# Off Exchange Settlement

### Secured Asset Custody

Unitas employs **Off-Exchange Settlement (OES)** providers to safeguard collateral while accessing centralized exchange liquidity for hedging strategies.

Currently, Unitas works with two leading institutional custodians: [**Ceffu**](https://www.ceffu.com/) and [**Copper**](https://copper.co/).

* Both are independent, non-US based custodians focused exclusively on digital asset custody and settlement.
* Protocol assets are **never beneficially owned** or controlled by the OES providers; they remain fully attributable to Unitas users at all times.
* Assets are held in segregated accounts and only deployed via pre-approved trading instructions to support Unitas’ delta-neutral strategies.

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### Risk Management

Unitas recognizes two primary risks when operating with OES providers:

#### 1. Accessibility and Availability

* Unitas depends on OES providers for timely **deposit, withdrawal, and delegation** of collateral to/from exchanges.
* Any degradation in this process may temporarily slow hedging or settlement workflows.
* Importantly, such issues **do not affect the collateral backing of USDu**, only the speed of mint/redeem operations.
* Unitas actively monitors OES availability and maintains redundant connectivity across both Ceffu and Copper to minimize impact.

#### 2. Settlement Performance in Exchange Failure

* In case of an exchange default, Unitas relies on OES providers to facilitate the transfer of collateral and settle PnL without delay.
* Leading custodians like Ceffu and Copper require exchanges to pre-post collateral with them, enabling efficient resolution under their rolling settlement cycles (typically 4–8 hours).
* By maintaining hedges across multiple exchanges, Unitas reduces dependency on any single venue.

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### Additional Benefits

* **Liquidity Access**: OES providers allow Unitas to connect seamlessly with multiple CEX venues, ensuring deep orderbook liquidity without moving assets directly onto exchanges.
* **Operational Efficiency**: With OES, mint/redeem flows for USDu and sUSDu are **on-demand and cost-efficient**, avoiding unnecessary blockchain transactions or gas costs.
* **Counterparty Diversification**: Through custodians, Unitas can expand hedging access beyond centralized exchanges to OTC and institutional counterparties when needed, further mitigating risk.

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### Why It Matters

OES is the backbone of Unitas’s yield-bearing stablecoin design:

* **USDu** stays fully collateralized off-exchange, ensuring user funds remain secure and transparent.
* **sUSDu** holders capture the yield generated by a basket of delta-neutral strategies (funding rate arbitrage + exchange fee flows), while custody and settlement risks are minimized through trusted partners.