How it works

1. Add a bill

Send an invoice (gasless for the debtor)

The creditor fills in who owes, how much, the currency and what it's for. Setoff builds the IOU and sends it to the debtor's Setoff app: a Memo transaction (a fraction of a cent) that only the named creditor can send. The debtor sees it under Waiting for you on the Bills page, with a badge on Bills and an optional browser notification, and approves it with an EIP-712 signature, which is free and needs no USDC. Nothing is owed until then. There's also a link to share any other way.

If both sides have private notes on, the note is encrypted before it's sent. Declining just hides the invoice for you; nothing changes onchain.

Record what you owe

A debtor can also post an IOU directly. Because the debtor is the sender, no signature is needed.

Both paths go through Arc's Memo contract, so the invoice note is stored onchain alongside the IOU and the dashboard can show it later.

2. Fund your net

Before a cycle, each party's position is simply owed to you − you owe per currency. Only net debtors need to deposit, and only the shortfall. The Wallet page computes it and offers a one-click deposit. Approve and deposit are batched into one transaction through Arc's Multicall3From, which keeps your wallet as the sender.

3. A cycle settles

A solver reads the pool and the deposits, chooses the set of pending IOUs that deposits can fully fund, and calls settle. The contract then:

• checks every IOU is pending and not expired, and marks it settled
• recomputes each party's net position from the stored IOUs (it never trusts the solver's numbers)
• debits each net debtor's deposit and credits each net creditor
• emits the cycle's face value and the liquidity actually used

4. Withdraw

Credits sit in your Setoff balance. Withdraw whenever you like, or leave them in to fund your next cycle. Tokens leave the contract only on withdraw; settlement itself never transfers tokens.

Paying in parts

If you can't cover a whole bill, a cycle can pay part of it, as much as your deposit allows, and the rest stays open for the next cycle. Your bills show the progress (for example "Part paid · 1.50 of 4.00"). A bill is only marked settled once it's paid in full, and no cycle can ever pay more than is owed.

Disputes

If something's wrong with a bill, either side can dispute it. That freezes it: no cycle can pay it. Then each side proposes how much is still owed. As soon as both proposals match, the bill reopens at that amount, or is cancelled if you agree on 0. Anything already paid stays paid.

Credit lines

A business can let a partner it trusts overdraw up to a limit. If that partner is short when a cycle runs, the gap is paid from the lender's own deposit and recorded as owed back to the lender. The partner repays from their Setoff balance whenever they like. The lender can lower the limit, or set it to 0 to stop new draws, at any time.

USDC ↔ EURC netting (opt-in)

Bills are netted per currency, so being owed 10 EURC doesn't help pay 10.70 USDC you owe. If you opt in, a cycle can swap that leftover with another opted-in party whose leftover is the opposite, so neither of you deposits it. You opt in per direction (for example "give up EURC for USDC") with a minimum rate, set on the Wallet page, a little below market.

• The solver matches opted-in parties at a public reference rate (ECB) and skips anyone whose minimum it misses. They stay in their own currency that cycle.
• The contract checks every swap against the account's own minimum, requires what's sold to equal what's bought in each currency, and only converts the leftover, never a deposit.
• Parties who haven't opted in are never converted. Set the minimum to 0 to opt out.

Private notes

Invoice notes can be encrypted so only the debtor and creditor can read them. Each wallet turns this on once from Profile in the account menu (top right), or right in the invoice form: a free signature creates its key, and a tiny transaction publishes the public half through Memo. When both parties have it on, "Keep this note private" is ticked by default.

• What stays private: the note text. It's sealed with X25519 and XChaCha20-Poly1305 (via the audited @noble libraries), with one copy of the key wrapped for each party.
• What stays public: amounts, names and addresses. The contract needs them to check and settle every cycle.
• Your key is never stored. It's derived from your signature each time you unlock, so it lives only in your browser for that session.

Currencies

USDC and EURC net independently. Owing 5 USDC and being owed 5 EURC is still a 5 USDC debt. Converting across currencies through StableFX is on the roadmap.