DvP & PvP in the Rayls Ecosystem

Delivery versus Payment (DvP) and Payment versus Payment (PvP) are foundational mechanisms in modern financial infrastructure, designed to eliminate settlement risk.

• DvP ensures that the delivery of a security (or asset) only occurs if payment is received.
• PvP ensures that a currency transfer in one direction happens only if a corresponding currency transfer occurs in the opposite direction.

These mechanisms are critical in cross-border settlement, interbank transfers, and asset trading. Within the Rayls Privacy Node, both DvP and PvP are programmable, privacy-preserving, and scalable — enabling institutions to build secure atomic settlement workflows across digital assets, fiat representations, and tokenised instruments.

DvP/PvP Settlement Workflow

1. Agreement and Setup
   Two parties — often financial institutions — agree on the terms of exchange. This may involve:
   • A digital asset (bond, equity, tokenised invoice) and a digital currency (e.g. Retail Coin, CBDCx)
   • Or two digital currencies in different denominations

Each party deposits the respective asset/token into a smart contract escrow or equivalent holding logic.

2. Condition Programming
   Settlement logic is encoded to ensure atomicity. In Rayls, this is handled via smart contracts or the Teleport Atomic Protocol, which guarantees that both sides of the transaction settle simultaneously — or not at all.

3. Validation and Execution

   • The system verifies that both assets are present, valid, and in correct amounts.
   • Upon satisfaction of all conditions, the settlement is executed in a single transaction.

4. Finality
   The exchange is considered final and irreversible, visible to only the involved parties and (optionally) regulatory auditors.

Why Use Rayls for DvP/PvP?

• Atomicity: Settlements are completed in a single, indivisible operation — eliminating risk of partial execution.
• Privacy by Design: Only the transacting parties and authorised roles (e.g. auditors) can see transaction data.
• Cross-Node Capability: Assets and currencies can reside in different institutions’ nodes or subnets.
• Programmable Logic: Institutions can embed business rules, legal terms, or compliance checks directly into the transaction.
• Auditor Access: Designated oversight roles can view transaction metadata without exposing sensitive business logic.

DvP Use Case: Asset Settlement Against Retail Coin

Scenario: A tokenised government bond is exchanged for a Retail Coin representing fiat currency.

• The asset issuer deposits the bond (ERC-721 or ERC-1155) into the Enygma DvP smart contract.
• The buyer deposits Retail Coin (ERC-20) into the same contract.
• Logic ensures both assets are valid and meet the agreed-upon conditions.
• Assets are exchanged atomically — delivery and payment occur in the same transaction.
• Internal explorer shows transaction proof to both parties and, if applicable, regulators.

PvP Use Case: Cross-Border Currency Exchange

Scenario: Bank A pays €Token, Bank B pays £Token in a bilateral forex trade.

• Each bank locks the agreed amount of currency tokens into Enygma PvP contract.
• The contract validates receipt of both sides and executes the trade atomically.
• If one side fails to deposit or cancels, the transaction aborts safely.
• Auditor role (if assigned) can view the fact of execution and values, but not internal balances or counterparties.

Rayls Enygma Protocol Supporting DvP and PvP

1. Enygma Protocol (Optional for sensitive financial instruments)
   Use Enygma for additional privacy, especially in wholesale, regulatory, or cross-jurisdictional DvP/PvP flows. It ensures role-based access to visibility and preserves confidentiality even across institutional lines.
   • Rayls Enygma Overview

Final Note

DvP and PvP are essential for building trust in institutional-grade digital finance. The Rayls Privacy Node within a subnet enables these mechanisms with precision, privacy, and scalability — allowing institutions to settle assets and currencies with confidence, across borders and between nodes.

Whether you are digitising securities, executing FX trades, or settling derivatives, Rayls offers the tooling to ensure your settlements are atomic, compliant, and private.

To explore integration pathways, cross-node settlement setups, or bespoke governance models, continue your journey through Rayls Documentation or contact our team.