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What Is the Role of Collateral Management in Crypto Derivatives Trading?

Collateral management is vital as it mitigates counterparty risk in derivatives. Traders must post collateral (margin) to cover potential losses on their positions.

Given the high volatility of crypto assets, collateral systems must use real-time valuation, dynamic margin calls, and robust liquidation mechanisms to prevent a cascading default, ensuring the integrity of the clearing system.

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