What Is the Primary Difference between a Traditional Option and a Tokenized Crypto Option?

The primary difference is the settlement mechanism and counterparty risk. A traditional option relies on a centralized clearing house and manual settlement, incurring counterparty risk.

A tokenized crypto option is a self-executing smart contract that automatically settles on the blockchain, eliminating counterparty risk through collateralization. The tokenized option can also be traded instantly on-chain, offering superior liquidity and transparency compared to traditional OTC options.