Capital & Execution Risks

Manual trade execution in OTC markets creates operational and financial burdens for both buyers and sellers. Transactions often require significant collateral, prolonged settlement times, and reliance on manual enforcement, increasing the risk of disputes, manipulation, or failed deliveries.

• High escrow/collateral requirements – Traders must lock up additional capital to execute deals.

• Manual trade execution – Sellers must manually facilitate trades, increasing the risk of manipulation, settlement failures, and operational burdens.

• Settlement Risks in Off-Chain OTC Trades – Without on-chain enforcement, OTC deals rely on legal agreements and manual settlement. This leads to risks such as non-delivery, delayed transfers, or payment failures, leaving both buyers and sellers vulnerable.