> For the complete documentation index, see [llms.txt](https://docs.takapu.org/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.takapu.org/discover/introduction/how-it-works.md).

# How It Works

Follow a quote from the market-making engine to direct settlement.

1. **Price.** A Market Maker's engine produces bid and ask prices with available depth.
2. **Sign.** Its authorized signer signs a Market Frame containing that quote and its version and validity information.
3. **Distribute.** Takapu Protocol distributes signed Market Frames to subscribers as Market Streams.
4. **Select and submit.** An Execution Router selects a quote, simulates execution, and submits the transaction with the selected Frame and execution limits.
5. **Validate and match.** The on-chain protocol checks the executable state and matches the request against the selected Maker's depth.
6. **Settle.** The Maker's settlement handshake completes direct transfers atomically within the transaction.

## From selection to execution

Quote generation, signing, distribution, and Router selection happen off-chain. The submitted transaction performs on-chain validation, matching, and settlement.

A protocol swap explicitly selects one Market Maker. Subscribing to several PropAMMs does not imply that a single protocol swap automatically splits a trade across them.

Explore [Market Frames and Market Streams](https://github.com/Takapu-Labs/takapu-docsite/tree/main/discover/market-frames-and-streams.md) or continue to [execution and settlement](https://github.com/Takapu-Labs/takapu-docsite/tree/main/discover/execution-and-settlement.md).


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