PayPal was a massive innovation in the payments processing industry. The financial brainchild of Peter Thiel, Max Levchin and eventually, Elon Musk aimed far ahead of its time, facilitating instant payments between customers, businesses and more while utilizing the internet.
Solana (SOL) Pay is considered by many to be the next innovation in the payments processing arena, facilitating payments while taking nonfungible tokens (NFTs) and Web3 into account. Some are going so far as to call Solana’s new payment protocol the Visa or PayPal of Web3. This post will break down Solana Pay and how it works so you can decide whether the project is all it’s cracked up to be.
But first, it’s vital to understand Solana before getting into the digital payment platform Solana Pay.
Solana was founded in 2017 by Anatoly Yakovenko, a software engineer with a background at Dropbox and other big tech companies.
Yakovenko believed that while other blockchains are efficient or at least working toward efficiency, many of them fail to factor in time. Instead of every block relying on a standardized clock, each block runs on the local time of their relevant node.
Why is this a problem? Without a standardized clock, transaction timestamps will vary for each block and the time of confirmation is yet another factor that all nodes must validate. The more factors a node has to validate, the slower the transaction time.
On Solana, all nodes run on the same clock, removing one validation factor and speeding up the network as a result. Yakovenko refers to this consensus method as proof-of-history (PoH) — a modified version of proof-of-stake (PoS) that factors in time for verification purposes.
Validation works similar to proof-of-stake in Solana’s case. Solana is just using time as a historical record of proof on top of the proof-of-stake method. As a result, Solana can process an average of 65,000 transactions per second with minimal fees.
SOL is used to transact within the Solana network, to stake for governance purposes and is given as a reward to validators. Otherwise, Solana has its own decentralized exchanges to trade the various tokens built on top of its platform. Every DApp built on Solana is sure to have its own SOL-compatible token, and on-chain decentralized exchanges provide an accessible way to buy said tokens
Now, because Solana’s PoH consensus allows it to process tens of thousands of transactions per second without fees, Solana Labs is building Solana Pay to provide that transaction power to the masses.
History of Solana Pay
While Solana Labs were a big part of the Solana Pay development process, other companies were involved as well. According to Shere, Circle, Checkout.com, Citcon, Phantom, FTX and Slope all played a part in establishing the foundation for the digital payment platform Solana Pay.
Team Circle states that “73% of businesses believe accepting digital payments is fundamental to growth in 2022,” according to a study by Visa. That same study revealed that 59% of those businesses “already are, or plan to, use only digital payments within the next two years.” These statistics were part of the foundation for Solana Pay, as Solana Labs, Circle and their other partners want to be ready for these early adopters. Shere joined Solare Labs in 2021 to work on Solana Pay.
How does Solana Pay work?
Digital payment platform Solana Pay offers businesses and customers immediate, fee-free transactions that allegedly have zero effect on the environment by harnessing the power of the Solana blockchain network. The network claims to support 65,000 transactions per second and provides an easy-to-implement software development kit for businesses to integrate the product.
Developers building DApps on Solana can integrate Solana Pay for easy transactions, just as traditional retailers can implement it if they have a Solana wallet. That accessibility is why many compare Solana to PayPal, stating that Solana can do for crypto payments what PayPal did for traditional online payments.
Of course, Bitcoin (BTC), ETH and other cryptocurrencies claim to provide a near-instant crypto payment, but these networks (especially Ethereum) are costly and not as instant as they might claim. For instance, Bitcoin features an average of seven transactions per second, while Ethereum averages thirteen transactions per second. Both Bitcoin and Ethereum are harmful to the environment as well. Solana’s network is faster and cheaper, which is attractive to businesses and customers.
Solana Pay allows its users to pay in real-time in SOL or any other supported Solana token, such as real-time payments in USD Coin (USDC), without involving a third-party such as a bank or payments processor. Moreover, Solana Pay doesn’t allow for chargebacks, removing a costly issue that traditional merchants often face.
Also ideal for merchants, Solana Pay offers detailed reports on every transaction such as wallet destination, currency type, the transaction amount and text fields for the merchant to describe the said transaction. These details are kept entirely private from the rest of the network, ensuring that both the customer and the merchant can transact without prying eyes.
As the head of payments at Solana Labs, Sheraz Shere, states in his blog post announcing Solana Pay, the Solana team wants the world to look at Solana Pay as something bigger than allowing users to “pay with crypto.” Instead, Shere views Solana Pay as a platform where “all currencies are on-chain and used for a wide range of transactions,” he says.
Disadvantages of Solana Pay
Solana Pay, alongside the Solana network, itself, is in an early stage of development. Businesses who switch over to Solana Pay run the risk of losing their assets due to a programming error or attack on the network, for instance. It’s possible to lose assets due to basic user errors if the business isn’t crypto-knowledgeable, as managing a crypto wallet doesn’t come naturally to everyone.
Also, while Solana is faster than many of its competitors, Ethereum is still a much bigger platform overall. Ethereum has many more DApps and a larger user base than Solana, and Ethereum’s eventual move to Ethereum 2.0 could prove problematic for Solana as well.
Solana Pay for merchants
While Solana Pay might sound complex, integration for merchants is pretty simple. To start, a merchant must establish a Solana wallet, which they can do individually or through the FTX exchange.
From there, the merchant must implement some Solana Pay code into their website and encode their subsequent crypto payment request link into a QR code. Now, customers can pay for goods and services both digitally and in person by simply scanning a QR code within their SOL-supported wallet.
Solana Pay for developers
While Solana Pay has its base use case in offering merchants a way to accept crypto easily, the Solana community can propose changes and present new use cases. Solana Pay’s documentation invites users to open up a Github issue if they want to propose changes and updates.
In his blog post regarding Solana Pay, Shere notes that Solana Pay could facilitate physical and digital transactions via NFTs. His example revolves around buying a pair of shoes. A customer might buy a pair of shoes using Solana Pay, and walk out of the store with two NFTs.
Solana Pay is currently supported in three wallets: Phantom, Crypto Please and FTX. Phantom is a Solana-only wallet for buying, holding, and swapping crypto and NFTs. Crypto Please is another Solana-focused wallet enabling users to send crypto over Telegram, Whatsapp and more. Finally, FTX is an exchange that supports all types of cryptocurrencies including Solana. More wallets that support Solana Pay are coming soon.
Today, Tulip Protocol made the announcement that they have integrated Chainlink Price Feeds in order to better secure their yield aggregating platform that is running on the Solana mainnet. The team had previously stated their intention to integrate Chainlink Price Feeds, and at this point, the connection has been completely put into action. Chainlink is the premier decentralized oracle network in the world, safeguarding tens of billions of dollars in smart contracts. It has diversified its offerings across other blockchains, notably Solana, Fantom, Polygon, BNB Chain, and others.
In a recent blog post, the team behind the Tulip Protocol explained that they had integrated Chainlink to provide users with more confidence that leveraged positions will be liquidated equitably using extremely accurate price data and that the protocol will continue to be completely collateralized at all times.
According to Tomasz Wojewoda, Head of Global Sales at Chainlink Labs:
“We’re pleased that Tulip Protocol has integrated Chainlink Price Feeds on Solana, helping secure its yield aggregation protocol with highly robust, decentralized market data. With the high-throughput performance of Solana and the strong security guarantees of the Chainlink Network, Tulip Protocol is able to empower users with a performant and secure platform.”
Tulip Protocol Seeks To Take Advantage Of Solana
Tulip Protocol brings together lenders who receive a return on their deposits and borrowers who are interested in gaining access to leverage. Users who initiate leverage positions are responsible for maintaining a loan-to-value (LTV) ratio that has been previously established. The Tulip Protocol then uses the asset price data that is provided by Chainlink Price Feeds to verify that this ratio is accurate. If the value of the collateral falls below the threshold that was established by the protocol, then their position will be immediately liquidated to assist in guaranteeing that the lenders will be repaid.
Tulip Protocol intends to capitalize on Solana by giving users the ability to more regularly reinvest their income and grow their assets without having to pay exorbitant amounts of gas expenses. Chainlink oracles can now be natively integrated on Solana, making it possible for Solana-based applications to benefit from enhanced levels of security and transparency. Yesterday, OpenOcean made the announcement that they would be integrating Chainlink Price Feeds in order to help secure the limited order functionality on many chains. These chains include Avalanche, Ethereum, Polygon, Fantom, and BNB Chain.
According to Senx, Co-Founder of Tulip Protocol:
“We’re excited to be using Chainlink Price Feeds on Solana to help secure our yield aggregation platform. By leveraging the most secure and reliable on-chain data available, we’re able to provide our lenders and borrowers with greater assurances that liquidations are based on accurate price data, and the protocol will maintain a healthy loan-to-value ratio through all market conditions.”
Allowing Stakers To Benefit From Higher APYs
Natives of the blockchain as well as newcomers to the technology are beginning to understand that decentralization does not necessarily equate to a secure platform. Given that Web3 services are currently disclosing their susceptibilities to attacks from both within and outside the network, further initiatives should be undertaken to improve the safety of user assets. Fortunately, a growing number of blockchain businesses are beginning to add various levels of security to their services in order to solidify the trust of their existing customers and attract additional investors in the near and distant future.
Tulip Protocol is the very first yield aggregation platform to be built on Solana, and it features auto-compounding vault techniques. The dApp was developed to make use of Solana’s blockchain, which has a low cost and high efficiency, hence enabling the vault techniques to compound frequently. Stakeholders are able to reap the benefits of greater APYs as a result, without the need for active management.
On this week’s episode of “The Market Report,” Cointelegraph’s resident experts discuss the latest updates concerning the recent Solana (SOL) hack.
To kick things off, we broke down the latest news in the markets this week:
Bitcoin realized price bands form key resistance as bulls lose $24K, significant whale activity between $22,000 and $24,800 adds to the complexity of the current spot market setup. Bitcoin (BTC) consolidated lower on Aug. 9 after familiar resistance preserved a multi-month trading range. When will we finally break out of this price range and make the move towards $30K?
Circle freezes blacklisted Tornado Cash smart contract addresses, Crypto data aggregator Dune Analytics said that, on Monday, Circle, the issuer of the USD Coin (USDC) stablecoin, froze over 75,000 USDC worth of funds linked to the 44 Tornado Cash addresses sanctioned by the U.S. Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons (SDN) list. Could this mark the end for Tornado Cash or is there a way they can redeem themselves?
Next up is a new segment called “Quick Crypto Tips,” which aims to give newcomers to the crypto industry quick and easy tips to get the most out of their experience. This week’s tip: Have some funds ready to buy further downturns.
Market expert Marcel Pechman then carefully examines the Bitcoin and Ether (ETH) markets. Are the current market conditions bullish or bearish? What is the outlook for the next few months? Pechman is here to break it down. The experts also go over some markets news to bring you up to date on the latest regarding the top two cryptocurrencies.
After Marcel’s market analysis, our resident experts discuss whether your SOL is safe and the latest updates on the Solana hack. We also discuss why the network has been victim to so many hacks and downtimes. What exactly do these exploits mean for the Solana platform and if you should be worried.
Lastly, we’ve got insights from Cointelegraph Markets Pro, a platform for crypto traders who want to stay one step ahead of the market. The analysts use Cointelegraph Markets Pro to identify two altcoins that stood out this week: Radicle’s RAD and DigiByte’s DGB.
Do you have a question about a coin or topic not covered here? Don’t worry. Join the YouTube chat room, and write your questions there. The person with the most interesting comment or question will be given a 1 month free subscription to markets Pro worth $100!
The Market Report streams live every Tuesday at 12:00 pm ET (4:00 pm UTC), so be sure to head on over to Cointelegraph’s YouTube page and smash those like and subscribe buttons for all our future videos and updates.
Singapore, Singapore , Aug. 09, 2022 (GLOBE NEWSWIRE) — Today, the ZepetoX team (ZTX, ZepetoX.io) announced its foray into the web3 space, sharing its vision to build an open world that empowers creators and communities to build, play and earn.
ZepetoX is the crypto metaverse initiative jointly incubated by ZEPETO – Asia’s largest metaverse platform with over 320 million registered users – alongside leading global blockchain organizations including Jump Crypto.
As the sole blockchain project comprehensively backed by ZEPETO, ZepetoX will have exclusive ties to ZEPETO in terms of IP including technological, design, and content assets as well as bridges to facilitate user onboarding between the two platforms. ZepetoX’s blockchain development efforts will be advised by Jump.
“ZepetoX is our official venture into the blockchain industry. We feel that web3 opportunities should be advanced through a crypto-native approach, which is why we are excited to have Jump as a contributor to developing a new platform that would have exclusive connections to ZEPETO. Overall, we believe that ZepetoX can build the ideal web3 platform to not only bring blockchain to our existing users but also to expand our footprint in the blockchain space through various disruptive initiatives,” said Daewook Kim, CEO of Naver Z – the operating entity of ZEPETO.
“We are excited to support ZepetoX’s efforts aimed at onboarding new audiences into the rapidly growing crypto space. ZEPETO’s expertise and technological know-hows accumulated over the past years from building an immersive social platform will serve as a springboard for ZepetoX,” said Saurabh Sharma, Partner at Jump Crypto.
Building on the Solana network, ZepetoX will offer a web-based 3D open world with varying levels of gamification integrated as well as opportunities for users to monetize via ownership of digital assets and social interaction. Ultimately, ZepetoX aims to empower self-expression through customizable avatars and lands that can be equipped with NFTs from a rich collection of assets created by diverse creators, DAOs, or communities.
“I am thrilled to see IP powerhouses like ZepetoX choosing to build their metaverse on Solana,” said Anatoly Yakovenko, Co-Founder of Solana. “Projects like ZepetoX create new pathways for onboarding millions of users to web3.”
“Our global team brings a depth of crypto native experiences and our goal is to build on the foundation of ZEPETO to spearhead the adoption of blockchain among metaverse users, developers, and creators,” said co-CEO of ZepetoX, Chris Chang.
In the coming months, ZepetoX will launch its first land sale. The lands will be tradable on the ZepetoX marketplace, which will feature a variety of different NFTs as the open world project evolves. Further details on the sale will be available on the ZepetoX website in the coming weeks.
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About ZepetoX: ZepetoX (ZTX) is a web3 company building an immersive content-driven platform for users to create, trade digital assets and enjoy social interaction. Founded in 2022, ZepetoX is the blockchain initiative of ZEPETO, widely regarded as the largest Asia-based metaverse platform boasting over 320 million lifetime users with over 2.5 billion virtual fashion items sold.