The Problem with Traditional OTC
Large trades have always lived in the shadows of public markets. Right now, institutional desks, token issuers, and treasury managers negotiate block trades over Telegram, Discord, Signal, or email. That means:- Settlement depends on trust. If your counterparty defaults after the deal is struck, your only recourse is legal — slow, expensive, and often cross-jurisdictional.
- Capital is locked up with no return. Funds committed to a pending deal sit idle rather than working elsewhere.
- Positions are non-transferable. Once you enter a traditional bilateral OTC agreement, you’re usually stuck until settlement. You can’t sell the position, pledge it as collateral, or build anything on top of it.
- There is no transparency. Pricing, terms, and fill status are invisible to anyone outside the deal.
How Canopy Solves It
Canopy replaces relationship-based trust with cryptographic enforcement. You negotiate once; the protocol enforces the rest.Seller escrows collateral
Before an offer appears on any market, the seller’s assets are locked in the venue’s escrow. The offer is only visible once the collateral is confirmed. There is nothing to trust — the asset either exists in escrow or the offer does not exist.
Buyer fills at the negotiated price
A buyer — either any wallet for a public offer, or a designated wallet for a private offer — submits a fill. The protocol verifies quantities, prices, and balances atomically.
Key Properties
No Counterparty Credit Risk
Every offer is backed by escrowed collateral before it is visible. A seller cannot default because the assets are already locked. Claims cannot exceed their backing — ever.
No Market Makers or AMMs
Canopy does not route orders through liquidity pools or rely on market makers to provide quotes. Prices are set by the counterparties themselves, and large trades execute exactly at the negotiated price with no slippage.
No Clearing House
Settlement is handled entirely by smart contracts. No administrator, broker, or clearing institution needs to approve, intermediate, or process the trade.
No Custody of Quote Tokens
The protocol escrows only the assets being sold. Quote tokens — USDC, stablecoins, or any other payment asset — move directly between counterparties at execution and are never held by the venue.
Who Canopy Is For
Canopy is designed for participants who move size and need certainty:- Traders executing large spot blocks without exposing themselves to AMM slippage or partial-fill risk across fragmented venues.
- Token issuers and projects selling treasury allocations or locked tokens without disrupting public market price discovery.
- Treasury managers sourcing or deploying significant capital in a single, transparent, enforceable transaction.
- Institutional desks that require deterministic execution and documented on-chain settlement rather than informal chat-based agreements.
- Integrators and developers who want to build new products — lending markets, analytics, structured products — on top of standard ERC-20 claim tokens that represent forward positions.
Explore Further
Block Markets
Understand how Canopy organizes liquidity into fully collateralized block markets, how partial fills work, and the difference between public and private offers.
Spot vs. Forwards
Compare immediate spot settlement with deferred tokenized forwards, and learn how ERC-20 claim tokens unlock liquidity for positions that were once frozen until the unlock time.