What Is the Counterparty Risk Associated with Decentralized Crypto Options Platforms?
Counterparty risk on decentralized finance (DeFi) options platforms is the risk that the party on the other side of the trade may not fulfill their obligation. While smart contracts aim to mitigate this, risks remain, such as smart contract bugs, platform insolvency, or oracle failure.
This differs from centralized exchanges, where the exchange acts as the counterparty guarantor.
Glossar
Decentralized Crypto Options
Access ⎊ Decentralized Crypto Options are derivative contracts settled and governed entirely by autonomous code on a blockchain, removing the need for centralized clearinghouses or traditional intermediaries.
Options Platforms
Architecture ⎊ Options platforms, within the cryptocurrency derivatives landscape, represent the technological infrastructure enabling the creation, listing, and trading of options contracts referencing digital assets.