Cut out any shape from an image. Do this by having your own custom image as the mask for the cutout by setting overlay parameter as your mask image's public ID and chaining a transformation with effect parameter as cut_out and flags parameter as layer_apply (l_<public_id>/e_cut_out,fl_layer_apply in URLs).

Here is the original image:

The following transparent ring was upload to Cloudinary with the 'ring2' public id:

Now you can use this image with the effect parameter as cut_out. For example, when applying it to an image with the sample public id:

The mask image can also be a semi-transparent PNG file to make the edges smoother. Here's an example of an uploaded mask:

And here's a sample result:

An underlay image can be behind the cut out: