Atomic settlements (X versus Payment Settlements)

What is X versus Payment Settlement?

The X versus Payment (XvP) Settlement is a solution enables atomic, trustless settlements of digital assets between parties. This feature provides a mechanism for executing delivery-versus-payment (DvP), payment-versus-payment (PvP), or any asset-versus-asset exchange in a single, indivisible transaction.

Key benefits

Creating an X versus Payment Settlement

To create a new X versus Payment Settlement, navigate to the XvP Settlement section and click "Create new XvP Settlement." The creation interface allows you to configure:

1. Settlement flows: Configure two or more flows, where each flow specifies:

   • From: The sending party's wallet address
   • To: The receiving party's wallet address
   • Asset: The digital asset to be transferred
   • Amount: The quantity of the asset to be transferred

   

2. Expiry date: The date after until which the settlement can be executed

3. Auto-execute: Whether to automatically execute the settlement on final approval

   

Lastly, review the settlement details and submit the transaction to deploy a new XvP Settlement contract.

Compliance conditions for digital assets can be configured through the SMART protocol (coming soon) directly on the assets themselves.

Once configured, submit the transaction to deploy a new XvP Settlement contract. The newly created contract will appear in your settlement list for monitoring.

Approving an X versus Payment Settlement

When you're involved in an X versus Payment Settlement as a sender, you'll need to approve it before it can be executed. The approval process includes:

1. Granting the settlement contract an allowance to transfer the specified assets from your wallet
2. Then, sending your approval to the settlement contract itself

Once all involved parties have sent their approval, the settlement is ready to be executed.

You can set up workflows for execution at a certain time or on other events.

Execution phase of an X versus Payment Settlement

The execution phase is where the X versus Payment Settlement demonstrates its value. During execution:

1. The settlement contract verifies all required approvals are in place
2. It checks that the settlement hasn't expired or been cancelled
3. It atomically transfers all assets between parties in a single transaction

If auto-execution is enabled during creation, the settlement contract will automatically execute when the final party approves it. In this case, the last approver pays the gas fees for the execution transaction.

Cancelling an X versus Payment Settlement

Any involved party can cancel an X versus Payment Settlement before it has been executed. This provides a safety mechanism if:

• Settlement parameters were incorrectly configured
• Market conditions changed before execution
• A party needs to withdraw from the agreement

Once a settlement is cancelled, it cannot be reactivated or executed.

Settlement states

An X versus Payment Settlement can exist in one of the following states:

• Pending: Created but not yet fully approved by all parties
• Ready: Fully approved and ready for execution
• Executed: Successfully completed, with all assets transferred
• Expired: Past the cutoff date and no longer executable
• Cancelled: Explicitly cancelled by an involved party

These states help track the lifecycle of each settlement and provide clarity on its current status.

Technical implementation

The X versus Payment Settlement is powered by a secure smart contract that follows best practices for atomic exchanges. The contract:

• Utilizes OpenZeppelin's security libraries
• Implements reentrancy protection
• Supports meta-transactions for gasless operations
• Includes comprehensive error handling
• Emits events for all key actions for auditability

Each settlement contract maintains its own state and manages the asset flows between parties, ensuring settlement integrity and security.