I perceive that this may occasionally differ between buying and selling venues, and should maybe rely on what particularly is being traded, however I wish to perceive, in apply, how the post-trade course of works in exchange-traded crypto.
For instance, on an equities trade (e.g. SETS), a participant (usually a dealer) could have an order matched towards one other participant’s order, and the trade will seize this legally-binding settlement to transact. A central-counterparty clearing agency (e.g. LCH) will novate the positions of each contributors (in addition to different contributors) and web off the multilateral positions at EOD. This removes the chance of counterparty default through the time period between commerce and settlement. Nonetheless it entails a number of corporations performing a sequence of operations which might take days to finish.
Crypto-currencies are distinguished by having a distributed ledger – so an OTC transaction can settle ‘robotically’ with out requiring this course of (assuming crypto-for-crypto commerce). Nonetheless I feel this might be extraordinarily onerous for the blockchain, and so the trade presumably has some type of netting layer, between the matching engine and the precise on-chain transaction. I can see a number of alternative ways for a way this would possibly work however have not been in a position to learn how it really does work.
Are you able to clarify the post-trade course of on e.g. Kraken / Coinbase / Binance, and the way these corporations be sure that two matched orders will settle on-chain?
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Do on-chain transactions really occur when matched on-exchange? Or simply e.g. when a person cashes out their trade account into an area pockets
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Does the method differ if one is exchanging one cryptocurrency for one more, versus fiat for crypto?
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How do they guarantee privateness if transactions are trackable within the blockchain? (As a scientific dealer, it might be fairly dangerous if different contributors knew your positions and which trades you had not too long ago made!)