Off-Exchange Settlement (OES) in Unitas
Unitas uses Off-Exchange Settlement to marry on-chain transparency with the deep liquidity of top centralized exchanges (CEXs). By routing collateral through custodians such as Copper and Ceffu, the protocol can hedge USDu with delta-neutral shorts while keeping user assets in segregated cold storage.
How OES Works
1 Collateral Mapping
On-chain collateral—USDC, USDT, SOL, ETH, WBTC, etc.—is deposited with Copper / Ceffu. The custodian credits a 1-for-1 balance inside its vault system; the coins remain offline.
2 Delta-Neutral Hedging
Using the mapped collateral, Unitas opens short perpetual futures on selected CEXs. The pair “long collateral + short perp” neutralises price risk and harvests funding-rate yield.
3 Settlement & Liquidity
Custodians batch-settle PnL and margin flows, while Unitas bots rebalance hedge sizes (≈ hourly) to keep net exposure near zero and ensure ample liquidity for USDu redemption.
Advantages
Access to Deep Liquidity – CEX order books support larger hedge sizes, letting USDu scale without DEX-slippage ceilings.
Lower Counterparty Risk – Assets stay in multilateral-MPC vaults; only signed instructions leave the custodian.
Capital Efficiency – Off-exchange margining reduces on-chain gas costs and idle collateral.
Regulatory Alignment – Copper, Ceffu and peers run under robust compliance regimes, easing institutional onboarding.
Transparency & Security
Monthly Transparency Report – A blog post and CSV break down OES balances, hedge sizes and insurance-fund totals.
Real-time Multisig Dashboards – Vault addresses are displayed in Docs; anyone can verify balances on Solana.
Independent Audits & Bug Bounty – All core contracts are audited and covered by a standing bounty.
Redundant Oracles & Risk Engine – Chainlink + Pyth feeds with fallback logic; bots auto-deleverage or top-up before risk thresholds.
Note: Unitas does not currently use NFTs or Merkle-root proofs for reserves; those may be added after the ZK attestation module is live.
Why It Matters
Off-Exchange Settlement lets USDu stay fully collateralised and liquid, while sUSDu holders capture JLP fee flow and positive funding rates—without parking billions in exchange hot wallets. By blending decentralized accounting with centralized liquidity, Unitas delivers a secure, scalable foundation for stable, yield-bearing dollars and global payments.
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