Solana introduces DvP standard for atomic settlement

The Solana Foundation unveiled an open-source delivery-versus-payment (DvP) system on October 6, aiming to streamline tokenized asset and payment settlements on the Solana blockchain. This DvP framework offers a standardized escrow mechanism and application programming interface, replacing the need for bespoke smart contracts in onchain settlements.

The program, released under the MIT license and subject to a Cantina security audit, places each leg of a trade into separate escrow accounts. A designated settlement authority, which could be a bank, custodian, exchange, or other agreed-upon agent, releases both legs in a single atomic transaction. If either leg fails to complete, neither transfer occurs, mitigating principal risk when assets and payments are settled at different times.

J. P. Morgan contributed insights on securities-settlement practices and institutional requirements. Catherine Gu, Solana Foundation's head of digital assets product, emphasized the program's role in providing an open standard across the Solana ecosystem, targeting finality in seconds rather than days. Rhodel D'Souza, J. P. Morgan's head of markets digital assets, highlighted that a shared DvP standard is essential infrastructure for institutions aiming to operate at scale while minimizing settlement risk and counterparty exposure.

Under Solana DvP, parties record trade terms onchain, including counterparties, assets, amounts, settlement authority, and expiry. They then fund their respective escrows using standard token transfers. The settlement authority, unable to redirect proceeds as destinations are predetermined, signs the transaction releasing both legs. Either party can reclaim their leg before settlement, and cancellation or rejection mechanisms return escrowed assets to their owners.

The framework supports both SPL Token and Token-2022 assets, accommodating features used by regulated issuers like permanent delegates and pausable tokens. However, it does not include matching, price discovery, order books, netting, or partial fills. It is a bilateral process requiring both trade legs to exist as token accounts on Solana and does not perform eligibility or know-your-customer checks.

While creating a trade record is permissionless, participants must verify counterparties, token mints, amounts, destinations, authority, and timing before funding or settlement. The program charges no protocol fees beyond network transaction costs and account rent.