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What Is the Counterparty Risk Associated with Decentralized Crypto Options Platforms?

The risk is that the counterparty or the smart contract fails to perform the obligation, unlike on centralized, guaranteed exchanges.
Greeks.Live04.11.25

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.

What Is the Main Liquidity Challenge Faced by Decentralized Options Platforms?
What Is the Specific Risk of “Counterparty Risk” That Dapps Aim to Minimize?
Compare the Counterparty Risk on a Centralized versus a Decentralized Options Exchange
How Do ZKPs Impact the Efficiency of Decentralized Options Trading Platforms?

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