# Phase 4: Settlement

**Position Updates**

* New position states calculated
* Funding payments accrued
* Realized PnL computed
* Margin requirements updated

**On-Chain or Commitment** Position state updates are either:

* Written directly to chain (lower throughput, maximum transparency)
* Recorded as verifiable commitment to state root (higher throughput, still verifiable)

**Funding Settlement** Premium between mark price and index price is settled based on time-weighted average.