> For the complete documentation index, see [llms.txt](https://ipusd.gitbook.io/ipusd-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://ipusd.gitbook.io/ipusd-docs/user-guide/settlement-and-ip-vault-rounds.md).

# Settlement and IP Vault Rounds

Settlement is the third step in the IP Vault flow.

It is the point at which eligible queued ipUSD is converted into IP Vault shares, or eligible Standard Withdrawal requests are converted back into claimable ipUSD.

The protocol uses Rounds to define how much can be processed during a Settlement.

A Round sets processing limits such as Settlement Capacity and Standard Withdrawal Capacity. The contract-enforced FIFO queues determine which requests are processed first.

Capacity therefore controls **how much** can settle, while FIFO controls **who is next**.

| Stage                          | What happens in the Vault                                                                                                               | Effect on users                                                                                               |
| ------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- |
| Round proposed                 | The Operator schedules `openRound` through the AdminTimelock with Settlement Capacity, Standard Withdrawal Capacity, and Round End Time | The operation enters the mainnet 10-minute waiting period; the proposed capacities are not yet active.        |
| Round opened                   | The scheduled operation is executed and creates the new Round                                                                           | The Round’s capacities and cutoff become active; no subscription is settled and no shares are issued          |
| Round active                   | Users can continue subscribing, and the Operator may schedule Capacity updates                                                          | Eligible subscriptions remain queued until Settlement                                                         |
| Queue frozen or cutoff reached | The Operator may execute `convertQueue` to freeze the subscription boundary, or the Round reaches its cutoff                            | Subscriptions outside the eligible boundary wait for a later Round                                            |
| Round closed                   | `closeRound` processes eligible subscriptions and Standard Withdrawals within the available capacities                                  | Settled subscriptions can claim shares; settled withdrawals can claim ipUSD; uncovered requests remain queued |
| Next Round                     | The Operator proposes another Round based on the queues, liquidity, and Vault requirements                                              | Unprocessed requests keep their queue position and do not need to be resubmitted                              |

Opening a Round does not settle subscriptions or issue shares. `convertQueue` freezes the eligible subscription boundary but does not issue shares.

Round End Time is an eligibility cutoff. It does not automatically execute `closeRound`. Settlement occurs when the relevant Timelock-controlled operation is executed.

Remaining Settlement Capacity may reach zero while the IP Vault continues accepting subscriptions, provided the applicable launch cap has not been reached. New subscriptions still enter the FIFO queue and wait for later Capacity.

Scheduled administrative operations use a 10-minute Timelock delay on Soneium mainnet. Handoff operations use a separate 24-hour delay. Once published, the operation and its execution time are visible onchain. The operation may be cancelled before execution.

Standard Withdrawal Capacity is denominated in IP Vault shares and is applied to the Standard Withdrawal queue during `closeRound`. A newly submitted Standard Withdrawal should be treated as waiting for a future Round rather than as guaranteed for the currently displayed Round.

RWA purchases and RWA redemptions are separate asset-settlement processes. They affect the Vault’s asset composition and available liquidity but are not part of user-facing Settlement Capacity.