# Settlement Approach

One of the core features of X is its ability to provide real-time transactions, enabling users to move between crypto and fiat currencies effortlessly. The X Layer 2 and provides an efficient method for settlement using blockchain technology and XUSD as the settlement currency given its intrinsic value.

* **Transaction Process**: When a user initiates a transaction, the protocol validates and confirms the receipt of tokens on the network. Once confirmed, the system processes the transaction through the liquidity pool, allowing for immediate conversion and settlement.
* **Efficiency**: This real-time processing significantly reduces transaction times compared to traditional financial systems, enabling users to access funds quickly and efficiently.
* **Real World Use Cases**: Real-time transactions are particularly beneficial for everyday financial activities such as remittances, bill payments, and purchasing goods and services, enhancing the practical utility of digital assets.

To enable the above, a stablecoin-based liquidity pool will be leveraged to facilitate real-time transactions between crypto and fiat currencies. This pool is essential for maintaining liquidity and ensuring that users can seamlessly convert their digital assets into fiat and vice versa.

* **Mechanism**: The liquidity pool comprises xUSD and other stablecoins, backed by a reserve of X tokens and fiat currency. This setup ensures that there is always sufficient liquidity to handle transactions and conversions promptly.
* **Benefits**: By utilizing a stablecoin-based liquidity pool, X can offer users instant access to liquidity, reducing the delays and inefficiencies associated with traditional banking systems.