# Clearing is a Secret Sauce

Crypto Derivatives missing entire category of infrastructure. Its volume should be 5-10x larger than they are today. The scale of clearing is difficult to comprehend.

### **Clearing is what happens between a trade and its settlement.**

It the amount of money and assets move to the right parties, at the right time — without counterparty risk.

| In TradiFi                                                                                                                                                          | In DeFi                                                                                                                                                                              |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| **clearinghouses** do this process. They calculate margin, net risk across positions, and handle collateral, settlement, and liquidation — so trades don’t default. | It’s invisible, but critical. It's largely missing. Without clearing, DeFi trading is overcollateralized, fragmented, and inefficient. With it, we unlock the next $35T opportunity. |

**Pascal is the first on-chain clearing protocol** designed to bring that same infrastructure — margining, risk offset, and settlement — fully on-chain, composable, and trustless.

Want to understand clearing at its foundation? [Read the Investopedia Guide](https://www.investopedia.com/terms/c/clearing.asp)