Editor’s Note
Bybit has integrated Fireblocks’ off-exchange trading solution, allowing institutional clients to trade via a secure, shared wallet while reducing counterparty risk. This partnership highlights the growing focus on security and institutional infrastructure in the crypto exchange space.
Bybit has partnered with Fireblocks to integrate an off-exchange trading solution, aiming to reduce counterparty risk for institutional trades.
Fireblocks’ Off Exchange enables institutional traders to trade on centralized exchanges via an on-chain Multi-Party Computation (MPC) shared wallet.
MPC technology allows traders to allocate and mirror assets directly from a wallet they jointly control to an exchange. This protects their principal from counterparty risks such as hacks, bankruptcies, and fraud, while providing centralized exchanges with full on-chain transparency to ensure client accounts are fully collateralized.
According to Fireblocks, over the past 90 days, the Fireblocks Network where Off Exchange is deployed has facilitated over $3 billion in trades between institutional traders and more than 200 connected exchanges.
Bybit is integrating Fireblocks Off Exchange for several key benefits:
Enhanced Asset Protection and Security: The comprehensive MPC wallet used by Fireblocks Off Exchange programmatically locks and mirrors assets to connected exchanges. By locking funds in a Collateralized Vault Account (CVA), traders mitigate the risk of unauthorized access or asset loss, adding an extra layer of protection.
Real-Time Settlement and Transparency: The blockchain-native Fireblocks Off Exchange system enables real-time, on-chain settlement. This means trades and asset movements are recorded on the blockchain, providing transparency and traceability for Bybit and institutional clients without the need for custody of client assets.
Flexibility and Control: Once the CVA is rebalanced, institutional traders can withdraw assets to other venues or wallets, giving them greater control and the choice of the most suitable storage or trading options.
Increased Liquidity and Efficiency: The system enhances liquidity by optimizing capital allocation and facilitating faster, more efficient trading activity. This benefits both clients and exchanges, allowing them to better utilize resources and participate in a more liquid market environment.
Eugene Cheung, Head of Institutions at Bybit, stated the above. He added, “We collaborate with diverse partners to ensure client safety and operational efficiency. Through the newly launched Asset Management Account, Bybit offers our institutional clients a first-class trading experience.”
Richard Astle, Vice President of Business Development at Fireblocks Network, added the above.
Earlier this month, Bybit partnered with Copper to reduce the settlement cycle for digital asset trades from four hours to two hours. The new settlement cycle enhances security, lowers counterparty risk, and improves capital efficiency.
With settlement occurring every two hours, 24/7, traders can enjoy uninterrupted trading and settlement services, leading to more accurate record-keeping and a clearer view of institutional balances on Bybit.
This collaboration leverages Copper’s ClearLoop product for faster settlement times. The network also provides institutional clients with off-exchange trading and settlement solutions.
Institutional clients can securely store their digital assets in Copper’s MPC (Multi-Party Computation) wallets, making it easier to trade and settle across different ClearLoop-connected exchanges. MPC is a cryptographic technology that improves upon existing multi-signature methods by allowing wallet keys to be “split” among parties for increased security.