Settlement is the critical process that moves Virtual UTXOs (VTXOs) from a preconfirmed state to their final confirmed state on the Bitcoin blockchain.

In Arkade, VTXOs can exist in two primary states:

  • pending (preconfirmed)
  • settled (batched onchain)

When a VTXO is first created through an offchain transaction, it exists in the pending state where it can be used for further offchain activity but carries trust assumptions about the Operator.

Through the settlement process, these pending VTXOs are included in a Commitment Transaction and anchored to the Bitcoin blockchain, providing them with full settlement guarantees and unilateral exit rights.

// Get all VTXOs and check their status
const vtxos = await wallet.getVtxos()
const pendingVtxos = vtxos.filter(vtxo => vtxo.status === 'pending')
const settledVtxos = vtxos.filter(vtxo => vtxo.status === 'settled')

console.log('Pending VTXOs:', pendingVtxos.length)
console.log('Settled VTXOs:', settledVtxos.length)

For more detailed information about the batch swap process that underlies settlement, see the Ark Batch Swaps documentation.