Introduction

Tradelink is an open protocol standard to monitor, manage, pledge, and settle collateral balances secured and powered by Ledger Enterprise technology and hardware (HSM).

Trading technologies such as Trading platforms (OEMSs), Smart Order Routers (SoRs), NetSettlement/Matching engines, and alike can quickly and easily integrate with Ledger Enterprise Tradelink and build a variety of new financial applications by connecting to the available API endpoints.

Tradelink enables the creation of off-exchange trading as a service by offering a quick and easy way to set up the governance and access rights to accounts across multiple parties (multi-party governance). The Tradelink account multi-party governance defines the set of rules enforced on each party to authorize monitoring of collateral levels, creation, and approvals of collateral pledging and settlement.

We define a “collateral account” on Tradelink (often referred to as Tradelink Account, marked with prefix “TL”, e.g. TL-XXX-XXX-XXX) as an account type which holds crypto assets for the purpose of pledging, and “collateral” as an amount a client (Buy side, e.g. Asset Manager) is willing to lock (pledge) with a collateral custodian (collateral agent, e.g. qualified Custodian) to have a credit line with a third party (liquidity provider e.g. Exchange) based on a predefined agreement among those parties.

We define “pledging” of assets on Tradelink as the locking of assets in a collateral account for the purpose of guaranteeing lock state to a liquidity provider (LP, e.g. Exchange) which is willing to provide a trading service to a client based on that guarantee.

Trading will occur on the exchange/LP based on the terms agreed with the client and custodian.

We define “settlement” as a transaction request raised by a liquidity provider (settlement platform/exchange/market maker/broker) when a client has completed trading on their platform and they have a resulting balance due and/or to be received that will need to be transferred.

In the Tradelink account governance, we define three roles whose definition drives the implementation of the underlying collateral account rules:

Asset Manager: buy-side institution trading on LPs pledging assets on a Tradelink collateral account.
Custodian: custodian of the collateral account where assets will be pledged.
Exchange: sell-side/LP with whom the other parties have agreed to receive a trading line based on the guarantee of pledged assets on collateral accounts.