PayPal, the fintech giant, has filed a patent to build a non-fungible token marketplace, doubling down on the next iteration of the internet. The patent, filed in March of this year and published on September 21st, features a several proposed innovations and a structure that will allow for the buying and selling of NFTs on- and off-chain. Among the innovations are:
- Wallet accessibility through biometric and identity data
- Group buying and distribution of non-fungible tokens
- The buying and selling of NFTs that are fractionalized
- The use of distributed governance tokens
- Partnerships between DAOs and third-party service providers
The language in the patent reveals the (large) extent of PayPal’s plans. In it, the company describes NFTs as “any unique piece of digital data that can be tracked using a decentralized blockchain ledger.” Some of the examples PayPal cites are digital images and videos, music, collectibles, art, and other items more associated with the real world — deeds to personal property, event tickets, and legal documents.
In PayPal’s proposed NFT marketplace, there would be many parts: the users themselves, the blockchain network, servers, and even Internet of Things devices.
An omnibus wallet would handle any transactions users would want to make off-chain, thereby reducing gas fees. According to the patent filing, any cryptocurrency could be used on the network.
Users would not necessarily need their own self-custodial wallets to participate. If they wished, they could rely on a third-party service provider to store their NFTs. The third-party provider would also help with check-out services but would need to be subjected to compliance and risk management procedures.
PayPal recently made news in the Web3 space for the launch of its stablecoin, PayPal USD, which it debuted on the Ethereum blockchain. The patent filing is a bullish sign from the company towards Web3 and indicative of the innovation occurring in the space even during the bear market.
PayPal Makes Web3 News in Bear Market
While the bear market has taken a toll on the Web3 community’s sentiment, there may never have been a more optimistic time for the space. Every week it seems, more and more mainstream companies are adopting crypto, and that includes PayPal. Here are three stories involving it in the past 10 months.
First, two weeks ago, PayPal introduced Web3 off-ramps for users and merchants. Now, users who have transactions on certain wallets, decentralized applications, and NFT marketplaces can use PayPal’s technology to move their cryptocurrency to fiat and then directly into their bank accounts.
Next, in August, PayPal launched its stablecoin, PayPal USD or PYUSD. The stablecoin is pegged to the U.S. dollar and is backed 1:1 by reserves. The move was another indication of the enthusiasm the company has for the Web3 space and underscores its belief that cryptocurrency is here to stay.
Lastly, 10 months ago, PayPal teamed up with MetaMask, the world’s most popular hot wallet, for a crypto integration. Now, users can buy Ethereum with their PayPal balance, a debit card, or a credit card, and more cryptocurrencies will follow. It was the beginning of the company’s big 2023 Web3 push.
PayPal betting big on Web3 is bullish news for the space, and its innovative NFT marketplace could introduce a new player into the NFT marketplace games. That is good news as well, as competition generally benefits the end-users.