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 Rayls Sovereign, both DvP and PvP are programmable, privacy-preserving and scalable, which lets institutions 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 (for example Retail Coin or CBDCx)
   • Or two digital currencies in different denominations

Each party deposits the respective asset or 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 the correct amounts.
   • Once all conditions are satisfied, the settlement is executed in a single transaction.

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

Why Use Rayls for DvP/PvP?

• Atomicity: settlements complete in a single indivisible operation, so partial execution cannot occur.
• Privacy by Design: only the transacting parties and authorised roles, such as auditors, can see transaction data.
• Cross-Node Capability: assets and currencies can reside in different institutions' nodes or Private Networks.
• 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 checks that both assets are valid and meet the agreed conditions.
• Assets are exchanged atomically, so delivery and payment occur in the same transaction.
• The internal explorer shows transaction proof to both parties and, where applicable, to 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 the 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.
• The auditor role, where assigned, can view the fact of execution and the 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, particularly in wholesale, regulatory or cross-jurisdictional DvP and PvP flows. It gives role-based access to visibility and preserves confidentiality across institutional lines.
   • Rayls Enygma Overview

Final Note

DvP and PvP are essential to trust in institutional-grade digital finance. Rayls Sovereign within a Private Network supports both mechanisms with precision, privacy and scale, so institutions can settle assets and currencies across borders and between nodes.

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

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