Introduction
Setoff is a clearinghouse for what people owe each other.
Businesses, freelancers and agents record their bills on Arc. Each cycle, Setoff settles every bill at once and only the net difference is paid.
The problem
Companies that trade with each other owe each other money in both directions. Paid one bill at a time, every invoice moves its full amount, and each business has to hold enough cash to cover everything it owes, even when most of it is coming straight back from the same partners.
Banks, card networks and stock exchanges solved this decades ago with netting: add up what each party owes and is owed, cancel the overlap, and settle only the difference. Setoff brings that to anyone with a wallet, as an open contract on Arc.
What Setoff does
- Bills go onchain. A creditor sends an invoice, which shows up in the debtor's app; the debtor approves it with a free signature. Or a debtor records what it owes directly. Each bill carries an amount in USDC or EURC, a deadline and an invoice note.
- You fund only your net. Owe 10 and owed 8? Deposit 2. The app tells you the exact number.
- One cycle settles everything. A solver picks the bills that deposits can cover; the contract recomputes every position and settles them in one atomic transaction.
- Withdraw any time. Whatever you're owed sits in your balance until you take it out.
Also built in
- Partial payments. Short this cycle? It pays what your deposit covers; the rest waits. More
- Disputes. Freeze a bill and settle it by agreeing on what's still owed. More
- Credit lines. Let a trusted partner overdraw from your deposit, up to a limit. More
- USDC ↔ EURC netting. Opt in to swap your leftover in one currency against someone else's in the other, never below your rate. More
- Private notes. Invoice text encrypted so only the two parties can read it. More
- Names. Counterparties show up by their ERC-8004 name instead of an address.
- AI agents. An MCP server gives any agent 14 Setoff tools, with a spending limit. More
At a glance
| Currencies | USDC and EURC, each netted separately |
| Cost | A cycle of 25 bills costs about $0.02 in gas, paid in USDC |
| Speed | Settled and final in under a second once a cycle runs |
| Custody | Funds sit in an open contract with no owner; only you can withdraw yours |