How NIL Separates Intent From Movement
NIL decomposes a payment into ten discrete stages, presented here as plates. Every stage is a protocol-level concern with its own state, and no two stages are required to occur together. For normative detail, see the documentation.
Payment ≠ Movement
A payment instruction and the movement of capital are treated as one event by conventional infrastructure. NIL treats them as two events that may occur at different times, in different places, or not at all in the case of capital movement, if netting resolves the imbalance first.
Intent
A participant expresses a Settlement Intent: a desired economic outcome, not an instruction to move funds. The intent names an origin domain, a destination domain, and a notional value — nothing about execution path.
I {
originDomain
desiredDomain
notional
unit
}Obligation Generation
A compiler validates the intent and produces an Obligation Object (Ω) — a durable, trackable representation of the commitment. This is the moment a payment becomes a protocol object rather than an instruction.
Ω {
id
originDomain
settlementDomain
state: UNRESOLVED
}Domain Routing
The obligation is routed across a corridor connecting its origin and settlement domains. Routing considers corridor capacity and, increasingly, expected netting efficiency — see Capital Displacement Ratio.
Local Execution
Within the settlement domain, a Human Settlement Cell is assigned and satisfies the recipient using liquidity already present locally — not liquidity forwarded from the origin.
Witness
The executing HSC produces an Execution Witness — signed evidence that the obligation's terms were satisfied. Without a valid witness, an obligation cannot progress toward resolution.
Graph Formation
Witnessed and unresolved obligations join the network's live obligation graph — a directed structure where nodes are settlement domains and edges are outstanding obligations between them.
Netting
At each Netting Epoch, the graph is scanned for cycles. Where obligations offset — A owes B, B owes C, C owes A — the overlapping portion is cancelled algebraically, without any capital moving.
Residual Exposure
What survives netting is Residual Exposure — the genuinely irreducible imbalance between domains. This is the only portion of gross obligation value that requires physical capital movement.
Finality
Settlement is not defined as funds having moved. It is defined as the obligation no longer representing an unresolved commitment — locally, once witnessed, and globally, once the resulting exposure is cleared.
Every obligation moves through this cycle. What varies is how much of it produces capital movement — see Capital Displacement Ratioⓘ — and how long each stage takes, which is governed by corridor health, HSC availability, and epoch timing.