DRW & Marex execute an OTC swap on a tokenized S&P DJI benchmark on Derivnex.

S&P Dow Jones Indices, Kaiko and Derivnex announced the completion of the first OTC swap transaction on the Canton Network. The total return swap, executed on Derivnex between DRW and Marex, references S&P DJI’s iBoxx USD Liquid Investment Grade Index, which was tokenized on Canton by Kaiko. Derivnex’s CEO named the problem it addresses: OTC derivatives are among the largest institutional markets, yet “much of the infrastructure supporting them remains fragmented”.

Managing a privately negotiated swap over its lifecycle typically involves multiple systems, bilateral communications and ongoing reconciliation between counterparties. Here, the trade was represented on Canton as a smart contract carrying its terms for the life of the position, giving DRW and Marex a shared, synchronized record for valuations and other lifecycle events. Kaiko distributed the signed S&P DJI official index values that Derivnex uses to value the position, and the platform incorporates the Common Domain Model as a standardized digital representation of the trade.

What it does not reach is the tail. The reference is a liquid investment grade index valued throughout its lifecycle, and Derivnex initially plans to focus on equity and index derivatives, including index, basket and single-name products. Margin and collateral also sit outside the record: future functionality is expected to connect Derivnex-managed positions with digital cash and collateral on Canton. A scheduled binary has no daily mark to reconcile, and margin models on it converge to maximum loss, since any close-out window containing the event carries an adverse jump equal to the entire payout.

Martingale is building the rails for a marketplace of n-of-1 event swaps. Each contract’s full payout is posted at inception into an escrow on a public ledger, and at resolution redemption against the written outcome settles the positions with no custodian or central counterparty. The settlement rail does not determine the contract’s legal classification, which sits with counsel.

In our view, Derivnex has given index swaps a shared lifecycle record on Canton; a scheduled binary needs its full payout escrowed at inception.