Capital-efficient
clearing for trading firms.
Introducing Cycles Prime. Low overhead clearing of trading obligations between firms. No collateral, no central counterparty — just savings.
No Fuss –
Just Savings
No Central Counterparty
Cycles uses a graph flow algorithm to clear obligations in a private manner without a central counterparty.
No Novation of Contracts or Counterparty Substitution
Cycles preserves all existing bilateral relationships, and does not introduce any new relationships. It simply reduces obligations to save you liquidity. At most, an obligation may be reduced to 0.
No Collateral or Escrow of Assets Required
Cycles operates on the obligation graph, prior to final settlement. It does not require access to any assets. It simply provides multilateral balance sheet compression.
Features
Enhanced Privacy and Security
Cycles is a privacy preserving protocol using hardware-based security and zero-knowledge proofs to ensure confidential clearing processes.
Streamlined Reconciliation and Auditability
Customizable journal reports to simplify reconciliation and provide auditable records of all set-offs, reducing operational overhead.
Robust Access Controls
Enterprise-grade user permissions and approval flows minimize human error and ensure secure, compliant operations.
Cycles Prime is powered by the Cycles protocol, a first of its kind open clearing protocol with state-of-the-art privacy and security enabling clearing without the introduction of a central counterparty or the novation of any relationships.
Cycles is the first “shielded-graph” protocol, combining state-of-the-art from privacy-preserving blockchains and Trusted Execution Enclaves. It leverages our highly optimized graph algorithm to provide an approach to settlement focused on reducing working capital costs and risks. Compared to other clearing and settlement solutions, Cycles enjoys the following benefits:
- No central counterparty and no novation of contracts or counterparty substitution.
- No collateral required.
- No escrow of assets or new asset settlement solutions required.
The first version of the Cycles protocol focuses exclusively on the clearing of debts, without introducing any new debts or relationships. It serves primarily as a multilateral vehicle for reducing working capital costs, and both individual and systemic risks arising from the network of obligations. Future versions of Cycles can incorporate assets and credit lines, allowing for highly capital-efficient financial operations beyond the clearing of debts.
How It Works
Step 1:
Record Obligations
Participants enter bilateral obligations throughout the day (via web app or API) to be mutually approved by counterparties.
Step 2:
Multilateral Clearing
At clearing time, Cycles identifies closed loops and nettable positions within a secure, private TEE using ZK proofs.
Step 3:
Receive Set-Offs
Participants receive daily journal and set-off notices – only net balances remain outstanding.
Step 4:
Settle
Any residuals can be settled off-platform via existing rails.
Request an Invite
Cycles Prime is currently available exclusively via an invitation-only pilot for select trading firms. Pilot participants will receive early access, tailored onboarding support, and the opportunity to influence product features.
Frequently Asked Questions
No, Cycles Prime offers purely balance sheet reduction, without the need to post collateral, move assets, or perform asset settlement via Cycles. Cycles reduces the overall amounts owed between participants, leaving final settlement to existing mechanisms.
Obligations require ascertainment (approval via signing) by both counterparties. In the case of an ascertained obligation containing an error, the parties can agree to reverse the obligation. Handling this would be the same as how errors are handled today if one party accidentally made too large or small a payment.
Not all obligations have to be cleared by Cycles. Obligations with different settlement terms can be excluded from Cycles and settled by other means. Simply don’t enter obligations you don’t want to be cleared by Cycles. If a counterparty enters an obligation you don’t want cleared, simply don’t ascertain it.
The initial Cycles pilot is free for participants. Future editions will likely charge a base annual membership fee and/or basis points (or fractions thereof) on amounts cleared. Pilot participants will receive discounted pricing. The cost of participating in Cycles should be more than offset by savings on working capital.
Cycles produces a series of set-off notices representing which obligations should be discharged and by how much. The Cycles algorithm only outputs set-off notices if they form a closed loop, ensuring only obligations that are part of a cyclic structure are cleared. Thus Cycles does not change the net-position of any counterparty, but only the gross obligations. A zero-knowledge proof and a remote attestation from the TEE are produced and verified by the blockchain to provide strong assurance that set-off notices are correct before they are returned. This ensures that clearing produces a correct balance sheet reduction for all parties involved.
Cycles Prime also produces a journal report for each clearing, showing the credits and debits to each obligation for easy accounting reconciliation.
Obligation details are only visible to the creator of the obligation and the counterparty, and within the Trusted Execution Environment. All details about an obligation, including counterparties and amounts, remain encrypted on-chain, and are not visible to other parties, including the service provider. Set-off notices are also encrypted on-chain. Privacy is maintained via a hardware-based Trusted Execution Environment and by using Zero Knowledge Proofs. If an obligation is cleared, this only reveals to the counterparties that there were obligations of at least the amount cleared with other counterparties in the network, but it does not reveal which ones or how many. Each clearing can also include dummy results so that if a party has no clearing it is not revealed.
Cycles Prime can also store internal information such as identifiers in other internal systems or comments that are mapped to on-chain obligations. These are only visible within your organization.