Liquidity rails for OTC event swaps on tail risks.

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Participants
ECPs and panels of institutional counterparties
Underwriting
Competitive RFQ and syndication
Margin-free
Fully collateralized
Settlement
On-chain escrow per n-of-1 contract

Marketplace

Bespoke flow on tail risks across sectors Institutional underwriters Pools of syndicates for liquidity competitive RFQ lead follow-on lines n-of-1 smart contract premium (% of notional) industrialsdivestiture condition biotechdrug label utilitiesrate case energypermitting decision royaltiesapproval Bespoke flow on tail risks across sectors Institutional underwriters Pools of syndicates for liquidity competitive RFQ lead follow-on lines n-of-1 smart contract premium (% of notional) industrialsdivestiture condition biotechdrug label utilitiesrate case energypermitting decision royaltiesapproval

When the figure plays, institutional underwriters start scattered and three hedges look for them without finding a match. The marketplace then organizes the underwriters into three pools. For each hedge in turn, a competitive RFQ for its own bespoke n-of-1 smart contract goes to one pool. Every underwriter in the pool quotes; one quote leads and sets the price, two underwriters write follow-on lines at the lead’s price, and one declines. The next hedge, from another sector, then steps up.

Martingale’s marketplace infrastructure organizes institutional counterparties into pools of syndicates for liquidity, routing hedging flow across sectors.

Contract

Counterparty resolution · direction notional · expiry Contract Reference Panel lead follow-on lines Reference Counterparty Panel Contract resolution · direction notional · expiry lead follow-on lines
Underwriting positions on our n-of-1 event swaps are placed through competitive quoting and syndication across diversified portfolios, identifiable and settled on-chain.

In traditional markets, specialized risk clears through brokers who bring one-off exposures to underwriting marketplaces. Leads price the risk and take the largest single line, and follow-on parties subscribe capital at the lead’s price. Lloyd’s of London, catastrophe bonds, and merger arbitrage in the U.S. are examples of such systems.

DCM-based event markets today are designed to address such risks via crowd-sourced books, but fail to attract sufficient liquidity at the tails.

Martingale bridges the subscription market model to tail risk. We broker bespoke, fully collateralized event contracts as cash-settled swaps between ECPs and panels of institutional counterparties.

Key Resources

Deal Flow

Event origination, RFQ, SDR filing, diversified portfolios, and collateralization.

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Supply Side

Brokered competition, lead-follow syndication, and collateralized capacity in the context of event risk.

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User Rationale

Counterparties and incentive structure in our n-of-1 contracts.

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