Case Study: Definitive’s Post-Trade Reporting is Bridging Critical Gaps in Onchain Trading

In traditional finance (TradFi), post-trade reporting is indispensable for ensuring accountability and accuracy in trade execution, settlement, and compliance with regulatory requirements. However, within the decentralized finance (DeFi) landscape, robust and granular reporting is missing entirely, creating significant barriers to adoption by institutional asset managers.

Definitive’s trading platform addresses the reporting gap by providing comprehensive post-trade reporting, enabling asset managers to achieve accountability, transparency, and operational efficiency.

This case study explores how Definitive’s automated post-trade reporting capabilities empowered a leading crypto VC to better understand its trade performance and execution outcomes.

Post-Trade Reporting: Critical to Key Functions

Comprehensive trade reporting is ubiquitous in TradFi, providing essential data to streamline key functions.

Trade Reconciliation, Audits & Analysis:

The absence of post-trade reporting hampers asset managers’ ability to easily reconcile trades, establish accurate accounting, and conduct valuable analysis. Definitive empowers managers with:

• Full Trade Reconciliation: We provide detailed data for every order fill within each trade, freeing up valuable time piecing together information from DEXes and block explorers that can be channeled towards alpha generation.
• Data Granularity: Each order fill is hydrated with timestamp, execution price, venue, notional values, and network fee details. Say goodbye to parsing data from the blockchain.
• Independent Review: Definitive’s post-trade reporting is fully exportable, ensuring seamless integration with existing compliance frameworks. Furthermore, flexible account permissions facilitate read-only access for independent third-party review.
• Cost Basis and P&L: Cost Basis is the cornerstone of P&L reporting, essential for accountability to regulators, auditors, and most importantly, investors. Definitive provides key position-level metrics, and access can be granted to service providers for independent cross-reference.
• Backtesting & Trade Analysis: The granular data provided by Definitive can be used to analyze past trades for execution quality, frequently used venues, backtesting, and more. This gives asset managers the insights needed to optimize future trades.

Resource Optimization:

Even sophisticated hedge funds and trading desks often operate with lean teams, making resource optimization critical. At the same time, many onchain trading platforms lack even basic reporting features, which leads to:

• Resource Inefficiency: The high level of effort required in manual middle and back-office operations is expensive and diverts valuable resources from alpha generation in a 24/7 market.
• Manual & Time-Consuming Process: Without automated reporting, traders are forced to piece together information from block explorers like Etherscan.
• Error-Prone: The lack of automation leads to errors, making it challenging for asset managers to maintain accurate records for accounting and compliance.

Granular Precise Data for Post-Trade Analysis

Definitive’s Post Trade Reporting provides detailed information for every order, including:

• Execution Venue
• Volume Filled By Venue
• Notional Values
• Pre-Trade Compliance Status
• Total Trade Fills
• Timestamps
• Fill Prices
• Gas Fees

A leading crypto VC used Definitive’s platform to execute a large order for Instadapp (INST), a small-cap DeFi altcoin with thin liquidity across both centralized exchanges and onchain DEXs.

Definitive’s client conducted a post-mortem analysis of their INST/ETH execution to determine:

• Execution quality of a substantial trade order for INST/ETH
• Efficiency of the trade order execution
• Market impact from the trade

Key Insights Revealed by the Post-Trade Report

1. Execution Quality:

• Definitive’s advanced algorithmic TWAP execution delivered a +7.5% price improvement versus VWAP, demonstrating superior execution quality.
• This achievement in price improvement was made possible by Definitive’s Smart Order Routing technology which dynamically segments the order size for multiple trades and sources 100+ onchain venues for the best liquidity for every trade.

2. Trading Efficiency

• Total notional gas fees were only 0.30% of the total order size of $666.4K, extremely efficient for a long-running, multi-trade execution on Ethereum Mainnet.
• Placing a market order of similar size would have resulted in -28% less INST returned due to price impact. Definitive’s algorithmic TWAP order produced >10x more returns by minimizing price impact.

3. Market Impact Analysis

• The INST trades were executed over 2 weeks from July 1, 2024 to July 16, 2024.
• Definitive’s Smart Order Router optimizes for minimal price impact by greatly reducing order flow visibility. This is accomplished by breaking the order into hundreds of smaller trades. Considering the liquidity constraints of the INST/ETH market and limited trading volume, Definitive’s ability to deliver execution for such a large trade with a minimal price impact is impressive.
• During the period from July 1, 2024 to July 16, 2024, TradingView data shows DeFi tokens comparable to INST, such as AERO, experienced price increases of 37%. While INST was up 39% over the same period, this indicates the rise in INST’s price was likely driven by the general upward trend in the crypto market versus the trade order placed by Definitive’s client.

Achieve Superior Trade Execution with Robust Reporting on Definitive

Definitive’s post-trade reporting is essential for traders who are accountable to investors, fund administrators, and regulators. By providing detailed, exportable reporting, Definitive helps asset managers reconcile trades accurately, analyze trade performance, and maintain transparency in financial reporting.

Unlock superior trade execution and compliance with Definitive’s advanced onchain trading solution.

• Advanced order types, including TWAP and Limit Orders
• Leading Smart Order Routing technology
• Access to 100+ liquidity venues
• 7 EVM chains and Solana on one unified platform
• Order Flow Protection
• Asset Segregation
• Pre-Trade Compliance
• Post-Trade Reporting
• No setup or monthly fees
• Non-custodial with broad wallet support

Visit us at www.definitive.fi or reach out to sales@definitive.fi to learn more and schedule a demo.

Definitive is the leading institutional DeFi platform for advanced onchain trade execution and automated DeFi yield strategies.

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Disclosures:

This content is intended only for sophisticated investors; it is for informational purposes only and does not constitute the provision of investment advice. Client assumes full responsibility for its trading activity and should consult its advisors for its specific situation. Definitive is not registered as an investment advisor and Definitive assumes no liability, obligation, or responsibility for client decisions regarding the use of its trading platform and other products. Please see our Terms of Service for additional detail