Some definitely unexpected old school fintech goes native crypto came across my desk this last week. Here’s two of them!
Visa on Chain
Ever had trouble paying your gas fees on an eth contract? Worried about having to top up your chain balance or getting priced out in the next run-up by base layer asset fees?
Worry no more!
VISA’s crypto team is pioneering a first in class solution to this problem: pay for it with your credit card!
That’s right folks. When paying for it with your credit card wasn’t an option, we’d love for you to basically pull the card out and get an auto-extension on your ability to pay fees right away!
Sarcasm and some general bafflement aside, this is actually a pretty cool architecture and some interesting thinking about how credit card companies are thinking that their services (access to credit!) are going to be needed in the future.
Here’s how they’re proposing to make this work.
VISA opens a contract on chain that’s got funds in it. This contract acts as a service to help sponsor your transactions to get into the chain. The contract holds eth that you can buy the usage of via your credit card, with your trad-fi credit account.
Your wallet natively negotiates with the VISA card network (re-named a Paymaster) who gives you a token via a digital signature that you can now present to the VISA contract on-chain that’s got native eth gas available to use on your behalf.
If degen-ing into the next NFT round is on your todo list and you’re worried about needing a flexible spending account and access to easy credit to bolster your ability to make a payment, VISA’s paymaster setup may be for you!
Definitely find it interesting to see how the credit card major is thinking about where they can provide value in an increasingly digital ecosystem.
Paypal launches a shitcoin, PYUSD
Paypal announced the launch of their own stablecoin, PYUSD. Basically it’s an eth ERC20 that lets them own their own accounts on ethereum. I’m not really sure how this works for them or their users, but I’m guessing in theory it means you’d be able to, at some point, pay out to other people via the eth rails instead of using PayPal’s partner rails.
This seems kind of puzzling until you realize that PayPal relies on other people’s rails to make the majority of its payments — most people aren’t paying other users but they are paying external parties. And typically using credit cards to do it.
Credit cards cost money; PayPal’s early history was one of almost not making it because they were tossing investor money toward the 3% interchange fees they were eating on every PayPal transfer that used a card (almost all of them).
I’m not sure what percentage of PayPal costs go to covering card fees but I wouldn’t be surprised if they’re non-zero.
Adding another rail, but one that they sort of own, to their arsenal seems like a puzzling move to an outsider, but a pretty clever one to an insider.
It’ll be interesting to see how much traction this gets. Will they be able to convince people that PYUSD is as good as Shiba Inu? To be determined.
Kinda explains why VISA might be looking for new revenue opportunities though.
Alright! That’s all I’ve got! Stay shitty my coiner friends,
~nifty
PS: Want to learn more about Taproot, Schnorr, FROST, and MuSig2? Come take Base58’s first ever in-person Taproot class in Atlanta at the Atlanta BitDevs this coming Sept 4-5th (it’s Memorial day, make some deep rooted memories!)
Applications for class due Aug 28th!