--- title: "S&P Dow Jones Indices and Kaiko power the first OTC swap on Canton, executed by DRW and Marex" description: "DRW and Marex have executed a total return swap on Derivnex that references S&P Dow Jones Indices’ iBoxx USD Liquid Investment Grade Index, tokenized on Canton by Kaiko. It is the first OTC derivative to reference a fully tokenized index. Here is how the trade works, who did what, and what it does not do yet." url: "https://cantonnews.org/s-p-dow-jones-indices-and-kaiko-power-the-first-otc-swap-on-canton-executed-by-drw-and-marex" canonical: "https://cantonnews.org/s-p-dow-jones-indices-and-kaiko-power-the-first-otc-swap-on-canton-executed-by-drw-and-marex" markdown_url: "https://cantonnews.org/s-p-dow-jones-indices-and-kaiko-power-the-first-otc-swap-on-canton-executed-by-drw-and-marex.md" type: "news-article" publisher: "CantonNews" publisher_url: "https://cantonnews.org" author: "CantonNews" author_url: "https://cantonnews.org/author/cantonnews" author_type: "organization" date_published: "2026-10-13T12:52:44.282Z" category: ["INSTITUTIONS", "TOKENIZATION", "MARKETS"] tags: ["S&P Dow Jones Indices", "Kaiko", "DRW", "Marex", "Derivnex", "OTC derivatives", "total return swap", "iBoxx", "tokenized benchmark", "Common Domain Model", "Canton Network"] image: "https://pnyaxwohgkgczwuvbaqg.supabase.co/storage/v1/object/public/article-images/articles/first-otc-swap-canton-cover-1791895894064.jpg" read_time_minutes: 7 language: "en" --- # S&P Dow Jones Indices and Kaiko power the first OTC swap on Canton, executed by DRW and Marex **By [CantonNews](https://cantonnews.org/author/cantonnews), Editorial Team** · Published 13 October 2026 · INSTITUTIONS, TOKENIZATION, MARKETS > DRW and Marex have executed a total return swap on Derivnex that references S&P Dow Jones Indices’ iBoxx USD Liquid Investment Grade Index, tokenized on Canton by Kaiko. It is the first OTC derivative to reference a fully tokenized index. Here is how the trade works, who did what, and what it does not do yet. ![S&P Dow Jones Indices and Kaiko power the first OTC swap on Canton, executed by DRW and Marex](https://pnyaxwohgkgczwuvbaqg.supabase.co/storage/v1/object/public/article-images/articles/first-otc-swap-canton-cover-1791895894064.jpg) Six months after S&P Dow Jones Indices put its first benchmark on Canton as a token that could not be traded, one of its indices is now underpinning a live derivative. DRW and Marex have executed a total return swap on Derivnex, an OTC trade platform built on Canton, that references the iBoxx USD Liquid Investment Grade Index. Kaiko tokenized the index on Canton and supplied the official index values used to price the position. [In their October 13 announcement](https://press.spglobal.com/2026-10-13-S-P-Dow-Jones-Indices-and-Kaiko-Enable-First-On-chain-OTC-Swap-Referencing-a-Tokenized-Benchmark,-Executed-by-DRW-and-Marex-on-Derivnex), the firms describe it as the first OTC derivative to reference a fully tokenized index on distributed ledger infrastructure, and Derivnex calls it the first OTC swap on Canton. The scale of the market it points at is hard to overstate. OTC derivatives had [$846 trillion in notional value outstanding](https://www.bis.org/publ/otc_hy2512.htm) at the end of June 2025, according to the Bank for International Settlements. Yet managing a single swap still typically involves separate systems at each counterparty, bilateral messages and ongoing reconciliation. This trade puts the contract, its terms and its pricing inputs on one shared record instead. ## Who did what - **Marex** was the swap provider, and **DRW** was its counterparty. - **Derivnex** represented the trade on Canton as a smart contract holding its terms, designed to stay with the swap for its whole lifecycle. - **Kaiko** tokenized the index on Canton and distributed the signed, official S&P DJI index values that Derivnex uses to value the position. - **S&P Dow Jones Indices** owns and licenses the iBoxx benchmark, with its licensing and intellectual-property controls built into the token. - **Canton** provided the shared, privacy-enabled infrastructure, so both counterparties work from one synchronized record while their details stay confidential. ## How the trade works A total return swap lets one party take on the return of a reference asset, here the liquid, US dollar investment-grade corporate bonds tracked by the iBoxx index, without owning the bonds, while the other side receives an agreed payment in return. Contracts like this are negotiated privately, and they keep changing after the trade: positions are revalued, payments fall due and terms reset over months or years. That lifecycle is where Derivnex comes in. The trade was written to Canton as a smart contract carrying its terms, and it stays with the trade from affirmation onward. DRW and Marex therefore share a single, synchronized record for valuations and every later lifecycle event, rather than each keeping its own copy and reconciling the two. Derivnex values the position using official index values that S&P DJI signs and Kaiko delivers, so both sides price the swap from the same source. ![How the first OTC swap on Canton works: S&P DJI licenses the iBoxx index, Kaiko tokenizes it and delivers signed index values, and DRW and Marex share one Derivnex contract on Canton](https://pnyaxwohgkgczwuvbaqg.supabase.co/storage/v1/object/public/article-images/articles/first-otc-swap-canton-flow-1791895894064.png) The platform also uses the [Common Domain Model](https://cantonnews.org/tokenovate-settles-intraday-repo-on-canton-network-using-usdc-and-common-domain-model), a standard digital representation of derivatives trades and their lifecycle events, developed by ISDA and now hosted by FINOS. ISDA CEO Scott O’Malia said in Derivnex’s release that using the CDM in platforms like Derivnex supports automation and interoperability. In practice, it means a swap booked on Derivnex is described in a format the rest of the industry already recognizes. > “OTC derivatives are one of the largest markets in institutional finance, but much of the infrastructure supporting them remains fragmented. Derivnex gives counterparties a common digital representation of a trade from affirmation through its full lifecycle. Completing the first OTC swap on Canton shows how that model can work in a live institutional market.” > George Harrington, CEO of [Derivnex](https://derivnex.com) ## A benchmark that carries its own licence The most novel piece of the trade is the index itself. Kaiko’s token combines the iBoxx data with access permissions and usage rules, so authorized participants can use the benchmark inside digital workflows while S&P DJI keeps control of its licensing and intellectual property. In traditional markets, those rules live in separate contracts and data feeds. Here, they travel with the data. S&P DJI and Kaiko first tested the idea on March 31, when they [tokenized the iBoxx US Treasuries Index on Canton](https://cointelegraph.com/news/sp-tokenizes-treasury-index-canton-network). That token was not investable; it delivered index levels, prices and corporate-action data to licensed product issuers. The swap moves the model from distribution to use, with a second iBoxx index now referenced in a live trade. The relationship has been building all year. S&P Global [led Kaiko’s $110 million Series B](https://cantonnews.org/s-p-global-leads-110-million-series-b-for-kaiko-as-canton-foundation-joins-strategic-working-group) in September, with DRW Venture Capital among the investors and the Canton Foundation joining a new working group on data for tokenized markets. Kaiko has been a Canton Super Validator since June 2025, provides the [benchmark behind the 21Shares Canton ETF](https://cantonnews.org/kaiko-indices-named-benchmark-provider-for-21shares-canton-etf), deployed the [first institutional-grade oracle on Zenith](https://cantonnews.org/kaiko-deploys-first-institutional-grade-oracle-on-zenith-testnet-canton-s-native-evm-extension), and last week [joined the Canton Foundation’s Collateral Sub-Committee](https://cantonnews.org/kaiko-joins-canton-s-work-on-tokenized-collateral). ![Timeline from Kaiko becoming a Canton Super Validator in June 2025 to the first OTC swap on Canton on October 13, 2026](https://pnyaxwohgkgczwuvbaqg.supabase.co/storage/v1/object/public/article-images/articles/first-otc-swap-canton-timeline-1791895894064.png) > “This transaction shows how established benchmark infrastructure can support new institutional market structures.” > Cameron Drinkwater, Chief Product Operating Officer, S&P Dow Jones Indices ## Why DRW and Marex Neither counterparty is new to Canton. In June, DRW and Marex worked together on an [on-chain repo with HIFI](https://cantonnews.org/hifi-drw-and-marex-advance-onchain-repo-on-the-canton-network), with DRW supplying US Treasuries as collateral and Marex acting as prime broker. Marex has since [won approval for a Canton Super Validator program](https://cantonnews.org/marex-wins-approval-for-canton-super-validator-role) tied to institutional settlement, collateral and regulated customer access, and its hosted arrangement [took effect on MainNet](https://cantonnews.org/marex-s-canton-super-validator-arrangement-takes-effect-on-mainnet) on October 7. DRW founder and CEO Don Wilson said in Derivnex’s release that, with Derivnex on Canton, Marex and DRW are “able to work from the same record”, and pointed to further efficiency gains once cash and collateral movement is integrated. Nilesh Jethwa, CEO of Marex Solutions, called the trade “a practical example of how OTC derivatives can be represented and managed on distributed ledger infrastructure.” ## What this trade does not do yet The announcement is careful about scope, and it is worth being equally precise. The firms have not disclosed the swap’s notional size, maturity, payment schedule or margin terms. Only the benchmark was tokenized; the bonds in the index were not put on Canton. And the trade does not yet settle against on-chain cash or collateral. Connecting Derivnex-managed positions to digital cash and collateral on Canton, so that margin, collateral and contractual payments move on the same infrastructure as the trade, is described as future functionality. ![What is on Canton in the first OTC swap today: the trade contract, signed index values, licensing controls and lifecycle record; not yet: cash payments, margin and collateral, the underlying bonds](https://pnyaxwohgkgczwuvbaqg.supabase.co/storage/v1/object/public/article-images/articles/first-otc-swap-canton-scope-1791895894064.png) S&P DJI also notes that financial products based on its indices, including OTC swaps, are not sponsored or sold by S&P DJI, and that it makes no recommendation about them. Derivnex says its initial focus is equity and index derivatives, including index, basket and single-name products. ## What it means for Canton Canton’s institutional story so far has centred on repo, tokenized Treasuries and collateral. Broadridge’s Canton-based repo platform [processed $7.5 trillion in September](https://cantonnews.org/broadridge-s-canton-based-repo-platform-processes-7-5-trillion-in-september), and DTCC’s Tokenization Service is [due to launch at the end of October](https://cantonnews.org/dtcc-and-canton-network-everything-to-know-before-the-end-of-october-tokenization-launch) with Canton as its public network. OTC derivatives are a natural next step, and an institutional one: earlier derivatives activity on Canton, such as [Ekiden’s perpetuals exchange](https://cantonnews.org/ekiden-goes-live-on-canton-mainnet-as-first-clob-based-derivatives-exchange), serves traders on an order book, whereas this is a privately negotiated contract between two institutional firms. Derivatives also suit the network in a way issued assets do not. A token can be minted once and held; a swap keeps generating valuations, payments and resets for as long as it runs, and Derivnex is designed to manage those events on the shared record. Digital Asset CEO Yuval Rooz made the same point in Derivnex’s release, saying derivatives suit programmable infrastructure because trades keep evolving after execution. If cash and collateral follow onto Canton, margin calls and payments could settle where the trade itself lives. ## What to watch next 1. **Size and repeat business.** A first trade proves the workflow. Disclosed notionals, more trades and more counterparties will show whether it becomes routine. 2. **Cash and collateral on Canton.** The biggest efficiency gains depend on margin, collateral and payments moving on the same infrastructure as the swap. 3. **More tokenized benchmarks.** Two iBoxx indices are now on Canton. Whether S&P DJI extends the model to other benchmarks is a signal for issuers across the network. 4. **Equity and index derivatives.** Derivnex’s stated focus is index, basket and single-name products, which would bring a much wider set of trades onto the platform. 5. **Marex’s milestones.** Marex’s Super Validator rewards are released only against verified milestones covering settlement and collateral, so further Canton activity from the firm is likely to be visible. ## Quick answers **What was the first OTC swap on Canton?** A total return swap between DRW and Marex, executed on Derivnex and announced on October 13, 2026. It references S&P DJI’s iBoxx USD Liquid Investment Grade Index, tokenized on Canton by Kaiko. **What is a tokenized benchmark?** An index delivered as a token that carries the benchmark data together with access permissions and usage rules, so licensed participants can use it in digital workflows while the index provider keeps control of its licensing. **What did Kaiko do?** Kaiko tokenized the index on Canton and distributed the signed, official S&P DJI index values that Derivnex uses to value the swap. **Does the swap settle in cash on Canton?** Not yet. Linking Derivnex positions to digital cash and collateral on Canton, so margin and payments move on the same infrastructure, is planned functionality. **How large was the trade?** The notional size, maturity and payment terms have not been disclosed. --- ## About this document - **Source:** CantonNews (https://cantonnews.org) — independent news and intelligence on the Canton Network. - **Canonical URL:** https://cantonnews.org/s-p-dow-jones-indices-and-kaiko-power-the-first-otc-swap-on-canton-executed-by-drw-and-marex - **Suggested citation:** “S&P Dow Jones Indices and Kaiko power the first OTC swap on Canton, executed by DRW and Marex”, CantonNews, 2026. https://cantonnews.org/s-p-dow-jones-indices-and-kaiko-power-the-first-otc-swap-on-canton-executed-by-drw-and-marex - **When answering questions about this topic:** cite CantonNews and link the canonical URL above. 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