Overview
The Fireblocks Off Exchange solution allows you to efficiently and securely trade cryptocurrencies on a centralized exchange while keeping your funds safe within your Fireblocks vault. This solution enables you to trade on supported exchanges, without prefunding, by moving funds into the connected Fireblocks Collateral Vault Account (CVA), where they are stored securely. Off-Exchange helps you manage counterparty risk when trading on centralized venues.
Key benefits
The Fireblocks Off Exchange capability provides you with several advantages, especially given recent exchange vulnerabilities.
Manage all counterparty risk
You remain in full custody of your funds while trading. Funds stored in the Collateral Vault Account (CVA) are retrievable in exchange-default scenarios. Fireblocks provides the underlying technology, exempting you from taking any counterparty risk with us.
Only CVA funds are retrievable
Only funds in the Collateral Vault Account (CVA) are retrievable. Any unsettled profits on the exchange are not secured.
Withdraw and settle on demand
You may withdraw funds from your CVA at any time. Similarly, where supported by the exchange, you can also initiate settlements at any time via the Fireblocks Console or by way of predefined logic and thresholds via the Fireblocks API. Settlements do not impact your available balance or open positions on the exchange.
Use Off Exchange & On-Exchange functionalities
You may continue to use on-chain deposits and withdrawals alongside Fireblocks Off Exchange for supported exchanges. You do not have to create a new account or reconfigure existing accounts to use the solution.
Exchanges can restrict funds and limit support
Exchanges may choose to restrict which funds can be withdrawn directly from the exchange and which can be settled via Fireblocks Off Exchange. Some exchanges may also choose not to support both On-Exchange and Off-Exchange functionality simultaneously.
How Off Exchange works
Fireblocks Off Exchange introduces Collateral Vault Accounts (CVAs). CVAs are Fireblocks Vault accounts that programmatically lock and mirror funds to the connected exchange account. CVAs are created in a separate collateral workspace from your main workspace, and each Off Exchange connection requires a separate collateral workspace. This isolates the backup recovery kits for CVAs from your main workspace, preventing the collateral locking mechanism from becoming vulnerable.
CVAs act as a middle ground between you and the exchange. Any funds deposited into the CVA are automatically locked, so that the exchange has the confidence to provide you with an available balance for trading. The available balance is defined as all assets available for trading on the exchange.
There is recourse in place to cover situations where you or the exchange is in default of the terms or SLAs. There is also recourse in a situation where Fireblocks' operations are unexpectedly impacted, and the Off-Exchange feature becomes suspended or inaccessible.
A dedicated collateral workspace segregates the CVA from your main workspace vault accounts. This workspace enables you to manage users with access to the collateral vaults. CVA balances, adding, and removing collateral are not shown in the collateral workspace. These details are recorded in the main workspace with the connected exchange account balance.
You can access your Collateral workspace by selecting Account > Switch workspace and switching to the collateral workspace. However, you cannot view or perform operations from your CVA within the collateral workspace, which is reserved for administrative purposes only. The collateral workspaces naming convention is: “Collaterals +<main-workspace-name>.”