Fireblocks Off Exchange Launched To Mitigate Counterparty Risk And Hack

2 mins mins

28 November 2023, 16:14:47 GMT +0000

Key Points:

Fireblocks has introduced Off Exchange to enhance security in centralized exchange trading.
Fireblocks Off Exchange offers on-chain transparency for centralized exchanges, starting with Deribit

Cryptocurrency custody platform Fireblocks has unveiled its latest innovation, Off Exchange, a groundbreaking feature designed to empower exchanges and asset management firms by mitigating exchange counterparty risks.

Fireblocks Off Exchange: A Paradigm Shift in Crypto Trading Security

The platform facilitates trading on Centralized Exchanges (CEX) through on-chain Multi-Party Computation (MPC) shared wallets, offering enhanced security against hacks, bankruptcy, and fraud.

Fireblocks Off Exchange leverages MPC technology, allowing traders to allocate and mirror assets directly to an exchange from a mutually controlled wallet. This not only protects their principal but also ensures complete on-chain transparency for centralized exchanges, verifying that client accounts are fully collateralized.

The launch of Fireblocks Off Exchange comes with initial support for Deribit, and it plans to integrate with other major exchanges, including HTX, ByBit, OKX, Gate.io, BIT, OneTrading, Coinhako, Bitget, in the coming months.

Taking a technology-first approach, Fireblocks Off Exchange eliminates various forms of exchange counterparty risk by programmatically locking funds in secure MPC-based shared wallets. This contrasts with traditional custodial solutions that transfer counterparty risk to centralized clearing parties.

This innovative solution enables real-time trade settlement and seamless movement of capital between venues and counterparties, empowering traders and exchanges to capitalize quickly on emerging trading opportunities.

Fireblocks Off Exchange is distinguished as the first blockchain-native solution, offering exchanges complete transparency to monitor and validate client collateral on-chain. This approach enables effective risk management without the need for custody, thereby increasing liquidity and capital efficiency for both exchanges and traders.

In addition to Off Exchange, Fireblocks recently introduced Non-Custodial Wallets-as-a-Service, allowing retail businesses to embed MPC wallets into their applications, providing end-users with full control of their keys.

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