What Is OTC Trade?

An over-the-counter (OTC) trade is a direct transaction between two parties, typically facilitated by an OTC desk, without using a public exchange. OTC trades are preferred by whales and institutions because they avoid slippage and market impact from large orders. While OTC deals themselves happen off-chain, the settlement (moving tokens between wallets) is visible on-chain. Sonar Tracker identifies potential OTC settlements by flagging large direct transfers between institutional wallets that bypass exchange order books.