The ability to trade bilateral options tied to cryptocurrencies with Galaxy removes credit risk, which is normally associated with traditional OTC options trades, Galaxy said in a statement. This is because users send their collateral to a smart contract rather than to a counterparty, making the user less exposed to the counterparty and what they might be doing with one’s collateral.
Source: https://www.coindesk.com/markets/2023/05/18/galaxy-executed-its-first-otc-options-trade-as-demand-for-on-chain-options-ramps-up/?utm_medium=referral&utm_source=rss&utm_campaign=headlines