Xena Exchange is one of the first exchanges that has integrated ClearLoop into its infrastructure. ClearLoop allows clients to keep their collateral within the certified off-exchange custody (Copper) and have zero credit risk on the exchange.


TABLE OF CONTENTS


What is ClearLoop?

ClearLoop is a technology offered by a London-based Copper that enables off-exchange settlement. As opposed to the usual flow on the cryptocurrency market, when a client or fund manager has to send funds to an exchange and take the credit risk on that exchange, client’s funds never leave the safe infrastructure of the custody:

Benefits

  • Zero credit risk on the exchange

  • Instant off-chain transactions within the Copper infrastructure

  • Unprecedented security of funds stored in Copper

Trading flow

After setting up the accounts on Copper and Xena Exchange:

  • Delegate funds using Copper UI or API to one of your Xena Exchange accounts

  • The funds become immediately available on your Xena Exchange account

  • Execute trades on Xena Exchange using its web terminal or API

  • Once an hour your PnL is settled to your Copper account

Delegation of funds

  • The delegated funds are locked on your Copper account, but will not leave it until the hourly clearing session

  • The delegated funds are treated as the balance of your Xena Exchange account. That means that you can use them as margin for orders and positions

  • You can unlock the funds at any moment

  • Please note that you can unlock only “free” part of the funds (i.e. the balance of your exchange account minus total initial margin of your orders and positions)

  • Please make sure your margin level will stay sufficient after unlocking to avoid liquidation of your positions

Trading example



Your Copper account

Your account on Xena Exchange


Balance: 100 BTC


Delegate 30 BTC to start trading

Balance: 100 BTC

Locked: 30 BTC

Available (for withdrawals or delegation): 70 BTC

Balance: 30 BTC

Available (for new trades or unlocking): 30 BTC

Open a position with initial margin 10 BTC

Balance: 100 BTC

Locked: 30 BTC

Available: 70 BTC

Balance: 30 BTC

Available: 20 BTC

Delegate additional 5 BTC

Balance: 100 BTC

Locked: 35 BTC

Available: 65 BTC

Balance: 35 BTC

Available: 25 BTC

Hourly clearing on Xena Exchange, your PnL is 3 BTC

Balance: 100 BTC

Locked: 35 BTC

Available: 65 BTC

Balance: 38 BTC

Available: 28 BTC

Clearing session between Copper and Xena Exchange (immediately follows the clearing on Xena Exchange)

Balance: 103 BTC

Locked: 38 BTC

Available: 65 BTC

Balance: 38 BTC

Available: 28 BTC

Setting up


Please note that for now it’s not possible to deposit or withdraw funds using the standard blockchain transactions to/from the accounts connected to Copper.