Overview
XvP Settlement enables atomic multi-party asset exchanges where all transfers execute together or none execute at all. Learn about DvP, PvP, and cross-chain settlement scenarios.
XvP Settlement provides atomic swap capabilities for tokenized assets. The "X" in XvP stands for the variable leg of the exchange, which can be either Delivery (DvP) or Payment (PvP).
What is XvP Settlement?
XvP Settlement eliminates counterparty risk by guaranteeing that either all parties receive their assets or no assets change hands. Single-chain settlements execute atomically in one transaction; cross-chain settlements use cryptographic locks to coordinate execution across chains. This "all-or-nothing" guarantee prevents partial settlement failures.
Settlement types:
- DvP (Delivery vs Payment) - Exchange assets for cash (e.g., bonds for USDC)
- PvP (Payment vs Payment) - Exchange one cash asset for another (e.g., EUR stablecoin for USD stablecoin)
Common use cases
- Bond trades - Investor purchases corporate bonds with stablecoin
- Secondary market sales - Holder sells tokenized equity to another investor
- Currency exchanges - Treasury converts between stablecoin denominations
- Multi-party transactions - Complex deals involving three or more parties
- Cross-chain swaps - Exchange assets held on different blockchains
Settlement types
XvP supports two settlement modes based on where your assets are located:
| Type | When to use | Coordination method |
|---|---|---|
| Local | All assets on the same chain | Direct atomic execution |
| HTLC | Assets on different chains | Hash time-locked contracts |
Local settlements
Use local settlements when all assets involved are on the same blockchain. The settlement executes atomically when all parties approve their flows.
HTLC (cross-chain) settlements
Use HTLC settlements when assets are spread across different blockchains. A cryptographic hash links the settlements on each chain, ensuring coordinated execution.
Key concepts
Understanding these terms will help you work with XvP settlements:
| Term | Definition |
|---|---|
| Flow | A single asset transfer from one address to another, including the token, amount, sender, and recipient |
| Local flow | A flow that executes on the current chain |
| External flow | A reference to a flow on another chain (informational only, does not execute locally) |
| Approval | When a sender locks their assets into the settlement contract |
| Hashlock | A cryptographic hash that links settlements across chains |
| Secret | A value that, when revealed, proves ownership and triggers execution |
| Cutoff date | The deadline after which the settlement expires and locked assets can be withdrawn |
Settlement lifecycle
Every settlement progresses through these states:
- Pending - Settlement created, awaiting approvals from senders
- Approved - All senders have approved (for HTLC, enters "Armed" state awaiting secret)
- Executed - All flows completed successfully
- Cancelled - Settlement cancelled before execution
- Expired - Cutoff date passed without execution
State differences
Local and HTLC settlements have slightly different state transitions. See the respective overview pages for detailed state diagrams.
Further reading
Install addons
Learn how to discover and install system addons from the on-chain Directory registry. Addons extend your tokenized assets with advanced capabilities.
Overview
Local settlements execute all asset transfers atomically on a single blockchain. Learn when to use local settlements and how the approval workflow operates.