One of the outcomes of Pay Protocol’s system is deemed to be providing a solution to cryptocurrency’s volatility, namely by handling various currencies such as Bitcoin (BTC), Ethereum (ETH), and other projects’ tokens and stable coins. Pay Protocol is a blockchain-based subsidiary established by Danal, one of the largest payment processors in South Korea. The combination of Danal’s industry-leading experience and blockchain technology is expected to create an innovative blockchain payment platform. Pay Protocol is planning to launch its main net in the fourth quarter of this year, and the company’s offline and online payment service is scheduled to open in South Korea next year, in the first quarter. Pay Protocol’s platform is especially noteworthy as it not only has faster processing speed and lower fee than the existing services, but it also solves the problem of volatility that others are struggling to solve.
Many will agree that the biggest problem in the cryptocurrency industry is volatility. Although stable coins have been proposed as a solution in many blockchain and cryptocurrency projects, stable coins are only ideal theoretically. First, they are very vulnerable to speculative attacks. A stable coin’s price is stabilized by pegging it to an asset with relatively low volatility, such as fiat currency or Ethereum. Unfortunately, if the buy or sell amount exceeds the total amount of fixed assets, it will be difficult to maintain the stable coin’s price. As a result, using stable coins to capture volatility is risky. Second, in order to use stable coins worldwide, we need stable coins that correspond to the fiat currency of each country. This means that a single independent solution must be formed to maintain the world’s monetary economy. To use a stable coin, a central system must provide the exchange rate between each stable coin and the fiat currency associated with it, not to mention that there has to be a cryptocurrency for pegging. In reality, it is almost impossible to create and manage fiat currencies solely for the purpose of making stable coins.
To solve the problem of volatility, Pay Protocol takes a different approach from other blockchain projects. Rather than focusing on stabilizing volatility, Pay Protocol focuses on the dissemination of various payment solutions and the expansion of user experience. Other than the platform’s own token, Pay, currencies including BTC, ETH, Stellar Lumen, OmiseGO, USTD, and stable coins can be used within Pay Protocol’s ecosystem. In addition, Pay Protocol provides sellers and buyers with the choice of using their wanted currency. The platform will support a wide variety of cryptocurrencies currently in the market. Customers purchase products and services using Pay tokens, and by doing so, will also receive Pay tokens back as rewards. Merchants, on the other hand, use Pay tokens to receive useful benefits such as low fees and shorter settlement schedules.
When customers use Pay tokens, they can benefit from a variety of discounts and promotions. Pay Protocol’s fees are significantly lower than those of existing payment providers. The margin gained from such lowered fee goes to customers and merchants in the form of discounts and promotions. Compared to other payment services, customers can purchase the same services and products at a lower cost. In addition, they can use most cryptocurrencies through Pay Protocol’s wallet application. Merchants get access to different third party services other than promotional tools, and can receive additional benefits in return for providing their transaction data. By providing their own wallet as well as integrating other third party wallets, Pay Protocol will allow the users to use the platform without having to install wallets separately.
It seems that Pay Protocol will solve the problem of volatility in their own unique way. The company has recently participated in major conferences, including Upbit Developer’s Conference, creating synergies with major domestic and overseas companies such as Terra and GIFTO. Pay Protocol, which is constantly working to develop and improvise the platform, is expected to bring innovative solutions, technologies, and infrastructures.
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