Local Liquidity and Global Finality
This paper examines how obligations can be satisfied using liquidity already present near a recipient, decoupling the moment of recipient-side finality from the moment, if any, at which corresponding capital is displaced elsewhere in the network.
1. Two Notions of Finality
Traditional settlement conflates two events that need not be simultaneous: the recipient obtaining usable value, and the sender's capital being consumed to fund it. NIL separates these explicitly through the Human Settlement Cell abstraction — a local execution endpoint that can satisfy a recipient immediately using domain liquidity, independent of when or whether upstream rebalancing occurs.
2. Local Finality Conditions
A domain achieves local finality for an obligation when an HSC within that domain has produced a valid Execution Witness against the obligation's terms. This condition is entirely local: it does not require knowledge of the originating domain's liquidity state at the moment of execution.
3. Global Consistency
Local finality alone does not close the network's books — the domain that supplied liquidity now carries exposure against the domains it serves. Global finality, in the strict sense, is only reached once that exposure is resolved through netting or rebalancing at epoch close. We treat local finality as sufficient for recipient-facing guarantees and global finality as a network-level bookkeeping property.
4. Failure Isolation
Because local finality is domain-scoped, a rebalancing failure or liquidity shortfall in one domain does not retroactively invalidate finality already granted to recipients in another. Failures propagate as exposure, not as reversed settlements — see NIL-R04.