Canton Variation
Margin
OTC crypto moves 24/7. Your margin settlement should too. Canton Variation Margin automates intraday margin settlement between counterparties, reducing credit risk and freeing capital that’s been locked up as buffer.
- Continuous
- Netted
- Atomic
The market runs continuously and the settlement cycle does not
Crypto trades every hour of every day. Variation margin between counterparties still tends to settle in batches, on a schedule inherited from markets that close overnight and at weekends.
Everything that happens between two cycles is exposure somebody is carrying. In a quiet week that gap costs very little. In a volatile one it is the whole risk.
Where the risk actually sits
The same trading period under both models. The area under each shape is exposure being carried.
From mark to confirmation
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Exposure is marked
Positions between two counterparties are marked as the market moves, rather than at a scheduled cut-off.
Continuous -
The obligation is netted
Amounts owed in each direction are netted to a single figure, so only the difference has to move.
Netted -
Settlement commits
The transfer commits atomically between the two counterparties. It either completes for both sides or it does not happen.
Atomic -
Both sides are confirmed
Each counterparty sees the settled state on its own node. There is no reconciliation step and no waiting on somebody else’s file.
No reconciliation
What changes for both counterparties
-
Less risk carried between cycles
Exposure that used to sit open until the next batch is cleared as it arises. The largest number a counterparty is exposed to gets much smaller.
-
Buffer capital released
Margin buffers exist to cover the gap between settlement cycles. Shorten the gap and a good part of the buffer stops being necessary.
-
No manual coordination
Transfers stop depending on somebody watching a screen during a volatile move. The workflow runs the same way at three in the morning as it does at midday.