CompressRail

Confidential multilateral portfolio compression for OTC derivatives, built on the Canton Network.

CompressRail lets a group of derivatives counterparties tear up offsetting bilateral trades and atomically redistribute counterparty exposure — without any party, including the operator that runs the cycle, ever seeing another participant's positions.

Status: early development. Runs on Canton DevNet. Not audited. Not for production use.

The one claim

The operator computed and committed a multilateral compression cycle without ever seeing a single position.

That sentence is the entire product. Everything else in this documentation exists to make it precise, falsifiable, and bounded.

The problem

Multilateral portfolio compression reduces the gross notional and the trapped initial margin sitting in offsetting OTC derivatives trades. Industry estimates put regulatory initial margin across non-cleared and cleared derivatives in the hundreds of billions of dollars, and the funding cost of carrying it runs into the billions per year.

The mechanism that delivers compression carries a structural cost of its own. To find the offsetting cycle, every participant has to share its portfolio sensitivities with a central operator that computes the result — and that operator therefore sees every participant's book. The largest dealers tolerate this; much of the mid-tier sell-side and most of the buy-side do not, and stay out. A large share of compressible exposure is left stranded as a result.

This is a privacy problem, not a technology problem.

What CompressRail does

CompressRail moves the trust boundary from the operator to the protocol. The operator coordinates a compression cycle but is architecturally unable to see any participant's economic terms. Each participant verifies, on its own node, that its post-cycle risk stays within its declared tolerance, and authorizes only its own legs. The whole multilateral rebalance commits atomically — every leg or none. A participant can grant its home regulator a read-only view scoped to that participant's contracts alone.

Read Privacy model and boundary for the precise claim, then Architecture for how it is built, Run guide to run it yourself, and Demo guide to see it live.