Chainfeeds Summary:

PayFi is a structural upgrade to the way capital flows. As real-world assets (RWAs) and the deepen their integration, the financial system is transitioning from traditional static institutions to dynamic, programmable systems. Payments are no longer just simple transactions, but a new model with revenue generation, automation, and embedded infrastructure.

Source:

https://x.com/stacy_muur/status/1900153365717234144

Author:

Stacy Muur

Perspective:

Stacy Muur: In the traditional financial system, capital is often trapped in inefficient, slow systems, preventing individuals and businesses from fully utilizing their funds. Delayed settlements, illiquid assets, and rigid credit structures lock capital within the financial system, preventing it from reaching its full potential. addresses this by enabling real-time transactions, automated lending, and instant access to future cash flows, keeping capital fluid and improving the flexibility and efficiency of the financial system. For example, redefines the buy-now-pay-later (BNPL) model, eliminating the need for debt by allowing consumers to pay for purchases through asset collateralization and future cash flow, completely removing interest, late fees, and credit score impacts. For businesses, enables accounts receivable financing (ARF), allowing companies to convert unpaid invoices into available capital, avoiding the need for high-cost loans due to cash flow shortages.

The overall architecture can be understood as a multi-layered financial system, with each layer playing a critical role in ensuring the efficient operation of the payment ecosystem. The first layer is the application layer, which serves as the user-facing interface for payment platforms, lending services, and wallets, such as enabling compliant crypto payments and focusing on cross-border payment optimization. The second layer is the financing layer, responsible for providing liquidity, credit markets, and financial instruments, like allowing borrowing against future cash flows and offering transparent risk assessment models. The third layer is the compliance layer, ensuring the security and legality of capital flows, with tracking blockchain transactions to prevent fraud and providing real-time risk monitoring. The fourth layer is the custody layer, offering institutional-grade digital asset storage solutions, such as for enterprise-level custody and using multi-party computation (MPC) technology to safeguard assets. The fifth layer is the currency layer, supporting the actual payment methods for transactions, including , (Circle and PayPal's stablecoins), to make transactions more reliable. Finally, the sixth layer is the transaction processing layer, the infrastructure responsible for processing and verifying transactions, with and as efficient platforms with competitive transaction speeds and costs.

This comprehensive ecosystem structure ensures that can provide an efficient, secure, and scalable decentralized payment system, accelerating the transformation of the global financial system.