# Walkthrough

Source: https://docs.settlemint.com/docs/user-guides/system-addons/xvp-settlement/local/walkthrough
Follow a complete example of a local settlement where a Builder sells
property tokens to a Buyer, with a Notary receiving a fee.




This walkthrough demonstrates a complete local settlement from creation to execution. You'll see how assets flow between participants and what happens at each step.

## Scenario [#scenario]

**Real estate trade with notary fee**

* Builder holds 1,000 property tokens (PROP)
* Buyer wants to purchase them for 100,000 EURD (Euro Deposit)
* Notary facilitated the trade and receives a 500 EURD fee

All assets exist on the same blockchain, making this a local settlement.

### Starting balances [#starting-balances]

| Participant  | PROP  | EURD    |
| ------------ | ----- | ------- |
| Builder      | 1,000 | 0       |
| Buyer        | 0     | 100,500 |
| Notary       | 0     | 0       |
| XvP Contract | 0     | 0       |

### Settlement structure [#settlement-structure]

**Flows:**

1. Builder → Buyer: 1,000 PROP
2. Buyer → Builder: 100,000 EURD
3. Buyer → Notary: 500 EURD

**Configuration:**

* Cutoff date: 24 hours from creation
* Auto-execute: Enabled

![XVP local settlement setup](/docs/screenshots/xvp/xvp-setup-1.webp)

## Step-by-step walkthrough [#step-by-step-walkthrough]

<Steps>
  <Step>
    ### Notary creates the settlement [#notary-creates-the-settlement]

    The Notary opens the settlement wizard and configures three flows:

    * Flow 1: Builder sends 1,000 PROP to Buyer
    * Flow 2: Buyer sends 100,000 EURD to Builder
    * Flow 3: Buyer sends 500 EURD to Notary

    The Notary sets a 24-hour cutoff and enables auto-execute.

    **Balances after creation:**

    | Participant  | PROP  | EURD    |
    | ------------ | ----- | ------- |
    | Builder      | 1,000 | 0       |
    | Buyer        | 0     | 100,500 |
    | Notary       | 0     | 0       |
    | XvP Contract | 0     | 0       |

    No assets have moved yet. The settlement is in **Pending** state.
  </Step>

  <Step>
    ### Builder approves [#builder-approves]

    The Builder reviews the settlement and clicks **Approve**. Their 1,000 PROP are transferred to the XvP contract as escrow.

    **Balances after Builder approves:**

    | Participant  | PROP  | EURD    |
    | ------------ | ----- | ------- |
    | Builder      | 0     | 0       |
    | Buyer        | 0     | 100,500 |
    | Notary       | 0     | 0       |
    | XvP Contract | 1,000 | 0       |

    The settlement shows "1 of 2 approvals" and remains in **Pending** state.
  </Step>

  <Step>
    ### Buyer approves [#buyer-approves]

    The Buyer receives notification of the pending settlement. They review all flows, confirm the amounts are correct, and click **Approve**.

    Their 100,500 EURD (100,000 for the property + 500 notary fee) are transferred to the XvP contract. Since auto-execute is enabled and this is the final approval, the settlement immediately executes.

    **Balances after Buyer approves (and auto-execute triggers):**

    | Participant  | PROP  | EURD    |
    | ------------ | ----- | ------- |
    | Builder      | 0     | 100,000 |
    | Buyer        | 1,000 | 0       |
    | Notary       | 0     | 500     |
    | XvP Contract | 0     | 0       |

    The settlement is now in **Executed** state.
  </Step>
</Steps>

## What happens during execution [#what-happens-during-execution]

When all approvals are received, the settlement:

1. Validates all flows (sufficient balances, compliance checks)
2. Executes all transfers atomically in a single transaction
3. Distributes assets to recipients
4. Records the execution on-chain

If any transfer fails (insufficient balance, compliance block, etc.), the entire settlement reverts and all assets remain in escrow.

## Alternative scenarios [#alternative-scenarios]

### Manual execution [#manual-execution]

If auto-execute is disabled, after all senders approve:

1. Settlement enters **Ready** state
2. Anyone can click **Execute** to trigger the settlement
3. All flows execute atomically

This allows for a final review before committing.

### Buyer doesn't approve [#buyer-doesnt-approve]

If the Buyer doesn't approve before the cutoff date:

1. Settlement enters **Expired** state when the cutoff passes
2. The Builder can click **Withdraw** to reclaim their 1,000 PROP
3. The settlement cannot be executed after expiration

### Cancellation before execution [#cancellation-before-execution]

If any local participant decides to cancel before execution:

1. The participant clicks **Cancel**
2. All locked assets are returned to their original senders
3. Settlement enters **Cancelled** state
4. No assets exchanged

## Summary [#summary]

| Step | Action                    | Settlement state | Assets moved                       |
| ---- | ------------------------- | ---------------- | ---------------------------------- |
| 1    | Notary creates settlement | Pending          | None                               |
| 2    | Builder approves          | Pending (1/2)    | PROP → XvP                         |
| 3    | Buyer approves            | Executed         | EURD → XvP, then atomic settlement |

## Next steps [#next-steps]

<Cards>
  <Card title="Create a settlement" href="/docs/user-guides/system-addons/xvp-settlement/actions/create">
    Detailed guide to using the settlement wizard.
  </Card>

  <Card title="HTLC walkthrough" href="/docs/user-guides/system-addons/xvp-settlement/htlc/walkthrough">
    See how cross-chain settlements work with hash time-locked contracts.
  </Card>
</Cards>