PayFi concept becomes popular. How can Crypto payment find the entry point for scenarios?

Author: jolestar Source: X, @jolestar

Recently, the concept of PayFi is quite popular. @off_thetarget mentioned PayFi in the AMA of @RoochNetwork the day before yesterday. Due to time constraints, it was not expanded. Here is a brief discussion from two perspectives.

How to find a scene entry point for Crypto payment?

Many articles discussing Crypto payment have imagined that Crypto can be used to enter daily payment scenarios, such as selling Pizza, Coffee, etc. However, since Bitcoin was first used to buy Pizza, so many years have passed, and it can be considered that there is almost no progress in this regard. Because payment is a two-sided market, merchants will wait until the user base is popularized to a certain extent before supporting it, and users will wait until merchants support enough before using it, so cold start is very difficult.

Looking back at the earliest Internet payment, Alipay did not directly support daily payments at the beginning, but provided guarantees and custody for e-commerce payments to solve the trust problem between merchants and users, and payment was only one of the links.

Switching to the Crypto scenario is the same. Transferring money alone cannot solve the problem. A supporting infrastructure is also needed to build a scenario entry point and then embed payment into it. In this regard, Crypto and blockchain themselves have the inherent advantage of trustlessness. For example, in cross-border trade, payment, guarantee, and arbitration processes, if implemented through the law, the economic and time costs are very high, while the smart contract model can greatly reduce costs, and there is no problem of difficulty in ruling and execution.

Therefore, Crypto payment needs to find a suitable scenario entry point and realize Fi in the payment process.

How to play PayFi on Bitcoin?

One ​​of the original visions of Bitcoin was to make payments, but as @myanTokenGeek said, Bitcoin is a decentralized transfer system and does not realize decentralized payment settlement. But if Bitcoin transfers can trigger the execution of smart contracts in another decentralized system, it is possible to achieve this kind of settlement.

This is the idea of ​​Rooch's stacked L2. If L1 transactions are also executed on L2, then L2 smart contracts can be programmed based on L1 transaction events. Rooch's upcoming pre-mainnet Gas purchase is a demonstration of such a scenario.

PayFi's main focus is to create Fi in a programmable way in the payment process, which requires more than just transfers or stablecoins. Through the time locks, multi-signatures, and Scripts provided by Bitcoin, combined with the programmable capabilities in Rooch L2, we can try to build the mortgage, guarantee, and arbitration scenarios mentioned above in the payment process. Developers are welcome to explore together.