Transaction marks the first OTC swap on Canton Network and the first on-chain derivatives trade tied to S&P Dow Jones Indices’ iBoxx USD Liquid Investment Grade Index, with the tokenization of IP provided by Kaiko
Derivnex and Canton announced the completion of the first OTC swap transaction on Canton, marking the launch of Derivnex’s platform for bringing institutional derivatives lifecycle management on-chain.
The transaction is a total return swap between DRW, acting as counterparty, and Marex as the swap provider, referencing the iBoxx USD Liquid Investment Grade Index, which Kaiko has tokenized on Canton. OTC swaps are privately negotiated contracts that allow counterparties to gain or manage exposure to an asset or index without owning it directly. While these markets are central to institutional finance, managing a swap over its life typically requires multiple systems, bilateral communications and ongoing reconciliation between counterparties.
Through Derivnex, the trade was represented on Canton as a smart contract containing the transaction terms and designed to remain with the trade throughout its lifecycle. This gives DRW and Marex a shared, synchronized record for managing valuations and other lifecycle events.
Derivnex incorporates the Common Domain Model (CDM), providing a standardized digital representation of derivatives transactions and processes. For this transaction, Kaiko tokenized the S&P iBoxx USD Liquid Investment Grade Index and distributed the S&P DJI official index values used by Derivnex for ongoing valuation of the position, making this the first OTC derivative to reference a fully tokenized index on distributed ledger infrastructure. S&P DJI provides the underlying benchmark data, demonstrating how established benchmark infrastructure can be integrated into new digital derivatives workflows.
“OTC derivatives are one of the largest markets in institutional finance, but much of the infrastructure supporting them remains fragmented,” said George Harrington, CEO of Derivnex. “Derivnex gives counterparties a common digital representation of a trade from affirmation through its full lifecycle. Completing the first OTC swap on Canton shows how that model can work in a live institutional market.”
Canton provides the shared infrastructure for Derivnex, enabling counterparties to coordinate transaction workflows while maintaining the confidentiality required for bilateral markets.
Derivnex initially plans to focus on equity and index derivatives, including index, basket and single-name products. Future functionality is expected to connect Derivnex-managed positions with digital cash and collateral on Canton, enabling margin, collateral and contractual payments to move within the same infrastructure as the underlying transaction.
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Don Wilson, Founder and CEO of DRW, said:
“Uncleared OTC derivatives are a large and growing market with cumbersome back office workflows. With Derivnex on Canton, Marex and DRW are able to work from the same record, thereby streamlining processes. I’m excited by the efficiency this could bring across more trades and counterparties, particularly when cash and collateral movement become integrated.”
Nilesh Jethwa, CEO, Marex Solutions, said:
“In line with Marex’ focus on bridging the traditional finance and digital asset worlds, this transaction provides a practical example of how OTC derivatives can be represented and managed on-chain while maintaining the controls required by institutional market participants.”
Cameron Drinkwater, CPOO at S&P DJI, said:
“This transaction shows how established benchmark infrastructure can support new institutional market structures. Pairing a flagship index with controlled digital distribution extends our credit franchise into on-chain finance, building on more than two decades of liquidity, transparency and tradability on iBoxx benchmarks while preserving trusted rigor and governance.”
Yuval Rooz, CEO and Co-Founder of Digital Asset, said:
“Derivatives are a natural fit for programmable financial infrastructure because the transaction continues to evolve long after the initial trade. Derivnex is demonstrating how counterparties can manage that full lifecycle on shared infrastructure while preserving the controls institutional markets require.”
Ambre Soubiran, CEO of Kaiko, said:
“Reliable benchmark and pricing data are essential to managing derivatives positions. This transaction demonstrates how tokenized benchmark infrastructure and trusted pricing data can work together to support new institutional markets and products, while preserving the licensing, governance and operational standards required by financial institutions.”
Scott O’Malia, CEO of ISDA, said:
“The Common Domain Model provides a consistent digital representation of financial transactions and lifecycle events. Its use in platforms such as Derivnex demonstrates how industry standards can support greater automation and interoperability in derivatives markets at scale.”
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