PayPal explores NFTs with new marketplace patent after launching stablecoins
PayPal, the renowned financial services company, has expressed its interest in the booming world of non-fungible tokens (NFTs) through a recent patent filing with the United States Patent and Trademark Office (USPTO). The filing outlines PayPal’s plans to develop an NFT marketplace that will enable users to buy and sell digital collectibles, such as images, videos, music, event tickets, deeds of personal property, and art.
The patent filing, submitted on September 21, provides detailed descriptions of both on-chain and off-chain NFT transactions. It suggests that PayPal will utilize third-party service providers to facilitate these exchanges. The filing document also mentions the use of an “omnibus wallet” for off-chain transactions, which will store the essential details of the contracting parties’ addresses. This means that no transfer will be registered on the blockchain, eliminating the need to broadcast transactions to the blockchain network or pay associated gas fees.
Although the patent filing does not explicitly specify the service PayPal plans to offer, it makes several references to the Ethereum (ETH) network. This hints at the potential integration of tokenization and the possibility for NFTs on the platform to earn royalties from secondary purchases, expanding the functionalities of NFTs beyond mere collectibles.
Additionally, the proposed NFT marketplace by PayPal aims to support fractionalization. This means that users will be able to own different fractions or pieces of a single digital collectible. Experts believe that fractionalization can enhance the liquidity of an asset while making it more accessible to potential investors.
To address liquidity concerns, the patent filing also includes provisions for a decentralized autonomous organization (DAO) that will ensure satisfactory liquidity levels through a dedicated platform.
PayPal has been steadily exploring Web 3 since 2020, allowing its customers to buy, hold, and sell digital currencies. The launch of PayPal USD (PYUSD), the company’s stablecoin, further demonstrated its foray into the crypto space. However, PYUSD has not gained substantial traction in the market, with its market capitalization standing at less than $50 million, significantly lower than industry leader Tether’s (USDT) market capitalization of $82 billion.
Critics have questioned PayPal’s ability to innovate in the stablecoin sector. Nonetheless, with over 400 million customers, PayPal remains a formidable player in the cryptocurrency ecosystem.
Overall, PayPal’s interest in NFTs through its recent patent filing illustrates its commitment to diving deeper into the blockchain and crypto space. As the NFT market continues to gain popularity and expand beyond traditional collectibles, PayPal’s entry into the sector could bring significant attention and adoption, given its massive user base.
