Anyone using Cycles Pay can now deposit funds into our Inflow vaults directly from Arc. The deployments themselves are still managed from the @cosmoshub. And more integrations between Arc and the Hub coming soon!

The Cycles Pay app is available anywhere in the world, and brings together a set of features that you won’t find anywhere else (private transactions combined with a return on your balance, supported by AI account assistants that you can instruct in plain English). All of them will be live on @arc on day one of its mainnet launch (Sep, 16). In parallel to those features, we’re working on a new type of credit product that we intend to launch in LATAM first. Businesses there typically invoice on 30-60 day terms, but many can’t afford to wait that long to get paid, so they go looking for working capital. Banks price loans based on collateral and audited accounts, which a small business often doesn't have. Factoring exists, but it’s only available to a small percentage of businesses that need it (mainly the ones with big-name buyers on the other side). So small businesses are often forced to use informal lending services with high interest rates. Cycles Pay will offer multiple solutions to this. The first is dynamic pricing on invoices, with no lending involved. A supplier issues an invoice with a discount ladder attached, incentivizing the buyer to pay early for a small discount, or get charged a fee for paying late. This helps the supplier get access to working capital faster. The second step is actual credit, powered by Cycles’ graph. Businesses invoice each other via Cycles Pay, and obligations and payment history get tracked in the graph so that loan underwriting can then happen based on activity in the network (instead of collateral and audited accounts).

We’ve just passed our first SOC 2 Type I audit. An external auditor examined our data practices around security, availability, processing integrity, confidentiality, and privacy, and concluded that we met all the requirements. We did it primarily for Cycles Prime, our institutional product. This was an important step in providing assurance to enterprise customers that our system meets all industry standards when it comes to data protection. Cycles Pay (try it today below if you haven’t yet) and Cycles Prime are the first two products built on our general purpose privacy-preserving clearing protocol. But of course, we expect to see many more types of apps built on top of the obligation graph in the near future.

As far as we can tell, Cycles Pay is still the first payment app to offer both fully private transactions and a return on idle funds. Balances are stored in an encrypted state, inside a shielded pool. Every time a payment is made, a ZK proof gets verified to confirm the transaction is valid, and the amount and counterparty stay hidden. In the meantime, idle funds can be moved to vaults that automatically allocate (and frequently rebalance) across popular DeFi protocols like Aave, Morpho, Arcadia, etc. to achieve optimal risk-adjusted returns. Payments can be made straight from vault balances, so there's no withdrawal or unlocking step required before spending.

Hydro is finally home on the Hub. The Hub team was great in supporting us during the migration, enabling some extra CW features to make the migration extra easy for us!

Following the v27.0.0 upgrade, @hydromarkets has migrated to the Cosmos Hub! Hydro is accepting ATOM deposits in its yield-bearing inflow vaults, now executable directly from your ATOM balance on the Hub. Deposit ATOM: hydro.markets/inflow/vaults/… Welcome home, Hydro ⚛️

We’ve started work on the Cycles credit score. The score is built from payment activity in the app. Expense groups that get settled, invoices that get paid to businesses, debts that get repaid, etc. The popular US credit bureaus hold a record of payments that have already happened. Our private graph holds the obligation when it is still outstanding, along with the counterparty on the other side of it, and whether the obligation has been confirmed. That means the protocol can see what someone owes and what they are owed before any credit offer is made, and we can catch things a single lender has no way to see on their own. For example, if the same collateral has been pledged to two different lenders, that will show up in our graph. Both our personal and business accounts will feed into one credit score, which will be helpful for a new business with no transaction history. If the owner is someone who has paid off debts on their personal account, that history will carry into their business account.

The Cycles Pay app will integrate AI agents on @arc Users will be able to connect their Cycles account to the agent, and choose what set of permissions to give it. Permissions can be revoked at any time. The “read” permissions let the agent see balances, invoices, contacts, addresses, and transaction history. The “write” permissions let it queue invoices and payments, but without actually executing them. Users will still authorize the transactions with biometrics. Within those limits, the agent does most of the work: - Draft and edit invoices - Pull up incoming invoices (to see how much is owed and when it’s due) - Answer questions about revenues over a specific time period - Queue a movement of funds between accounts - Tell how much has been earned via DeFi strategies - Schedule reminders and payments - Send notifications when anything happens in an account Cycles agents will be big productivity boosters, without putting funds at risk. They’re currently in private beta, but are coming to the public beta this month.

Cycles Pay will be live on Arc on day one of mainnet, and Arc users (both businesses and individuals) will have a functional payment and invoicing application. But this is just the beginning. The Cycles protocol is a foundation on which a wide range of financial applications can be built using the Cycles graph.

We're working on integrating AI agents in the Cycles Pay app. The first step is to add MCP support so our users can use ChatGPT, Claude, Gemini, etc. to interact with their account. They’ll be able to use natural conversation to perform actions like making payments and sending invoices. For example: "Send a $1000 invoice to finance@bizco.com for consulting services, due August 31st" Because most business payment work is simple and repetitive (make a payment, send an invoice, follow up on ones that are late, etc.), we think agent interaction is where most apps are headed. It allows users to quickly perform multiple actions with a single prompt, by simply describing what they want. Even better, we’ll be able to build agents into Slack, Whatsapp, Telegram, etc. and have them perform that work directly in these apps. This is currently in development, expect to see a beta release soon.

We're excited to be bringing clearing to Arc Testnet. Shortly after launch, payment apps and businesses on Arc are expected to be able to plug their payment obligations into Cycles' shared graph and provide the network with a live view of who owes whom, and how reliably those obligations get settled. All of this privately with ZK proofs. Cycles will become the first on-chain credit bureau using non-DeFi repayment data, and with enough of it, help apps on Arc to assess creditworthiness and extend credit based on real activity. If you’re interested in utilizing Cycles’ credit scores in your Arc app, DM us here on X, or email us at pay@cycles.money.