PayFi concept goes viral How can Crypto payments find the entry point into the scene?

Author: jolestar Source: X, @jolestar

Recently, the concept of PayFi has been quite popular. The day before yesterday, @RoochNetwork mentioned PayFi in the AMA with @off_thetarget, but due to limited time, it was not elaborated. Here, let’s briefly discuss it from two perspectives.

How does Crypto Payment find its entry point into the scene?

Many articles discussing Crypto payments start by envisioning Crypto entering everyday payment scenarios, such as selling Pizza or Coffee. However, from the first time Bitcoin was used to purchase Pizza to now, many years have passed, and there has been almost no progress in this regard. This is because payment is a two-sided market; merchants will wait for the user base to reach a certain level before supporting it, and users will wait for enough merchant support before using it. Therefore, it is very difficult for a cold start.

Looking back at the earliest internet payments, Alipay did not directly support daily payments at first, but provided guarantee and escrow services for e-commerce payments, solving the trust issue between merchants and users, with payment being just one part of it.

Switching to the Crypto scene is the same, just transferring money cannot solve the problem, and there is also a need for supporting infrastructure to build the scene entry point, and then embed the payment into it. In this respect, Crypto and Blockchains themselves have the inherent advantage of Trustless, such as cross-border trade, payments, guarantees, arbitration processes, which, if implemented through legal means, would incur high economic and time costs, while the Smart Contract mode can significantly drop costs and eliminate the difficulty of executing judgments.

So Crypto payments need to find the right entry point in the scene and implement Fi in the payment process.

How to play PayFi on Bitcoin?

One of Bitcoin’s original visions was to be used for payments, but as @myanTokenGeek pointed out, Bitcoin is a Decentralization transfer system and has not achieved Decentralization Settlement for payments. However, if Bitcoin transfers can trigger the execution of a Smart Contract in another Decentralization system, this type of Settlement may be possible.

This is the stacked L2 idea of Rooch, if the transactions on L1 will also be executed on L2 at the same time, then the Smart Contract on L2 can be programmed based on the transaction events on L1. The Gas purchase of the upcoming pre-mainnet release of Rooch is a demonstration of this scenario.

PayFi’s main focus is to create Fi through Programmability in the payment process, which requires more than just transfers or stablecoins. By leveraging Bitcoin’s time locks, multi-signatures, Scripts, and the Programmability capabilities in Rooch L2, it is possible to explore scenarios such as collateral, guarantee, and arbitration in the mentioned payment process. Developers are welcome to explore together.