The Solana Foundation has launched Solana DvP, an open-source program designed to help banks and financial institutions settle trades on the Solana blockchain. The tool was built with input from J.P. Morgan on institutional settlement practices.
DvP stands for delivery-versus-payment, a financial process that ensures an asset and its payment change hands simultaneously. Solana DvP operates as an escrow program that provides institutions with a standard API for this type of settlement, released under the MIT license to enable broad adoption.
How It Works
Traditional delivery-versus-payment settlement runs through clearinghouses, depositories, and custodians, a process that typically takes several days and can tie up capital for one to two days.
Solana DvP combines the process into a single atomic transaction. Both the asset and payment settle together, or neither does, eliminating counterparty risk inherent in traditional settlement.
The program supports SPL Token and Token-2022 standards, including features used by regulated issuers such as permanent delegate, pausable tokens, and transfer hooks. It has undergone outside security audits, with the foundation planning to add privacy features for confidential settlements.
Industry Response
Catherine Gu, the Solana Foundation's head of product for digital assets, stated that the program provides institutions with a single open standard offering "finality in seconds instead of days."
Rhodel D'souza, J.P. Morgan's head of markets digital assets, described a shared, open standard for atomic delivery-versus-payment as "exactly the kind of foundational infrastructure institutional market participants require."
Context
The launch follows other major firms' moves to use Solana for tokenized real-world assets. In August, BlackRock launched a tokenized money market fund for stablecoin reserves that records ownership on Solana and Ethereum. Kraken has also used Solana to offer tokenized U.S. stocks to customers outside the country through its xStocks product.
