> ## Documentation Index
> Fetch the complete documentation index at: https://docs.cow.bleu.builders/llms.txt
> Use this file to discover all available pages before exploring further.

# Settlement

> Encoding trades, interactions, and prices for CoW Protocol settlement execution

# Settlement

The Settlement module provides tools for encoding trades, interactions, and prices into the format required by the settlement contract.

## SettlementEncoder

The `SettlementEncoder` class serves as the primary interface for building settlement transactions.

### Creating an Encoder

```typescript theme={null}
import { SettlementEncoder, domain } from "@cowprotocol/contracts";

const settlementDomain = domain(1, "0x9008D19f58AAbD9eD0D60971565AA8510560ab41");
const encoder = new SettlementEncoder(settlementDomain);
```

### Trade Encoding

Two methods handle trade encoding:

```typescript theme={null}
// Add a pre-signed order
encoder.encodeTrade(order, signature, { executedAmount });

// Sign and encode in one step
await encoder.signEncodeTrade(order, signer, SigningScheme.EIP712, { executedAmount });
```

The `TradeExecution` interface supports partial fills by specifying executed amounts:

```typescript theme={null}
interface TradeExecution {
  executedAmount: BigNumberish;
}
```

### Interaction Encoding

```typescript theme={null}
encoder.encodeInteraction(
  {
    target: contractAddress,
    value: 0,
    callData: encodedCallData,
  },
  InteractionStage.INTRA // default if omitted
);
```

### Generating Settlement Data

```typescript theme={null}
const settlement = encoder.encodedSettlement({
  [WETH]: ethers.utils.parseEther("2000"), // price of WETH in terms of DAI
  [DAI]: ethers.utils.parseEther("1"),     // price of DAI
});
```

## Trade Flags

Trade flags encode order characteristics into a single bitfield:

```typescript theme={null}
const flags = encodeTradeFlags({
  kind: OrderKind.SELL,
  partiallyFillable: false,
  sellTokenBalance: OrderBalance.ERC20,
  buyTokenBalance: OrderBalance.ERC20,
  signingScheme: SigningScheme.EIP712,
});

const decoded = decodeTradeFlags(flags);
```

## TokenRegistry

The `TokenRegistry` class manages token-to-index mapping, reducing gas costs by referencing tokens by index rather than address:

```typescript theme={null}
const registry = new TokenRegistry();
const wethIndex = registry.index(WETH);
const daiIndex = registry.index(DAI);
```

## Interaction Stages

```typescript theme={null}
enum InteractionStage {
  PRE = 0,   // Before trading (permits, allowances)
  INTRA = 1, // During trading (AMM swaps)
  POST = 2,  // After trading (cleanup)
}
```

## EncodedSettlement

The final output is a tuple containing:

```typescript theme={null}
type EncodedSettlement = [
  string[],         // Token addresses
  BigNumberish[],   // Clearing prices
  Trade[],          // Encoded trades
  Interaction[][],  // [pre, intra, post] interactions
];
```

## Best Practices

* Maintain consistent token ordering for predictable indices
* Use high precision for clearing prices to minimize rounding errors
* Always specify `executedAmount` for partially fillable orders
* Select appropriate interaction stages based on execution timing requirements