An educational guide detailing the architecture, stack layers, accounting abstractions, and settlement mechanics of Interledger (ILP) v4. Includes interactive visualizations.
Select a topic below to read the comprehensive overview and launch its corresponding interactive flow simulator.
ILP uses a packet-routing model to move value across separate, unconnected blockchains and ledgers. In this model, Senders construct ILP Packets containing payment details, Connectors route them across intermediate hops, and Receivers fulfill payments using cryptographic preimages.
Just as the Internet protocol suite stacks HTTP on top of TCP and IP, the Interledger suite separates application setup, transport encryption, packet routing, and link layer framing to preserve ledger agnosticism and optimize throughput.
Interledger separates high-speed transaction forwarding from low-speed physical value transfer. Peer nodes update internal "clearing accounts" at millisecond speeds. If the balance exceeds a configured threshold, a formal ledger transaction is generated to settle the debt.
To maintain maximum agility, ILP routing engines are completely decoupled from ledger consensus operations. Routers delegate ledger-specific tasks (e.g. executing on-chain transfers, monitoring block explorers) to external microservices called Settlement Engines.
The Interledger Protocol (ILP) is an open-source protocol suite for sending payments across different ledgers. Its design is heavily inspired by the Internet Protocol (IP). Just as IP splits data files into small packets and routes them hop-by-hop across networks (independent of the physical link layer), ILP splits transactions into small fragments (packets) and routes them across intermediate connectors (independent of the ledger types).
Unlike traditional netting systems or centralized settlement hubs, Interledger uses a completely decentralized peering network. It enables frictionless routing between local banks, mobile money operators, and web3 blockchains. In this framework, the core protocol remains extremely fast and lightweight, while ledger-specific operations are isolated inside modular modules.