Gate Research Institute: Bid farewell to dormant funds, how PayFi opens the door to the era of encryption payment profits.

Key Points Summary

• Core Positioning of PayFi: PayFi (Payment Finance) is a systematic payment finance framework that uses stablecoins as the underlying medium, integrating account systems, clearing and settlement, yield management, and compliance layers, aimed at bringing crypto payments into the mainstream and becoming a bridge connecting the Web2 and Web3 worlds.
• Paradigm Shift from Payment to Finance: By introducing the BNPN (Yield Payment) model, PayFi combines payment behavior with capital appreciation, allowing every transaction to generate returns, fundamentally changing the traditional model of 'sleeping funds'.
• Addressing Industry Pain Points: PayFi addresses three major pain points of traditional payments through its architecture: high transaction fees (reducing costs to one-tenth of traditional models through on-chain direct payments), lengthy settlement cycles (achieving T+0 instant settlement), and financial exclusion (enabling access for unbanked populations worldwide through "de-accounting").
• Four Core Business Models: PayFi's business model is multi-layered and progressive, creating revenue and driving growth through four major engines. First, focusing on "low-margin, high-frequency" as the core, it attracts a large number of users by charging extremely low transaction fees, establishing a solid cash flow foundation. Second, PayFi utilizes the capital accumulation generated during the settlement process, investing it in yield-generating stablecoins to create profits for the platform and users, forming a profit flywheel. On this basis, PayFi provides professional financial services, such as institutional-level fund pool management and currency hedging, to obtain higher value income. Finally, PayFi modularizes its core capabilities and outputs them to other enterprises in the form of Infrastructure as a Service (PaaS), achieving ecological expansion and revenue growth.

• Three-Phase Implementation Strategy: The development of PayFi follows a "three-step" strategy: Phase One (within 1 year) focuses on building core cash flow and user base; Phase Two (1-2 years) expands financial services and API capabilities; Phase Three (2-3 years) ultimately aims to become industry infrastructure and achieve ecological empowerment.

• Market Potential: PayFi is targeting a global payment market valued at several hundred trillion dollars. Among these, the digital payment and B2B payment markets are expected to reach a size of $26.53 trillion and $213.28 trillion respectively by 2032. In the segmented track, the market size that PayFi can service is expected to reach as high as $25-30 trillion. With the increasing penetration of crypto payments, in the next 3-5 years, PayFi's Serviceable Obtainable Market (SOM) is expected to reach a transaction size of hundreds of billions of dollars, generating billions of dollars in revenue.

• Opportunities and Challenges: The development of PayFi benefits from the global compliance of stablecoins and the maturity of underlying technologies (such as Layer2 and account abstraction). However, it also faces challenges such as regulatory uncertainty, security risks, and user entry barriers, which need to be addressed through compliance and technological innovation.

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