Network effects are usually described as "more users, more value". In settlement, the mechanism is more concrete. More participants mean more offsetting flows, and more offsetting flows mean less money actually has to move. That single dynamic turns a payment network into a flywheel.

The mechanics of netting

Suppose bank A sends €10m through the hub, while participants B and C are due to receive €8.5m. If the flows offset, the hub settles internally and only €1.5m leaves. The same obligations are discharged, but the external settlement — and its cost, time and risk — is a fraction of the gross amount.

Approved operations enter a single order book. Offsetting flows cancel internally, participants settle between themselves instantly, and internal FX handles currency mismatches without sending each leg out to the market. The remainder, whatever is left after netting, is what must be routed externally.

Why density compounds

The benefit scales with the network. With two participants, offsetting opportunities are rare. With many participants across many corridors and currencies, a larger share of gross flow cancels internally. Each new participant increases the probability that someone else's inflow matches your outflow.

That is the flywheel: more participants create more netting; more netting lowers the effective cost of each operation; lower cost attracts more flow; more flow makes the network more valuable to the next participant. The loop is self-reinforcing once it turns.

Routing completes the picture

Netting reduces how much must leave. Routing decides how the remainder travels. AI routing evaluates every available path — hub participants, card networks, local instant payments, SWIFT, stablecoins and agent protocols — by cost, settlement time, reliability and regulatory fit. Together, netting and routing mean the network optimises both the size of the residual and the path it takes.

In short

  • Offsetting flows cancel internally; only the residual leaves the hub.
  • A €10m instruction can leave just €1.5m to settle externally.
  • Internal FX and instant settlement keep offsetting legs inside.
  • Each new participant increases netting opportunities.
  • More netting lowers cost, which attracts more flow.

See the netting and routing design in full at /protocol/.