Autonity Historical Series · E-03 · Clearing Design
AFP/DCC Venue-Agnostic Clearing: The Two-Key Model
The most important idea Autonity contributed: separating margin custody from trade intent. One key holds your capital. Another signs your orders. The clearing layer works regardless of which venue you traded on.
The computations outlive the chain. Every mechanic this explainer describes now runs somewhere in production under a different name. Autonity stood down in February 2026. Not financial advice.
CenterpieceHistorical · Feb 2026EducationalInteractive simulation
01 · The problem clearing solves
Why clearing is hard without a central intermediary
In traditional finance, a clearinghouse sits between every trade. When you buy a futures contract on CME, CME Clearing becomes your counterparty. It holds your margin, enforces the rules, and guarantees settlement. This works because there is one central entity everyone trusts.
On-chain derivatives remove the central intermediary — but that creates a problem. If Alice trades on Venue A and Bob trades on Venue B, who holds their margin? Who enforces liquidations? Who guarantees settlement when the oracle fires? Without an answer, every venue becomes its own silo: margin on Venue A cannot offset a position on Venue B.
Autonity's answer was the DCC (Decentralized Clearing Contract). It held margin at the protocol layer, independent of any specific venue. Venues matched trades; the DCC enforced the rules.
02 · The two-key model
Separating capital from intent
Margin Account Key
Controls capital — deposits and withdrawals to the DCC. Holds the collateral backing your positions. Does not authenticate orders to any venue.
Connects to DCC (protocol layer)
↔
Intent-Signing Key
Authenticates your orders to a specific venue. Tells AutEx (the AFP execution venue) that you want to open or close a position. Does not touch capital.
Connects to Venue (matching layer)
The key insight
Two keys may be the same key — but they need not be. This separation is why a position opened via one venue could be managed by any other: the DCC tracks the margin account, not the venue's key. A new venue joins the AFP ecosystem by registering with the DCC; existing positions are immediately manageable from that venue. No liquidity migration needed.
03 · The full lifecycle
From intent to settlement
1
Deposit margin. You send collateral (ATN or USDZ) to the DCC using your margin account key. The DCC records your available balance on-chain.
2
Sign an intent. You sign an order with your intent-signing key and submit it to AutEx (the AFP execution venue). AutEx matches it against the order book.
3
DCC validates margin. AutEx notifies the DCC of the match. The DCC checks that your margin account holds sufficient collateral (notional × IMR). If not, the order is rejected. If yes, the margin is locked.
4
Position is open. The DCC records a deterministic position identifier (derived from the execution hash of the open computation). The position chains to the margin health snapshot at open time.
5
Ongoing health checks. Before each settlement epoch, the DCC recomputes margin health for every open position using the oracle-aggregated mark price. Positions below MMR are queued for liquidation.
6
Settlement or close. At expiry (oracle settlement) or voluntary close, the DCC computes final PnL, returns remaining margin to the margin account, and marks the position closed. The full chain of hashes is preserved.
04 · Interactive demo
Simulate a position lifecycle
Run the two computations the DCC performed: opening a position (margin validation) and closing it (settlement). Fill in the open parameters, compute, then adjust the close price to see PnL.
🔒 All inputs are processed locally in your browser. No data is transmitted. Do not enter real personal data — use synthetic or anonymised inputs only.
Preset
Open Inputs
e.g. 0.10 = 10% of notional
Close Inputs
The oracle price at expiry or your voluntary close price
Stage 1: Open
DCC validates margin & creates position
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Stage 2: Close
DCC computes final PnL & returns margin
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Full Lifecycle Summary
05 · The computations outlive the chain
Where every Autonity mechanic lives today
Autonity stood down in February 2026. None of the mechanics it pioneered died with it. The DCC's venue-agnostic clearing model is now a first-principles design goal for multiple live systems.
FMX × LCH Cross-Margin
FMX (cleared by LCH) competes with CME by allowing US Treasury futures margins to offset against LCH's existing rates book. The same principle: one clearing layer, multiple execution venues.
Copper ClearLoop
Off-exchange settlement for crypto: margin stays in Copper's custody while positions are live across Bybit, Deribit, OKX, and others. Exactly the DCC's separation of custody from execution, applied to crypto prime.
Hyperliquid HIP-3
Hyperliquid's cross-venue margin proposal aims to let positions on external venues post margin against the Hyperliquid clearinghouse. The two-key structure is the natural interface.
US Treasury Clearing Mandate
DTCC/FICC now requires centralized clearing for US cash Treasuries (deadline: Dec 31 2026) and repo (June 30 2027). Multi-venue positions will clear through one CCP — the exact problem the DCC was designed to solve.
The conceptual bridge
Venue-agnostic clearing is not a niche idea. It is the direction the entire derivatives infrastructure is moving, in both crypto and TradFi. The AFP DCC was an early, working implementation that ran in production on the Autonity testnet. The mechanics it proved out now have names like ClearLoop, sponsored clearing, and principal-model netting.