S&P Completes First Onchain OTC Derivatives Swap Involving its Tokenized Index on Canton

The first onchain OTC derivatives swap has been executed on the Canton network involving the S&P’s tokenized index. Trading firms DRW and Marex notably executed the transaction, while crypto firm Kaiko tokenized the index on the Canton network.

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S&P Announces Completion of First Onchain OTC Swap

In a press release, the firm announced the completion of the first onchain OTC derivatives swap on Canton between DRW and Marex. The trading firms executed the total return swap on Derivnex, an institutional derivatives platform on Canton.

The transaction referenced S&P DJI’s iBoxx USD Liquid Investment Grade Index, which Kaiko tokenized on Canton. “The transaction represents the first OTC derivative to reference a fully tokenized index on distributed ledger infrastructure,” the release read.

The OTC swap enables the counterparties to gain exposure to the index without directly owning it. According to the release, the trading firms executed the trade as a smart contract on Canton through Derivnex, with the transaction containing the trade terms, which will remain in effect throughout the trade lifecycle.

“This gives DRW and Marex a shared, synchronized record for managing valuations and other swap lifecycle events,” the S&P DJI said. This move comes just as the Wall Street-backed Canton continues to expand its presence, recently signing agreements with South Korean companies Shinhan Financial Group and Hanwha Investment & Securities.

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How The Tokenized Index Works

The S&P DJI noted that the tokenized index combines the benchmark data with access permissions and usage rules. This lets market participants transact with the data while preserving the firm’s licensing and intellectual property controls.

For this transaction, Kaiko also distributed the signed S&P DJI official index values, which Derivnex will use to value the position throughout its lifecycle. “Together, the tokenized benchmark and pricing infrastructure allow the index to support a live OTC derivative transaction on distributed ledger infrastructure,” the release added.

Commenting on the transaction, Cameron Drinkwater, S&P DJI Chief Product Operating Officer, said, “This transaction shows how established benchmark infrastructure can support new institutional market structures.” He added that tokenizing and distributing their flagship index extends their credit franchise into onchain finance.

For more on tokenization, check out Best Platforms to Trade Tokenized Stocks