Fireblocks launches Off Exchange solution for increased liquidity

Rick Steves

“Fireblocks has closely partnered with the leading institutional firms and exchanges to develop Off Exchange, introducing a fundamental shift in how to simultaneously reduce risk and increase liquidity.”

Fireblocks has announced the launch of Fireblocks Off Exchange, a solution that mitigates exchange counterparty risk by enabling institutional traders to trade on centralized exchanges from an on-chain MPC shared wallet.

Exchange counterparty risks, such as cyber hacks, bankruptcy, and misappropriation of funds, are a concern in the crypto trading market. Traditional firms often hesitate to enter the crypto market due to these risks.

Fireblocks Off Exchange addresses these issues by using MPC technology, allowing traders to allocate and mirror assets from a mutually controlled wallet. This approach protects assets from various risks while providing centralized exchanges with on-chain transparency.

Fireblocks Off Exchange not a third-party cold storage solution

Unlike custodial solutions, Fireblocks Off Exchange uses a technology-first approach to eliminate exchange counterparty risk. Funds are secured in MPC-based shared wallets, avoiding centralized clearing party risks.

Fireblocks Off Exchange allows real-time trade settlement and capital movement between venues, enhancing liquidity and trading opportunities. It provides exchanges with on-chain transparency to monitor and validate client collateral, avoiding third-party cold storage solutions.

Since 2018, Fireblocks has focused on reducing counterparty risk in the digital asset ecosystem with innovations like MPC cryptography and Non-Custodial Wallets. The launch of Off Exchange is a significant step in this direction, leveraging new developments in MPC and blockchain technology.

Deribit first to join Fireblocks Off Exchange. HTX, Bybit, Gate.io to follow

Deribit is the first live exchange integration for this platform. Fireblocks is set to integrate with additional global exchanges in the coming months, including HTX, Bybit, Gate.io, and others.

Michael Shaulov, CEO of Fireblocks, said the Fireblocks Off Exchange is a result of partnerships with leading institutions and exchanges, aimed at reducing risk and increasing liquidity. We are excited to push the envelope of using innovative technology to solve the challenges of counterparty risk in digital assets. Fireblocks has closely partnered with the leading institutional firms and exchanges to develop Off Exchange, introducing a fundamental shift in how to simultaneously reduce risk and increase liquidity.”

Luuk Strijers, CCO of Deribit, commented: “Fireblocks has taken an innovative approach that uses MPC technology to reduce client capital deposited at exchanges, while providing our business with greater liquidity and transparency. We are excited to be the first exchange to integrate with Fireblocks Off Exchange and offer this new model of trading to a large ecosystem of institutional firms on the Fireblocks Network.”

Melvin Deng, CEO of QCP Capital, endorsed Fireblocks Off Exchange for its institutional-grade security and direct custody feature. “As a strong advocate for the institutionalization of the digital asset derivatives market, the need for institutional-grade security is paramount. We are pleased to be among the first users of Fireblocks Off Exchange, which mitigates exchange exposure through direct custody. This is another pivotal step forward for the industry towards a secure and capital-efficient derivatives trading ecosystem.”

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