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Solana releases settlement program shaped by J.P. Morgan input

Solana Foundation has released an open-source settlement program shaped by J.P. Morgan input, aiming to let institutions exchange tokenized assets and cash at once.

Onchain Report Newsroom#d606302 min read

Solana releases settlement program shaped by J.P. Morgan input

Solana Foundation announced Solana DvP on Oct. 6, an open-source program for institutions to settle trades on the Solana blockchain. It aims to let cash and an asset change hands together, reducing the risk that one side pays without receiving what it bought. The Solana Foundation announcement says J.P. Morgan gave input on institutional settlement practices and requirements.

How does Solana DvP settle a trade?

It uses delivery-versus-payment, or DvP: the cash and asset transfer in the same transaction, or neither transfer happens. This is called atomic settlement. The Foundation says the program combines escrow, which holds assets during a trade, with deadlines for settlement. It is designed to finish in seconds.

In traditional markets, securities trades can pass through clearinghouses, depositories and custodians, with settlement taking one to two days, according to the Foundation. Onchain trades have often used custom-built smart contracts for each deal. Solana DvP is intended as one reusable standard instead.

What can institutions use it for?

The program supports Solana’s SPL Token and Token-2022 formats, including features such as pausable tokens and transfer hooks. Those features can give issuers more control over how tokens move. The Foundation says any two counterparties can use the program with a settlement agent, such as a bank, custodian or exchange. It is released under the MIT open-source license.

The Foundation says Solana DvP has passed external security audits and is ready for use with real funds. It is seeking design partners and early participants ahead of a production release. The announcement does not name institutions already using the program or report completed trades.

What was J.P. Morgan’s role?

J.P. Morgan contributed input on securities settlement practices. The Foundation says the bank did not design, develop, operate or approve Solana DvP, and its input is not an endorsement or guarantee. TheStreet’s report on the launch likewise describes the bank’s contribution as advisory.

The Foundation says it plans to add privacy features for confidential trade settlements. For now, the stated goal is to give institutions a shared settlement process on a public blockchain. Whether firms adopt it at scale will depend on future use and production rollout.

Sources