Zerocap Scales Derivatives Trading Operation with Fireblocks Custody Solution

Regulated Australian market maker and liquidity provider Zerocap has significantly scaled its derivatives trading operation by migrating collateral to Fireblocks' Off Exchange custody solution. The move allowed Zerocap to grow its Deribit trading book from a value in the millions to tens of millions.

The tension between trading on an exchange and keeping assets secure is a long-standing paradox in crypto derivatives trading. To trade, you typically need to park your collateral on the exchange, trusting someone else with your assets while trying to hedge risk. Fireblocks' Off Exchange product resolves this issue by allowing assets to stay within its custody perimeter while still being recognized as valid margin on Deribit.

The solution uses on-chain MPC (multi-party computation) wallets to hold trading collateral and programmatic mirroring, which keeps the exchange informed of the collateral's existence without transferring control. This eliminates the need for pre-funding exchange accounts, a major operational headache for institutional crypto traders.

Zerocap's adoption of Off Exchange didn't happen in isolation. The firm has been using Fireblocks infrastructure since 2020 and joined the Fireblocks Global Custodian Partner Program in 2024. This partnership allowed Zerocap to deepen its relationship with Fireblocks, ultimately leading to the consolidation of its operations on Deribit.

Fireblocks estimates that its Off Exchange solution reduces time spent on manual rebalancing and treasury operations by roughly 50%. This scalability is a significant advantage for market makers like Zerocap, enabling them to deploy more collateral without increasing counterparty risk. The ability to scale from millions to tens of millions in collateral means more capacity to provide liquidity, tighter spreads, and larger order sizes.