JPMorgan Contributes to Altcoin Initiative: Days-Long Settlements to Take Seconds!
The Solana Foundation announced the Solana DvP program, developed with JPMorgan’s expertise, providing shared infrastructure that will enable institutions to complete asset delivery and payment together in seconds instead of days.
According to the announcement reported by CoinDesk, the open-source Solana DvP, introduced on October 6, was designed to settle institutional transactions in a single on-chain transaction. The program aims to prevent the party delivering an asset from having to trust the other party to make payment later.
In traditional markets, assets and cash can pass through different stages among settlement and custody institutions. This process, which can take one to two days, ties up capital until the transaction is complete and also carries the risk that one party may fail to meet its obligations.
Assets and payments will change hands simultaneously
In the DvP model, which stands for “delivery versus payment,” the asset and payment are combined in a single atomic transaction: Both are completed together, or the transaction does not take place. This eliminates settlement risk arising when one party receives the asset or money but fails to deliver the other in return.
The Solana Foundation says the program can finalize this process in seconds. Instead of developing a separate smart contract for each agreement, institutions will also be able to use a shared open standard on Solana.
How did JPMorgan contribute to the project?
JPMorgan helped shape the project’s requirements by sharing its settlement expertise. The bank’s contributions covered topics such as transaction deadlines, the segregation of assets held in custody, and token features used by regulated issuers.
These features also include mechanisms that allow transfers to be halted when necessary. The aim is to bring together the controls required by traditional financial institutions and on-chain settlement infrastructure.
According to the Solana Foundation, the program has passed independent security audits and is ready for use with real funds. Features to protect transaction privacy are planned for a later date.
Solana has previously been used in institutional pilots, such as the Galaxy Digital commercial paper transaction arranged by JPMorgan and settled in USDC. The new program aims to make it easier to carry out transactions of this kind without setting up custom infrastructure each time.