Multilateral Netting

Beyond Bilateral

Bilateral netting cancels obligations between exactly two parties. Multilateral netting considers the full graph: A's obligation to B can be reduced not only by B's obligation back to A, but by any cycle A participates in, however many hops long.

Net Position

Every domain's net position is the sum of what it is owed minus what it owes, across all counterparties: net(v) = Σ w(u,v) − Σ w(v,u). Multilateral netting guarantees that every domain's net position is preserved exactly through compression — no domain ends up owed more or less than before, only the gross paths connecting domains change.

Epoch Scope

Netting operates within the bounds of a single Netting Epoch (22). Obligations created after an epoch's graph snapshot is locked are not eligible for that epoch's compression pass and roll forward to the next.