We are proud to announce the release of Corda Settler, an open source CorDapp that allows Corda users to settle using any payment method. You can read the full press release HERE and get the code HERE.
Corda Settler provides a bridge to any payment rail that can return a cryptographic proof of settlement. This includes any ‘traditional’ domestic and cross border payment systems able to return such a proof, as well as blockchain and cryptocurrency-based rails. We also tried to follow the KISS acronym (‘keep it simple, Settler’ in this case). Only two integration points are required: one to initiate payment and the other to track payment status.
Corda Settler is part of the ethos behind all the work undertaken at R3. We have been working since 2015 to bring the ‘future of blockchain’ to the current world…one that is still chockablock with existing, legacy systems. A key challenge for the adoption of blockchain technology at scale will be avoiding having blockchain implementations become isolated systems, unable to plug into what exists today. No one wants to wait for an ‘IT revolution’ to get them installed (as folks say, hope is not a plan!). Corda Settler is an initial step to bridge the emerging and existing world.
Corda Settler + XRP
The first payment rail enabled for Corda Settler is the XRP Ledger. Since both Corda and the XRP Ledger are open source, it was easy for our dev team (and by ‘team’ I mean Roger Willis!) to make it happen. We also think that by using XRP, we can show one of the core value props of cryptocurrency: its utility as a peer-to-peer and near-instant settlement asset.
When a payment obligation arises on Corda, one party can request settlement using XRP. The other party will be notified that settlement in XRP has been requested and that they must instruct a payment to the required address before the specified deadline.
Once Corda’s oracle service validates the payment has been made then both parties can treat the obligation as settled. The Corda Settler will verify that the beneficiary’s account was credited with the expected payment, automatically updating the Corda ledger. Boom!
Corda Settler can operate in one of two modes. The one shown above is the simpler approach that requires no changes to either ledger, as it uses a mutually trusted oracle for the obligation settlement. For those a bit more adventurous, Corda Settler can also be implemented where the Corda ledger verifies the settlement proof directly.
Why this is cool
We built Corda Settler as a CorDapp that can be easily integrated into the workflow of any other Corda application, so that users and business networks can couple asset transactions with cryptographically confirmed digital payments in an extremely straightforward way. And most importantly, they can do it today, using existing technology and established payment rails.
As we have highlighted in previous posts, the demand for settlement from Corda users has kicked off in earnest and will only increase in 2019 and beyond as more asset-focused Corda business networks go live. In some ways, this might resemble the internet-boom era marketplaces such as eBay, but instead of Beanie Babies we have provably-scarce digital assets…
One of the limiting aspects to the early growth of eBay was the inability for asset sales, whether they be for cheap tchotchkes or expensive antiques, to be reliably coupled with a completed payment. Sellers didn’t want to send off their reindeer ornaments before knowing that the $9.99 payment obligation had been settled. Enter PayPal. When the online asset marketplace integrated a ‘bridge’ to the PayPal payment rail, eBay’s two sided market exploded. The relationship became so symbiotic that eBay eventually acquired PayPal (for an interesting summary on that deal, check out this Quora answer).
In the early 2000’s, the combo of ‘eBay plus PayPal’ allowed for buyers and sellers to transact with each other with reduced friction. Bringing this back to today, we see Corda Settler being the plus in the analogous Corda combo. Crucially though, because of Corda Settler’s simple yet powerful design, there will not be a single PayPal equivalent. Instead, Corda users will have a settlement bridge capable of reaching scores of payment rails, allowing transaction participants the flexibility of deciding for themselves what to optimize for with their settlement method.
Corda Settler has been designed and built as a generic CorDapp that can be plugged into any other CorDapp, so it will allow users to make settlements via almost any payment rail. We look forward to seeing how our community puts it to use. In the next phase of development, the Settler will expand to support domestic deferred net settlement and real-time gross settlement payments.
We are currently working on prioritizing the next set of integrations, so if you are working with a blockchain project or settlement rail and would like to talk, contact us at email@example.com. And look out for some more exciting announcements in early 2019.