Solana Foundation launches atomic settlement program for institutions

One to two days of capital can be tied up in traditional securities settlement; Solana Foundation says its new Solana DvP program aims to move an asset and its payment together in one Solana transaction. That could give institutions settlement finality in seconds, while replacing bespoke smart contracts with a shared standard, according to the Foundation’s announcement.

The Foundation announced the open-source program on October 6. DvP means delivery-versus-payment: the asset transfers only when the payment does, reducing the risk that one side completes a trade while the other does not.

How does Solana DvP settle a trade?

Solana DvP uses escrow to hold the two sides of a trade and settle them atomically: either both transfer in the same transaction, or neither does. The Foundation says the program also isolates escrow and enforces deadlines.

That design is intended to bring settlement certainty to public blockchain infrastructure. In traditional markets, a chain involving clearinghouses, depositories and custodians can tie up capital for one to two days, the Foundation said. Its program aims to compress that process into one transaction with finality in seconds.

The project is released under the MIT license, an open-source license that allows others to use and build on the code. The Foundation says the program offers an API for financial institutions and is meant to replace the custom smart contracts often used for onchain institutional trades.

Which tokens and institutions can use it?

The program supports SPL Token and Token-2022, including extensions such as permanent delegate, pausable tokens and transfer hooks. These features can support issuer controls used with regulated tokens, though the announcement does not say that Solana DvP itself makes an asset or transaction compliant with any law.

Any two counterparties can use the program with a settlement agent, which could be a bank, custodian or exchange, the Foundation said. J.P. Morgan provided input on securities settlement practices and institutional requirements.

That input does not mean J.P. Morgan designed or endorsed the program. The Foundation’s announcement says the bank’s role was limited to providing settlement expertise; it did not design, develop, operate, approve or guarantee Solana DvP.

Is the program ready for production?

The Foundation says Solana DvP has undergone external security audits and is ready for use with real funds. It is still seeking design partners and early participants ahead of a production release.

Privacy is also on the roadmap, rather than a feature the Foundation says is available now. The announcement says it plans to add privacy so trade settlements can be private and confidential.

For institutions considering the program, the current offer is an audited, open-source settlement tool with escrow and deadline controls. The Foundation has not announced production partners or a production release date.

Sources

• Foundation’s announcement — solana.com