# Derivative Settlement Architecture ⎊ Area ⎊ Resource 3

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## What is the Architecture of Derivative Settlement Architecture?

The design choice between on-chain, off-chain, or hybrid mechanisms fundamentally dictates the finality and risk profile of derivative contracts. A robust design minimizes reliance on centralized intermediaries for the final settlement step. This structure must support the specific requirements of the derivative product.

## What is the Finality of Derivative Settlement Architecture?

The architecture must ensure that once a derivative trade is marked for settlement, the process is irreversible and computationally guaranteed. Delays or uncertainty in finality introduce duration risk that must be priced into the instrument.

## What is the Procedure of Derivative Settlement Architecture?

Clear, deterministic procedures for handling collateral calls, liquidations, and dispute resolution are embedded within the settlement architecture. These procedures must execute reliably under stress to maintain market integrity.


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## [Private Settlement Engines](https://term.greeks.live/term/private-settlement-engines/)

## [Cryptographic Settlement Finality](https://term.greeks.live/term/cryptographic-settlement-finality/)

## [Settlement Latency Considerations](https://term.greeks.live/term/settlement-latency-considerations/)

## [State Delta Transmission](https://term.greeks.live/term/state-delta-transmission/)

## [Blockchain Based Settlement](https://term.greeks.live/term/blockchain-based-settlement/)

---

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**Original URL:** https://term.greeks.live/area/derivative-settlement-architecture/resource/3/