# Choose a settlement type

Source: https://docs.settlemint.com/docs/user-guides/system-addons/xvp-settlement/choose-settlement-type
Choose between local XvP settlement and HTLC settlement before you configure flows, approvals, cancellation, or expiry recovery.




Choose the settlement type before you create a record or run approval tasks. The mode decides which flows DALP can execute, which coordination steps apply, and which recovery path operators should use if the cutoff date passes.

## Choose the mode [#choose-the-mode]

| Use this mode    | When it fits                                                                                | Continue with                                                                      |
| ---------------- | ------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------- |
| Local settlement | Every executable flow uses DALP-compatible token contracts on the same chain.               | [Local settlements](/docs/user-guides/system-addons/xvp-settlement/local/overview) |
| HTLC settlement  | DALP executes the local leg while an external process honours the same hashlock and timing. | [HTLC settlements](/docs/user-guides/system-addons/xvp-settlement/htlc/overview)   |

Use a local settlement when DALP owns every executable transfer in the exchange. Use an HTLC settlement when the local leg must coordinate with a referenced external leg.

## What the mode changes [#what-the-mode-changes]

| Decision           | Local settlement                                                   | HTLC settlement                                                                    |
| ------------------ | ------------------------------------------------------------------ | ---------------------------------------------------------------------------------- |
| Flow shape         | Local flows only                                                   | At least one local flow and one external-flow reference                            |
| Execution boundary | DALP completes the local flows together or the transaction reverts | DALP executes the local leg after the secret path proves the hashlock              |
| Operator checks    | Sender balances, approvals, cutoff date, and token compatibility   | Local-flow checks plus the external process, hashlock, secret handling, and timing |
| Recovery path      | Cancel before execution or recover after expiry                    | Cancel, recover after expiry, or reveal the secret before execution                |

If the settlement design includes off-chain pricing, settlement fees, ledger postings, or external completion evidence, separate those controls from the XvP record before creation. [XvP execution boundaries](/docs/user-guides/system-addons/xvp-settlement/execution-boundaries) explains which parts DALP executes and which parts remain operator-owned.

## Next steps [#next-steps]

<Cards>
  <Card title="Local settlements" href="/docs/user-guides/system-addons/xvp-settlement/local/overview">
    Configure a same-chain exchange where DALP executes every flow.
  </Card>

  <Card title="HTLC settlements" href="/docs/user-guides/system-addons/xvp-settlement/htlc/overview">
    Coordinate a local DALP leg with an external-flow reference through hashlock and secret reveal.
  </Card>

  <Card title="XvP execution boundaries" href="/docs/user-guides/system-addons/xvp-settlement/execution-boundaries">
    Separate local execution from external-flow, quote, fee, ledger, and evidence controls.
  </Card>

  <Card title="Cancel or recover a settlement" href="/docs/user-guides/system-addons/xvp-settlement/cancel-or-recover">
    Choose the stop or expiry path after the mode and current state are clear.
  </Card>
</Cards>