Key takeaways
- Two counterparties can agree on asset, size and discount and still never trade, because the binding constraint is usually the settlement procedure.
- Four constraints decide it: the tranche sequence, the settlement rails and banking corridor, the tranche size relative to the total, and each side's appetite for documentation.
- A listing recording only asset, size and price produces introductions that fail on the second call.
- Capturing the procedure at intake costs the lister five minutes and removes most wasted introductions on both sides.
The standard search is: who wants to buy 500 BTC. The useful search is: who wants to buy 500 BTC, in tranches of 25, settling in USDT on ERC20, seller-first, without an escrow agent, with funds in a jurisdiction our bank will accept.
The first question returns hundreds of names. The second returns a handful — and those are the only ones worth an introduction.
The four constraints that actually bind
- Sequence. Who moves first in each tranche, and what proof unlocks the move. This is the constraint most often left unstated and most often fatal.
- Rails. Settlement asset, network, and banking corridor. A buyer settling by wire into a jurisdiction the seller's bank will not receive from is not a buyer.
- Granularity. Tranche size relative to total. A seller who can only move in one block and a buyer who only settles in twenty tranches are incompatible regardless of price.
- Documentation appetite. Some desks require a full contract set; others refuse to sign anything beyond a term sheet. Neither will move to the other.
What this means for a listing
A listing that records only asset, size and price is close to worthless — it produces introductions that fail on the second call. Our intake form asks for the settlement sequence, the rails, the tranche schedule and the documentation position, because those are the fields the matching actually runs on.
It takes a subscriber five extra minutes to fill in. It removes most of the wasted introductions on both sides.
Questions this answers
- Why do most OTC introductions fail?
- Because they are matched on asset, size and price, and fail on procedure. One side settles seller-first, the other only buyer-first; one needs twenty tranches, the other can only move in one block; the buyer's corridor is one the seller's bank will not receive from. None of that surfaces until the second or third call.
Looking for the counterparty on the other side of this?
Our database matches on procedure, not just on asset and size.