PolyFlow Insight: The Next Step Beyond Stripe & Bridge is PayFi

Stripe's acquisition of Bridge, a stablecoin API infrastructure, for $1.1 billion is the largest such acquisition in the history of cryptocurrency. This deal is not just about the size itself, but really highlights the rapid integration of the stablecoin ecosystem into traditional finance.

Stripe and PayPal both have immense global influence and have integrated their existing ecosystems into stablecoin payment rails in their own ways. By incorporating stablecoins, these fintech companies have taken a step forward in the new payment value chain. After integrating stablecoins, the next logical step is to merge DeFi and create the new PayFi paradigm.

1. Stripe & Bridge Acquisition

Founded in 2009, Stripe provides online payment services and offers one-stop payment solutions. Stripe is one of the top three payment giants in the United States. By 2023, its payment volume had reached $1 trillion, supporting over 135 currencies and more than 50 payment methods worldwide.

In 2014, Stripe became the first major payment company to offer Bitcoin payments. However, due to long network confirmation times, high transaction fees, and price volatility, demand couldn't materialize, and this feature was shut down in 2018.

Despite this, Stripe continued its focus and gradually expanded its crypto business. Earlier, on October 10th, Stripe announced the reintroduction of a crypto payment gateway for U.S. businesses, partnering with Metamask, Coinbase, Magic Eden, Audius, and others, allowing U.S. merchants to:

1. Accept USDC and USDP(Crypto Payin) payments via Ethereum, Solana, and Polygon networks from over 150 countries.
2. Receive payouts in stablecoins or USD (Crypto/Fiat payouts).
3. Integrate checkout, element payment components, and payment intent APIs, which will soon be available for subscriptions.

Of course, that’s not all Stripe is after.

(https://x.com/Stablecoin/status/1848390039975469094）

Bridge's latest official announcement states: “Together, Bridge and Stripe will accelerate the adoption and utility of tokenized dollars and, in doing so, make money easier to move, store, and spend for everyone, all around the world … We proved to ourselves and to those outside the company that stablecoins could become core global money movement infrastructure.  This happened not because consumers or businesses inherently want “crypto”, but instead because stablecoins solve critical financial problems.”

Bridge was founded by entrepreneurs Sean Yu and Zach Abrams, and it offers stablecoin API infrastructure to help businesses accept stablecoin payments. The two founders previously sold Venmo competitor Evenly to Block in 2013; Abrams was also a former senior employee at Coinbase.

Bridge’s main product, the Orchestration API, integrates stablecoin payments into existing business operations, handling compliance, regulatory, and technical complexities. Through the Orchestration API, combined with Bridge’s self-developed 1) stablecoin cross-chain transactions, 2) fiat/crypto exchange services, and 3) virtual bank accounts, businesses can have easier access to stablecoin payments for a smoother, more seamless experience. 

Bridge states that its API allows global funds transfer in minutes, seamless stablecoin payments, conversion of local currency to stablecoins, and provides dollar and euro accounts for global consumers and businesses, enabling savings and spending in USD and EUR.

If Bridge can help Stripe build a stablecoin payment network, expand Stripe's ecosystem, and capture the network effects of the entire stablecoin ecosystem, then integrating DeFi to create a new PayFi financial paradigm can further provide Stripe's access to global financial services while achieving freedom of value movement.

2. What is PayFi?

PayFi (Payment Finance) is an innovative application model that combines payment functions with financial services using blockchain and smart contract technology. Its core is to utilize blockchain as the settlement layer, combining the advantages of crypto payments and decentralized finance (DeFi) to promote efficiency and freedom of value movement.

PayFi aims to realize the vision of the Bitcoin whitepaper, creating a peer-to-peer electronic cash payment network without trusted third parties, while fully leveraging DeFi’s advantages to create a new financial market. This includes offering new product experiences, building more complex financial products and application scenarios, and ultimately integrating into a new value chain.

PayFi was first proposed by Solana Foundation Chairwoman Lily Liu at the 2024 Hong Kong Web3 Carnival. She posits that PayFi is constructed around the Time Value of Money (TVM), creating a new financial market that is difficult or impossible to achieve in traditional finance.

In this new PayFi financial market, crypto payments improve traditional finance by offering instant settlements, cost reductions, transparency, and global reach. Combined with DeFi, it enables a decentralized global network with permissionless access, asset ownership, and self sovereignty.

(https://x.com/Polyflow_PayFi）

3. Why Do We Say Stripe & Bridge’s Next Step is PayFi

PayFi further builds, expands, and deepens the crypto payment network. On this basis, through blockchain and smart contract technology, PayFi introduces a new financial market, creating on-chain financial services such as lending, wealth management, and investment, etc on a global basis.

Bridge can help Stripe implement its Pay With Crypto strategy by settling more existing businesses with stablecoins for internal cost reduction, efficiency, and smooth user experience. Additionally, Stripe can establish a stablecoin payment rail beyond traditional banking, card organization, and SWIFT payment systems, extending beyond its ecosystem while remaining DeFi-compatible.

We have seen Bridge helping customers issue stablecoins through its Issuance API and increase capital efficiency by investing balances into U.S. Treasury bonds. We believe it won’t be long before Bridge constructs more PayFi applications based on its stablecoin payments and DeFi.

As a result, with Bridge, Stripe’s capabilities are extended to the entire stablecoin market. Similarly, the PayFi ecosystem constructed with DeFi can overcome geographical limitations of traditional financial services, achieving global value flow and financial inclusion. This is also the direction PayPal, which has issued stablecoins, is striving to drive.

(https://x.com/Polyflow_PayFi）

4. PolyFlow Enables PayFi Applications

Both Stripe and PayPal have extensive global significance, and by integrating existing networks into stablecoin payment rails , connecting with DeFi and constructing new PayFi financial paradigm naturally follow.

PolyFlow, serving as a PayFi infrastructure, helps PayFi applications take off and participate in constructing a global payment network. PolyFlow’s core concept is modular design, using a decentralized approach to ensure transaction processes comply with regulatory standards, eliminate fund custody risks, and connect with the DeFi ecosystem to promote large-scale PayFi application adoption.

PolyFlow has introduced two key components: Payment ID (PID) and Payment Liquidity Pool (PLP):

PID is associated with payment information flow, serving as a powerful tool for user identity verification, compliance access, privacy protection, data sovereignty, AI data processing, and X to earn.

PLP associates with payment funds flow, managed by smart contracts, providing a secure, compliant framework for digital asset value movement, custody, and issuance, while incorporating DeFi’s composability and scalability.

Therefore, PolyFlow builds a business architecture for PayFi applications, with light regulatory compliance, no custody risks, DeFi compatibility, and a secure and compliant framework for digital asset value movement, custody, and issuance.

（https://x.com/Polyflow_PayFi）

PolyFlow’s crypto payment gateway structure offers advantages similar to Stripe & Bridge's integration of stablecoin payments but in a decentralized way:

1. Cost Reduction and Efficiency. Direct peer-to-peer transactions between buyers and sellers, without middlemen making a profit, eliminating fees to banks and card organizations.
2. No Custody Risks. Transaction funds are fully managed on-chain by smart contracts with transparencyremoving centralized institutions'
   inherent custody risks.
3. DeFi Compatibility. On-chain Payment Liquidity Pool allows building PayFi scenarios based on lending, staking, and more.
4. Global Network Reach. It opens up crypto payment options to merchants, accessible to 600 million crypto users worldwide.

As a PayFi infrastructure, PolyFlow integrates the transformative power of cutting-edge blockchain technology, creating a new PayFi protocol. It helps accelerate the adoption of PayFi applications, driving people towards new financial paradigms and unlocking the true value of Web3.

Ultimately, it aims to realize the original vision presented in the Bitcoin whitepaper.