What Is Delivery versus Payment (DVP) and How Is It Applied to Crypto Derivatives? ▴ Learn

What Is Delivery versus Payment (DVP) and How Is It Applied to Crypto Derivatives?

Delivery Versus Payment (DVP) is a settlement mechanism ensuring that the delivery of securities or assets occurs only if the corresponding payment occurs simultaneously. This eliminates principal risk, where one party delivers an asset but doesn't receive payment.

In crypto derivatives, DVP is often implemented via escrow or smart contracts on a blockchain. This ensures that the derivative cash flow or underlying asset transfer is contingent on the other leg of the transaction being fulfilled.

How Does the Concept of ‘Delivery versus Payment’ (DvP) Function on a Blockchain?

What Is the Difference between Settlement Risk and Credit Risk in This Context?

What Role Does a ‘Principal’ versus ‘Agent’ Play in OTC Crypto Trading?

How Does the Bid-Ask Spread Compare between a Principal OTC Desk and a Public Exchange?