> ## Documentation Index
> Fetch the complete documentation index at: https://docs.canopy.deal/llms.txt
> Use this file to discover all available pages before exploring further.
# Canopy Block Markets: Collateralized OTC Order Books
Canopy organizes OTC liquidity into block markets — discrete trading venues defined by a specific asset pair, such as TECH/USDC. Rather than routing your order through an automated market maker or fragmenting it across a chain of liquidity pools, every fill in a block market executes directly against a collateralized offer created by another participant. There are no algorithms setting prices, no intermediaries earning spread, and no pool to rebalance against. Prices emerge from negotiation, and the protocol's only job is to enforce the terms both sides already agreed to.
## Anatomy of a Block Market
A block market aggregates all live offers for a given trading pair into a single view. Both sides of the book are composed entirely of fully escrowed offers — not intentions, not soft circles, not indicative quotes. When you see an offer, the collateral already exists.
```plaintext theme={null}
TECH / USDC
─────────────────────────────────────────
SELL (asks)
─────────────────────────────────────────
500,000 TECH @ 0.430 USDC
250,000 TECH @ 0.425 USDC
100,000 TECH @ 0.420 USDC
─────────────────────────────────────────
BUY (bids)
─────────────────────────────────────────
300,000 TECH @ 0.415 USDC
150,000 TECH @ 0.410 USDC
─────────────────────────────────────────
```
Every row in this book represents a distinct on-chain offer backed by escrowed collateral. The seller offering 500,000 TECH at 0.430 USDC has already deposited those 500,000 TECH into the protocol. There is no order that can appear without the underlying asset sitting in escrow first.
Trustless settlement means you do not need to evaluate your counterparty's creditworthiness, verify their identity, or rely on any off-chain agreement. If the offer is visible, the collateral is confirmed.
## Fully Collateralized Offers
The most important design principle in a Canopy block market is that an offer cannot exist without its collateral. When a seller creates an offer:
1. The asset is transferred into the venue's escrow.
2. The escrow balance is measured using actual received amounts — which correctly handles fee-on-transfer tokens.
3. Only after collateral is confirmed does the offer become visible and fillable.
This means the block market book has zero "phantom liquidity." Every size you see is real and immediately executable. Deferred claims — issued when a buyer fills a forward offer — are also constrained: the protocol enforces `claimToken.totalSupply() == series.backing` as an invariant, so claims can never exceed the collateral locked for that series.
Canopy holds no fractional reserves and creates no synthetic exposure. If a claim exists, the collateral exists. One market's backing is completely isolated from every other market's backing.
## Partial Fills
Large offers in a block market do not need to be filled in a single transaction. Canopy supports partial fills, which means:
* A 500,000 TECH sell offer can be filled by multiple buyers in separate transactions.
* Each buyer pays the same per-unit price regardless of fill order or fill size.
* Pricing remains mathematically consistent across all cumulative fills — there is no slippage introduced by the size of any individual fill.
* The remaining unfilled quantity continues to sit in escrow and stays available until the offer is cancelled or fully consumed.
This lets institutional buyers source large blocks across multiple counterparties at a single fixed price, and lets sellers reach a broader set of buyers without requiring any single party to commit to the full size.
## Public and Private Offers
Every offer in a block market is either **public** or **private** — a choice the offer creator makes at the time of creation.
### Public Offers
A public offer can be filled by any wallet. This is the standard configuration for institutional liquidity provision, where the seller wants maximum reach and is indifferent to who the counterparty is, as long as payment arrives at the agreed price.
### Private Offers
A private offer designates a specific wallet address as the only party permitted to fill it. The offer is still collateralized and enforced by the same smart contracts, but execution is restricted to that one counterparty.
Private offers are the right tool for:
A project sells a large token allocation to a specific strategic partner at a pre-negotiated price, with on-chain enforcement ensuring no one else can front-run or interfere.
Early-stage token distributions to specific investors are handled transparently on-chain, with provable collateralization and no manual coordination at settlement.
Bilateral agreements with named counterparties — where the identity of the buyer matters as much as the price — can be executed trustlessly without any intermediary.
Two parties who have already negotiated terms off-chain can codify the agreement as a private offer and let the protocol handle final settlement, removing last-minute counterparty risk.
## Market Formation
Anyone can create an offer on Canopy. There is no permissioned liquidity provider list, no market maker agreement to sign, and no minimum deposit threshold set by a central authority. As participants create offers for the same trading pair, liquidity naturally coalesces into a visible block market. The more offers exist for a given pair, the richer the book becomes.
Because every offer is independently collateralized, a new market entrant's offers are just as trustworthy as any existing participant's — the protocol treats all offers identically regardless of who created them.
No slippage means what you see is what you get. A fill at 0.425 USDC per TECH costs exactly 0.425 USDC per TECH — no matter the size of your fill, the depth of the book, or the sequence of other fills happening around yours.