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What Is the Difference between an OTC Derivative and a Listed Derivative in Terms of Blockchain Settlement?

OTC derivatives are bespoke and benefit from complex smart contract automation; listed derivatives are standardized and gain from faster clearing.
Greeks.Live30.10.25

What Is the Difference between an OTC Derivative and a Listed Derivative in Terms of Blockchain Settlement?

OTC (Over-the-Counter) derivatives are privately negotiated and customized, requiring a blockchain to manage complex, bespoke contract terms and bilateral settlement. Listed derivatives are standardized and traded on an exchange, making their settlement simpler and often managed by a clearinghouse.

On a blockchain, OTC settlement benefits more from smart contract automation for the unique terms, whereas listed derivatives primarily gain from faster, transparent clearinghouse replacement functionality. The level of customization dictates the complexity of the on-chain settlement logic.

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