PayPal files patent for NFT Marketplace
Paypal is determined to delve deeper into blockchain technology. After launching its own stablecoin (PYUSD) last month, the FinTech giant is now filing for a patent that aims to create a marketplace for non-fungible tokens (NFTs).
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Patent filed in March
The application outlines a system facilitating on-chain and off-chain transactions concerning NFTs. It was filed back in March but only published on the 21st of September.
The proposed NFT marketplace could potentially transform digital asset transactions. The pending patent illustrates a setup where NFT transactions are executed via a third-party service provider. Though the provider remains unspecified, Ethereum is referenced within the documentation.
PayPal’s initiative aspires to leverage NFTs for varied tokenization purposes, including digital art, music, legal documents, and tickets.
Support for creator royalties, DAOs, and fractionalized NFTs
A highlight of this venture is its ability to support fractionalized purchases. This involves distributing governance tokens which could be traded individually. The system’s adaptability seems promising, with features accommodating decentralized autonomous organizations (DAOs) that can enhance NFT liquidity through a dedicated platform.
Royalties from NFTs present another income avenue, as described in the patent application. The architecture allows for earning revenues from the digital assets, establishing a lucrative proposition for artists and creators.
Versatile system
Moreover, the outlined system would ensure meticulous processing through the third-party service provider. This includes necessary compliance and risk management checks. The versatility extends to users’ ability to have their personal digital wallets, though it’s not mandatory.
As an alternative, a third-party broker could furnish an array of storage and checkout services. Off-chain transactions are slated to be handled within an “omnibus wallet” tied to the service provider, consolidating both buyer and seller’s wallets. As per the application:
“Therefore, no transfer is registered on the blockchain and there is no need to broadcast the transaction to the blockchain network or pay the gas fees associated with such an on-chain transaction.”
Interestingly, the system is designed to be currency agnostic, enabling transactions with any currency. This flexibility stands as a significant advantage, ensuring broader accessibility and ease of transactions across the globe.
Paypal establishes a foothold in the crypto industry
The move is well-timed, especially after PayPal introduced its stablecoin, PayPal USD (PYUSD), back in August. The stablecoin, built on the Ethereum blockchain, showcases the firm’s escalating interest in blockchain technology.
As the patent awaits approval, the fintech community keenly anticipates how PayPal’s venture will shape the evolving narrative around NFTs and blockchain.
