ILP Settlement Engines Architecture

Settlement Interaction Flow

Hover over steps to trace API calls between the Accounting System, Connector, and Settlement Engine.

Trigger Outgoing Settlement

Peer A's Accounting System debits its Accounts Payable (Liability) and makes an HTTP POST /accounts/:id/settlements request to trigger SE A.

Proxy Outgoing Message

SE A needs to exchange details (e.g., ledger IDs) with SE B. It sends POST /accounts/:id/messages to Connector A to proxy the message.

ILP peer.settle Transport

Connector A wraps the message in an ILP Prepare addressed to peer.settle and sends it over the existing ILP transport to Connector B.

Proxy Incoming Message

Connector B receives the ILP packet, extracts the data, and sends POST /accounts/:id/messages to SE B. (SE B replies via ILP Fulfill).

Execute Ledger Settlement

Having verified details, SE A executes an irrevocable transfer of the asset on the underlying Settlement System to SE B.

Credit Incoming Settlement

SE B detects the incoming funds on the ledger and calls POST /accounts/:id/settlements on Peer B's Accounting System to credit Accounts Receivable (Asset).

Layer 1: Interledger Node (Routing & Accounting)

Layer 2: Settlement Engine (Abstraction)

Layer 3: Underlying Ledger

Connector A

Accounting System

Accounts Payable

(Liability)

Accounts Rec.

(Asset)

Settlement Engine A

Independent Service / Process

Exposes API to Connector:

POST /accounts/:id/settlements

POST /accounts/:id/messages

Connector B