Settlement
Settlement is the point at which a transaction becomes final: each party holds the asset it is owed and the record of who holds what is updated. For SODAX cross-network actions, the Hub records settlement, and a trade completes as requested or reverts and returns the original assets.
What it refers to
Settlement is the point at which a transaction becomes final: each party holds the asset it is owed, and the record of who holds what is updated to reflect it. It is a separate step from agreeing on terms, such as accepting a quote, and from the steps that carry the transaction out.
On a single blockchain network, a trade usually settles when the transaction that carries it is confirmed on that network. A trade that spans networks has no single ledger to confirm it, so its settlement has to be recorded in a place that can see every part of it.
Why this concept exists
A financial action is only useful once it is final. A quote, a submitted request or one confirmed step on one network does not yet mean the user holds what they asked for. Settlement names the moment when they do, and separates a finished action from one still in progress.
What this changes for system design
Across networks, each network confirms its part on its own schedule, so cross-network execution is asynchronous. A system has to track every step and settle only once the destination asset has arrived, rather than treat the first confirmation as the end.
In SODAX, the Hub keeps the accounting and records settlement for cross-network actions, and SODAX's own messaging protocol and relay carry each action between networks. SODAX routes, quotes and settles, and a permissioned solver within the SODAX system performs the fill. Quoting is kept separate from execution. A trade completes as requested or reverts and returns the original assets, with no mid-route substitution of the destination token, and SODAX never takes custody along the way.
Related terms
- Hub: where SODAX records settlement
- Recoverability: completes or reverts
- Cross-network execution: the process that ends in settlement
- Asynchronous reality: networks confirm on their own schedules
- State transitions: moving from one defined state to the next
- Cross-chain swap: a trade that settles across networks