any party outside of the contract's predefined rules. The contract's logic, which dictates liquidation or settlement, is permanently fixed.

This provides confidence to both counterparties that the collateral is secure and will only be released upon the agreed-upon conditions being met.