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We formalize the order lifecycle as a state machine with timeouts: States: OPEN → MATCHED → FUNDED → CONFIRMED → SETTLED | DISPUTED → RESOLVED | EXPIRED

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Common Parameters (governed)

Protocol Parameters:
  • T_match (max time to accept a match)
  • T_fiat (max time to make fiat transfer)
  • T_confirm (confirmation window)
  • T_dispute (challenge window)
  • B_bond_user, B_bond_merchant (optional performance bonds/slashing weights by reputation tier and payment rail risk class)
  • min_amount, max_amount per rail/region
  • Fee schedules
  • Quote expiry windows
These parameters are governance-controlled and can be adjusted based on network conditions, risk assessments, and community input.

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On-Ramp (Fiat → USDC on Base; Solana planned)

1

Open Order

User opens BUY order with amount & rail.
2

Match

Protocol assigns a merchant (highest compatible Proof-of-Credibility and quote). Refundable bonds may lock.
3

Fund Fiat

User pays fiat to provided account within T_fiat.
4

Merchant Acknowledgment

Merchant confirms receipt of fiat payment.
5

Settlement

Contract releases USDC to user; fees assessed; bonds unlocked.
6

Dispute (if applicable)

If conflict, parties submit evidence; authorized admins issue on-chain verdict.

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On-Ramp State Transitions

OPEN
  |
  ├─> [T_match expires] ─> EXPIRED
  └─> [Merchant accepts] ─> MATCHED
         |
         ├─> [T_fiat expires] ─> EXPIRED
         └─> [User pays fiat] ─> FUNDED
                |
                ├─> [T_confirm expires] ─> DISPUTED
                └─> [Merchant confirms] ─> CONFIRMED
                       |
                       ├─> [Challenge raised] ─> DISPUTED ─> RESOLVED
                       └─> [T_dispute passes] ─> SETTLED

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Off-Ramp (USDC on Base → Fiat; Solana planned)

1

Open Order

User opens SELL order; transfers USDC to escrowless settlement adapter (contract holds or streams atomically per design).
2

Match

Merchant accepts and posts quote/bond.
3

Fund Crypto

User’s USDC is locked for settlement.
4

Merchant Pays Fiat

Merchant pays fiat and confirms completion; or user challenges.
5

Settle/Dispute

Settlement proceeds as with on-ramp flow.

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Off-Ramp State Transitions

OPEN
  |
  ├─> [T_match expires] ─> EXPIRED (USDC returned)
  └─> [Merchant accepts + posts bond] ─> MATCHED
         |
         ├─> [User doesn't lock USDC] ─> EXPIRED
         └─> [USDC locked] ─> FUNDED
                |
                ├─> [T_fiat expires] ─> DISPUTED
                └─> [Merchant pays fiat] ─> CONFIRMED
                       |
                       ├─> [User disputes] ─> DISPUTED ─> RESOLVED
                       └─> [T_dispute passes] ─> SETTLED

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Payment-Rail Risk Classes

Rails differ (instant/irreversible vs reversible/chargeback-prone). The protocol maps rails to bond multipliers, confirmation requirements, and longer/shorter dispute windows.

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Risk Classification

Low-Risk Rails:
  • UPI (India)
  • PIX (Brazil)
  • FPS (Hong Kong)
Characteristics: instant, irreversible, wide adoption
  • Shorter dispute windows
  • Lower bond requirements
  • Faster settlement
Medium-Risk Rails:
  • SEPA (Europe)
  • ACH (United States)
  • Wire transfers
Characteristics: slower, mostly irreversible, established
  • Standard dispute windows
  • Moderate bond requirements
  • Normal settlement timelines
Higher-Risk Rails:
  • Credit card payments
  • PayPal
  • Other chargeback-prone methods
Characteristics: reversible, chargeback risk, consumer protections
  • Extended dispute windows
  • Higher bond requirements
  • Additional confirmation steps

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Rail-Specific Parameters

Each rail class has governance-controlled parameters: 
{
  "rail_class": "UPI",
  "risk_tier": "low",
  "T_fiat": 300,        // 5 minutes
  "T_confirm": 600,     // 10 minutes
  "T_dispute": 3600,    // 1 hour
  "bond_multiplier": 1.0,
  "min_amount": 100,
  "max_amount": 50000
}
These parameters ensure appropriate risk mitigation for each payment method while maintaining protocol efficiency.

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