Ledger: Stripe's system for tracking and validating money movement

https://stripe.com/blog/ledger-stripe-system-for-tracking-and-validating-money-movement

by louis-paul • 2 years ago

135 37 2 years ago

stripe.com

dalton• 2 years ago

For those curious, YC funded an open source financial ledger company in S21: https://github.com/formancehq/stack

neoecos• 2 years ago

It is actually a very good product.

westurner2• 2 years ago

Did they implement Interledger Protocol (ILP) for their traditional or digital asset ledger? https://interledger.org/developers/rfcs/interledger-protocol...

superzamp• 2 years ago

Mentioned company founder here, we did not yet! I'm glad to see the ILP project is continuing to progress well though, we should definitely consider it again.

brunoqc• 2 years ago

I guess it's "open core". "View license"

ericyd4• 2 years ago

I'm not sure who is the audience of this article. I've worked in fintech and have read several practical guides on ledgers and found them interesting reads. In contrast, this one is laden with overly verbose language whose meaning is unclear, such as

Transaction-level fund flows give us powerful tools to reason about complex interconnected subcomponents.

This article reads as a fluff piece for investors to me; it's primary purpose seems to be boasting about their own quality while offering only the smallest of breadcrumbs about the underlying system.

I'd be curious if others have a different read, and found this to be more insightful/interesting, and why.

ian0• 2 years ago

have read several practical guides on ledgers and found them interesting reads

Can you share some links?

milesskorpen2• 2 years ago

Modern Treasury has some great docs: https://www.moderntreasury.com/learn/what-is-a-ledger

ericyd4• 2 years ago

I'm fully aware of how unsatisfying this reply is, but unfortunately I can't seem to find links. It's been a few years since I was deep diving into ledgers and I must have cleared my bookmarks from that time.

dghlsakjg2• 2 years ago

Stripe strongly encourages writing for its own sake. So much so that they run their own press. I suspect the intended audience is whoever is curious for a medium depth primer in what a ledger looks like for a company handling billions of transactions.

As someone in payment tech I found it very interesting.

ilganeli2• 2 years ago

Hello! I am the author. Thank you for the comment.

While Stripe does love to write, I think our core premise here was that being able to reason mathematically about independent distributed systems was a unique application of a ledger. Likewise, we think the data quality offering is a unique extension since it gives us tools to make improvements to our systems over time.

newZWhoDis• 2 years ago

As someone looking to setup $5m/year in a small side business I was frustrated to learn stripe categorically bans what I was planning. I’m on Braintree now and assumed stripe would be better. Now looking for alternatives.

kaycebasques• 2 years ago

How is Stripe doing? There seems to be less HN front page news about Stripe these days.

joshmanders• 2 years ago

Things that just work quickly become boring and untalkworthy. Stripe is still king.

hitekker• 2 years ago

Internally, pretty messy, lots of burn out. Some of the big names they hired and the products they championed flamed out or became irrelevant.

However, they still have decent numbers to show their investors.

reese_john• 2 years ago

Even when we have billions of transactions, a single missing, late, or incorrect transaction immediately creates a detectable accuracy issue with a simple query—for example, “Find the clearing Accounts with nonzero balance.”

How do you deal with float, transactions where the first leg happens in T+0 but settlement is done in T+N ? Do the clearing accounts have a flag/mark allowing for a nonzero balance?

ilganeli2• 2 years ago

We model a timestamp which functionally is "when does this activity go on the books"? We compute clearing both based on this "effective_at" and a "system time" (there are some business functions with known periodicity and it makes for a useful debugging tool).

Long-clearing activity makes for some interesting business cases and long-standing float obviously can lead to some detection noise. For example, Brazil has uniquely long settlement times.

dwightboyyy• 2 years ago

I work with payments in a bank in Brazil and as I was reading the question I thought "interesting question, here we have a great 'delay' in clearances and very old and very complex government-embedded systems to deal with it, funny to see that you know about it too.

btw, are you familiar with Pix? https://www.bcb.gov.br/en/financialstability/pix_en

milesskorpen2• 2 years ago

The general way you'd handle this is with undeposited or in-transit ledgers. Funds would go Account A > Undeposited Account B > Deposited Account B, where they're typically in Undeposited Account B for N days. All ledgers would balance.

lijok• 2 years ago

Second. That's exactly how we handle all money flow state transitions in our ledgers.

SmellTheGlove• 2 years ago

Not the author, but know a little bit about this. You’re describing a payable or receivable, depending on the direction of the funds flow you’re thinking about. You’d have an account for the payable/receivable that should clear. If it doesn’t do that by the expected settlement date, someone or something needs to go look and find out why. The settlement date itself should be predictable based on properties of the submitted transaction and the network/scheme reporting.

lapusta• 2 years ago

Many systems have concepts of booking date & value date https://support.mambu.com/docs/booking-date-vs-value-date

You may also have suspense accounts for certain types of use cases: https://gocardless.com/en-us/guides/posts/what-is-a-suspense...

kfrzcode• 2 years ago

Using Hedera hashgraph would be interesting

hanniabu• 2 years ago

Or just use a blockchain for settlement

jakewins• 2 years ago

This processes three orders of magnitude more transactions per day than ethereum.

What would blockchain possibly be helpful with here?

secondcoming• 2 years ago

Only 5bn events per day? That’s not a lot.

Robin_Message• 2 years ago

Interesting ratios between transactions and events: numbers in the article suggest perhaps 50 million transactions a day which correspond to five billion events. So 100 events per transaction on average, which gives some idea of the complexity involved.

Ledger: Stripe's system for tracking and validating money movement

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