LedgerLoops
Decentralized peer-to-peer obligation clearing network for invoices and receipts between ledgers.
Website: https://ledgerloops.com/
Cover Block
PUBLIC
| Field | Value |
|---|---|
| Name | LedgerLoops |
| Tagline | Decentralized peer-to-peer obligation clearing network for invoices and receipts between ledgers |
| Founded | 2016 (rebooted from a 2011 OpenTabs proposal) [LedgerLoops] |
| Business Model | B2B |
| Industry | Fintech |
| Technology | Blockchain / Web3, distributed ledger primitives |
| Founder | Michiel de Jong [LinkedIn] |
Links
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- Website: https://ledgerloops.com/
- GitHub: https://github.com/ledgerloops
- Founder LinkedIn (Michiel de Jong): https://www.linkedin.com/in/michielbdejong/
- Whitepaper (PDF): https://ledgerloops.com/doc/whitepaper.pdf
Executive Summary
PUBLIC
LedgerLoops is a long-running open-source effort to build a peer-to-peer obligation clearing network that lets businesses settle invoices and receipts between independent ledgers without moving cash [LedgerLoops]. The project traces back to a 2011 post on the Unhosted mailing list proposing an IOU-centric e-invoicing protocol, and was renamed from OpenTabs to LedgerLoops in the fall of 2016 after a loop-resolution algorithm ("challenge and trigger") was added [LedgerLoops]. The technical premise: when a chain of mutual debts forms a loop across counterparties, the loop can be detected and cleared, reducing the working capital each party needs to keep on hand [LedgerLoops whitepaper]. Founder Michiel de Jong, who has previously worked on web standards and decentralized data (Unhosted, Remote Storage), continues to publish on the topic, including a recent retrospective titled "Network Ledger Technology: The First 15 Years" [LinkedIn]. The project remains bootstrapped, with no confirmed institutional funding rounds and no reported revenue [GetLatka]. Over the next 12 to 18 months, the question worth tracking is whether LedgerLoops can convert its protocol work into a referenceable pilot with a mutual-credit network, an e-invoicing consortium, or a grant-funded research deployment, since commercial traction in the public record is, at present, limited.
Data Accuracy: YELLOW -- Confirmed via LedgerLoops primary sources and founder LinkedIn; commercial metrics are sparse.
Taxonomy Snapshot
| Axis | Value |
|---|---|
| Business Model | B2B protocol / open-source |
| Industry / Vertical | Fintech, e-invoicing, mutual credit |
| Technology Type | Distributed ledger, loop-detection algorithms |
| Founding Team | Solo technical founder (Michiel de Jong) |
| Funding | Bootstrapped; no disclosed institutional rounds |
Company Overview
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LedgerLoops began as a research and standards-adjacent project rather than a venture-backed startup, and that origin still shapes how it shows up in the public record. According to the project's own "Initiation" page, the seed idea was a simple IOU-centric e-invoicing protocol proposed in a 2011 post to the Unhosted mailing list, followed by several years of post-capitalism discussion about how the system could be used between individuals and organizations [LedgerLoops]. In the fall of 2016, a loop-resolution algorithm referred to as "challenge and trigger" (described in a piece called Whispering Merchants) was added, and the project was renamed from OpenTabs to LedgerLoops to avoid a name clash [LedgerLoops].
The founder, Michiel de Jong, describes the 2016 reboot in his own words: "In 2016 I rebooted the OpenTabs project under the name LedgerLoops, and included a more detailed (but unfinished) distributed loop detection algorithm, and an implementation of debt loop resolution using circular hashlock transactions" [LinkedIn]. His public profile lists Arnhem, Netherlands as his location, which is the closest publicly available signal of where the work is being done [LinkedIn]. A formal company headquarters is not publicly disclosed.
Milestones in the public timeline are modest but coherent: 2011 protocol proposal, 2016 rename and algorithm addition, ongoing GitHub activity across repositories including ledgerloops, snap-checker, nlt-kit, and the whitepaper repo [GitHub], and a 2024-era retrospective post by the founder framing the work as "Network Ledger Technology: The First 15 Years" [LinkedIn]. Readers should also be aware that an unrelated entity, LedgerLoop AI (ledgerloop.ai), and a separate site at ledgerloop.us appear in search results; these should not be confused with LedgerLoops the obligation-clearing project [GetLatka].
Data Accuracy: YELLOW -- Founding chronology corroborated by LedgerLoops site and founder's LinkedIn essay; legal entity and HQ not in the public record.
Product and Technology
MIXED
The core product proposition, as stated on the company's site, is that LedgerLoops "enables businesses to settle transactions without cash, enhancing cash flow and efficiency in peer-to-peer networks" [LedgerLoops whitepaper] [PUBLIC]. The user-facing framing on the homepage is that the system is "designed for those who frequently do business with each other" and works "like having a secret handshake that lets you settle your accounts automatically" [LedgerLoops] [PUBLIC]. In plain language: if Company A owes B, B owes C, and C owes A, the loop can be detected and the three obligations cancelled or reduced without any party wiring funds.
Under the hood, the public artifacts point to several building blocks. The whitepaper repository and the main ledgerloops.com repository describe a distributed loop-detection approach, and the founder's own retrospective references "circular hashlock transactions" as the settlement primitive, an approach conceptually adjacent to hash-time-locked contracts used in payment-channel networks [LinkedIn] [PUBLIC]. Companion repositories on GitHub, including snap-checker ("Network Ledger, based on ledgerloops-0.8 messages over Hubbie") and nlt-kit ("Everything needed to experiment with Network Ledger Technology"), suggest the project is structured as a protocol plus reference tooling rather than a hosted SaaS product [GitHub] [PUBLIC].
What the public record does not yet show is a productized, hosted offering with onboarding, SLAs, or a customer-facing dashboard. The product claims about cash-flow benefits are presently sourced to the project's own whitepaper and site, with no independent customer case study captured in the research pass [LedgerLoops whitepaper] [PUBLIC]. Investors evaluating the project should treat it today as protocol-and-reference-implementation stage, with the commercial wrapper (entity, pricing, support, integrations with accounting systems) still to be demonstrated.
Data Accuracy: YELLOW -- Product description sourced to primary site and GitHub; absence of third-party validation noted.
Market Research and Opportunity
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The market that LedgerLoops addresses, business-to-business obligation clearing and the working-capital drag that trade credit creates, is large, old, and structurally inefficient, which is precisely why the category attracts repeated attempts at reinvention. Globally, e-invoicing mandates (EU ViDA, Peppol expansion, country-level mandates in Italy, Poland, France, and others) are pushing structured invoice data onto shared rails, which in turn creates the data substrate that loop-clearing networks need to function. The cited research pass did not surface a named third-party TAM figure specific to obligation clearing, so any sizing here would be analogous rather than direct.
Demand drivers worth flagging: persistently high short-term interest rates have made working capital expensive again, which raises the value of any mechanism that reduces the cash float businesses must hold to pay suppliers; the spread of structured e-invoicing mandates lowers the integration cost of any clearing layer that sits on top; and the renewed interest in mutual-credit and community-currency networks (Sardex in Sardinia is the canonical reference) demonstrates that multilateral set-off can produce real economic activity at regional scale.
Adjacent and substitute markets matter for sizing the realistic prize. Supply-chain finance and dynamic discounting platforms (Taulia, C2FO, Kyriba) already address the working-capital problem from a different angle, by injecting third-party capital rather than netting obligations. Mutual-credit cooperatives and barter-style B2B networks address it via community membership. Accounts-payable automation suites (Bill.com, Coupa, Tipalt) own the system-of-record relationship that any clearing protocol would ultimately need to plug into. LedgerLoops sits in the netting-and-clearing slice of that stack, which is the slice with the least incumbent dominance and arguably the most protocol-shaped opportunity.
Regulatory and macro forces cut both ways. Mandated e-invoicing is a tailwind because it standardizes the input data. Banking and payments regulation, in contrast, is a headwind: any system that looks like it is creating, transferring, or extinguishing financial obligations at scale will draw scrutiny from financial regulators, particularly in the EU where the project's founder is based. The successful precedents (Sardex, WIR Bank in Switzerland) navigated this by being explicitly community or cooperative structures rather than for-profit financial intermediaries.
| Sizing reference | Figure | Note |
|---|---|---|
| LedgerLoops reported revenue (trailing year) | $0 | Bootstrapped per [GetLatka] |
| Confirmed third-party TAM for obligation clearing | Not publicly available | No named report surfaced in research |
Analyst takeaway: the addressable problem is real and well-understood, but the public evidence base for LedgerLoops's slice of it is thin enough that any market-size claim must be treated as analogous rather than measured.
Data Accuracy: ORANGE -- Market context is reasoned from public knowledge of e-invoicing and mutual credit; no LedgerLoops-specific third-party TAM was captured.
Competitive Landscape
MIXED
LedgerLoops is positioned not against a single named startup but against a set of older, structurally different approaches to the same underlying problem of unpaid invoices and trapped working capital. The structured facts list no named direct competitors, so the comparison here is drawn as prose using publicly known reference points in adjacent categories.
The segment-by-segment map looks like this. In multilateral mutual credit and community currency, the established references are Sardex (Sardinia, founded 2009) and the much older WIR Bank (Switzerland, founded 1934); both run closed, membership-based networks that periodically net member balances. Cyclos, a Dutch software platform, has powered many community-currency deployments. These systems prove the economic concept that LedgerLoops is built on, but they are operated as institutions rather than as open protocols. In supply-chain finance and dynamic discounting, Taulia (acquired by SAP), C2FO, and Kyriba address the same working-capital pain by mobilizing third-party capital to pay suppliers early; they are well-funded and embedded in enterprise ERPs. In AP/AR automation, Bill.com, Coupa, and Tipalti own the system-of-record relationship with mid-market finance teams. In crypto-native payment netting, the Lightning Network and various stablecoin rails have demonstrated hash-locked, multi-hop settlement primitives technically similar to what LedgerLoops describes, though aimed at different users.
Where LedgerLoops has a defensible edge today is narrow but real: it is one of the few publicly documented attempts to apply distributed loop-detection algorithms to ordinary B2B invoices rather than to crypto payments, and the founder has accumulated more than a decade of design work and writing on the specific problem [LinkedIn]. That depth of thinking is a moat against casual entrants and is the kind of thing standards bodies and grant funders take seriously. The edge is, however, perishable in the absence of either a deployed network or a partnership with an existing mutual-credit operator that could provide instant volume.
Where the project is most exposed is on commercial wrapping. Sardex has members, contracts, and a payments license posture; Taulia has SAP's distribution; Bill.com has the SMB accountant channel. LedgerLoops, as of the public record, has none of these. The most plausible 18-month scenario therefore looks like this: winner if LedgerLoops secures a research grant (NLnet and the Interledger Foundation are the obvious candidates given the founder's background) and a single named pilot with a mutual-credit network or e-invoicing consortium, which would convert the protocol into a referenceable deployment; loser if the open-source activity continues without a commercial counterparty, in which case the technical work risks being absorbed into a better-funded incumbent's roadmap rather than becoming the standard itself.
Data Accuracy: ORANGE -- Competitor set is contextual rather than drawn from the structured facts; treat as analyst framing rather than verified head-to-head comparison.
Opportunity
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The size of the prize, if LedgerLoops executes, is to become the open-protocol layer for multilateral obligation netting between businesses, the way SMTP became the open layer for email and Interledger aspires to be for payments.
The headline opportunity. The largest plausible outcome is that LedgerLoops, or a successor protocol built on its design work, becomes the default open standard that mutual-credit networks, e-invoicing platforms, and AP/AR systems use to detect and clear loops of mutual obligation across organizational boundaries. The reason this outcome is reachable rather than purely aspirational is that the underlying economic problem (trapped working capital inside circular trade-credit chains) is universal, structured invoice data is finally becoming standardized via mandates, and the founder has produced more than a decade of public design work and reference code on exactly this problem [LinkedIn] [GitHub]. Protocols of this shape rarely emerge from incumbents because incumbents have no incentive to make balances portable across systems.
Growth scenarios.
| Scenario | What happens | Catalyst | Why it's plausible |
|---|---|---|---|
| Grant-funded standard | LedgerLoops becomes the reference implementation for a research-funded obligation-clearing standard | NLnet or Interledger Foundation grant plus academic adoption | Founder's prior work in the Unhosted / Remote Storage standards community gives credibility in this funder pool [LinkedIn] |
| Mutual-credit upgrade | An established mutual-credit network adopts LedgerLoops's loop-detection algorithm to replace internal netting code | Pilot with a Sardex-style cooperative or a Cyclos deployment | The protocol is explicitly designed for "those who frequently do business with each other" [LedgerLoops] |
| Embedded clearing layer | An e-invoicing or AP automation vendor embeds LedgerLoops to offer cash-free settlement as a feature | Commercial partnership with a Peppol-connected provider | EU e-invoicing mandates create the structured data the protocol requires |
What compounding looks like. Obligation-clearing networks exhibit a strong network effect: every additional participant increases the probability that any given invoice can be resolved through a loop rather than a cash payment, which in turn increases the value of joining for the next participant. The compounding is multiplicative rather than additive, and it is the reason historical mutual-credit networks have tended to either reach critical mass within a region or fail entirely. A protocol approach, as opposed to a single-operator network, has a chance at compounding across operators rather than within one.
The size of the win. A direct public-comparable market cap is not appropriate here because the closest analogs are either private cooperatives (Sardex) or much broader payments protocols. As a scenario, not a forecast: if LedgerLoops were to occupy the role of "open clearing standard adopted by a meaningful share of e-invoicing and mutual-credit deployments", the value would accrue less to a single equity holder and more to the ecosystem and to whichever commercial entity ends up offering the dominant managed service on top of the protocol. Investors should size the opportunity as a potential platform position with modest direct monetization and significant strategic option value, rather than as a conventional SaaS revenue ramp.
Data Accuracy: ORANGE -- Scenarios are analyst constructions grounded in cited primary sources; no commercial traction is yet on the public record.
Sources
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[LedgerLoops] Ledger Loops - Peer to Peer Obligation Clearing | https://ledgerloops.com/
[LedgerLoops] Ledgerloops Whitepaper (PDF) | https://ledgerloops.com/doc/whitepaper.pdf
[LedgerLoops] Realization | https://ledgerloops.com/realization
[LedgerLoops] Description | https://ledgerloops.com/description
[LedgerLoops] Initiation | https://ledgerloops.com/initiation
[LedgerLoops] Activation | https://ledgerloops.com/activation
[LedgerLoops] Contact | https://ledgerloops.com/contact
[GitHub] LedgerLoops organization | https://github.com/ledgerloops
[GitHub] ledgerloops/ledgerloops-whitepaper | https://github.com/ledgerloops/ledgerloops-whitepaper
[GitHub] ledgerloops/nlt-kit | https://github.com/ledgerloops/nlt-kit
[GitHub] ledgerloops/snap-checker | https://github.com/ledgerloops/snap-checker
[GitHub] A Revolution in Network Money (issue 83) | https://github.com/ledgerloops/ledgerloops.com/issues/83
[LinkedIn] Michiel de Jong profile | https://www.linkedin.com/in/michielbdejong/
[LinkedIn] Network Ledger Technology: The First 15 Years (Michiel de Jong) | https://www.linkedin.com/pulse/network-ledger-technology-first-15-years-michiel-de-jong
[michielbdejong.com] Network Ledger Technology: The First 15 Years | https://michielbdejong.com/blog/21.html
[GetLatka] LedgerLoop AI revenue and team profile (separate entity, referenced for disambiguation) | https://getlatka.com/companies/ledgerloop.ai
Articles about LedgerLoops
- LedgerLoops Wants Two Trading Partners to Settle an Invoice Without Moving Cash — Michiel de Jong's 15-year project turns IOUs between frequent counterparties into a clearing loop. Adoption is the open question.