PayFi, How Solana Enables the Original Vision of Blockchain: Lily Liu, Solana Foundation

Transcript

[Applause] uh all right sorry for being a little bit late um I hear that uh people are really into punctuality in Switzerland um it's a resident here in zoo I can verify that is indeed the case that and speed limits um okay so uh I'm going to assume that most people here have probably heard about salana uh how many folks here have used salana before yes yes uh last year it was a little bit less uh but we've had a pretty good year in the salon ecosystem uh there there been a lot going on in salana um too much to mention allinone talk so I just wanted to focus today on one thing uh that we're pretty excited about um uh we call it payi and want to talk through that so all right so uh if

you've been on uh crypto Twitter uh you've might have seen over the last number of months uh U campaign we've been running only possible on salana uh and there's been you know really quite a number of things uh that we feel like in the sort of in the ecosystem of decentralized applic s really can only here in 2024 be built using Salon infrastructure uh and it's not just about the hardware Network itself as I'll get to uh it's really sort of about the the the strength and the depth of the ecosystem as a whole so what are some examples of that um these are uh deepin projects centralized physical infrastructure networks you might have used uh Hive mapper before render which is uh centralized GPU resource and then there's also helium mobile which is

really kind of like the the tent pole uh deepin project within the salon ecosystem um decentralized mobile network uh they really kicked off deepin starting around probably last year uh and uh and we've really seen a flourishing of the ecosystem in deepin right so this to me is an example of a vertical that really can only exist in web 3 and can really only exist in a high performance network uh so we're really thrilled that you know something like dpin has been written about in blog posts for a really long time um and like many use cases in blockchain actually I feel like everything's kind of been dreamed about written about because we've had 15 years to think about it all uh and many of these applications are

now really only coming to life on salana so that's deep in uh meme coins right if you're from uh the APAC region you might call them Mimi coins there are 20,000 that are minted every day on salana um I will say when whiff first came to Market I rolled my eyes a little bit I was clearly wrong on that one um and now whiff seems to be here to stay uh and uh and so we've got 20,000 mcoins a day being minted um you know obviously there's a variety in uh in the quality of mcoins I would say uh but you know it is really something where people can directly interact with the chain and can directly have a little bit of fun okay um another uh

project that uh had only exist in blockchain and can really only exist on Salon is something called drip uh because we rolled out State compression last year with drip what you can do now um is you can essentially uh initially what they started off doing was dropping nfts to all of their subscribers whether it's 10,000 100,000 and now many more than that right and that's the type of thing where you can't do that if it's unaffordable uh but you can do that if it is a fraction of a sent to Mint a single nft uh so to me you know high performance is not just about TPS and numbers what it is is it's always about enabling new application spaces uh and that is something that that um that I think we even started to see during the

web 2 era to to uh to use a simple analogy um Netflix when we have when we had 56k modems was mailing DVDs to your doorstep same company today with Advent of bandwidth streaming into every home uh content creation uh at a massive scale and streaming video into your home is it the same company in a way yes but absolutely not in terms of product right uh and another uh another um capability we've been invested in quite a bit is Salon pay um and Salon pay we rolled out a number of years ago uh to allow you to basically Pay merchant checkout with really any SPL token and what we've been thinking about is something called payi

which really extends the concept of payments uh and to me this actually goes back to really the original vision of blockchain so the Bitcoin white paper 15 years ago uh what is the title a peer-to-peer electronic cache system so what the original Vision in my mind of blockchain and of Bitcoin was really originally around first you start with self- custody this is the original Bitcoin Genesis wallet and with self- custody what you have is you have algorithmically mathematically guaranteed digital property rights why is that important well we live in an increasingly digital world where the vast majority of the

things that are valuable in your life actually are digitally represented and ultimately hosted on a server likely hosted by probably big tech company uh way down the value chain okay uh and the further kind of the further Vision that was articulated really in the early days of Bitcoin uh and ethereum really grasped with uh Unis Swap and compound is this idea of programmable money right if uh if money is now basically code uh then uh you can program it smart contracts and with that you can eventually build an open Financial system so you know if you think that metamask is uh maybe not up Tota UI standards I will remind you back in 2017

it was considered a huge upgrade over the Bitcoin Genesis wallet and we've all probably use ether scan and metamask at some point probably done a Unis swap swap at some point so these are uh pretty uh cool initial efforts to build programmable money in an open Financial system with you know an economy of billions and billions right uh so not to take anything away from what we have today uh but the accessibility of this is inherently hampered by just the cost of doing so right on those days when you really need to make a swap it can cost you 800 bucks and the number of people who can afford that uh shrinks dramatically at $800 uh and furthermore uh once you continue to pull on the thread why is

this important because digital property rights are the beginning of having economic sovereignty and econ economic sovereignty is one crucial component of having self- sovereignty um who here has read this book The sovereign individual great I consider this required reading in blockchain it was written in the 9s when I'm not even sure how many people were on AOL and somewhere in the middle of the book he basically has this 25 page Treatise on essentially the blueprint for Bitcoin so a little bit small text but let me read uh some of this out for you um uh new technologies will allow the holders of wealth to bypass the national monopolies

that have issued and regulated money in the modern period uh world's wealth be transcended by mathematical algorithms that have no physical existence cyber money controlled by private markets will supersede Fiat money issued by governments so this is to me the original vision of blockchain um of course we can also build all sorts of different to centralized applications but to me uh what the part the part of the core value proposition of blockchain and decentralized applications is the potential to create new markets new financial markets and to financialized existing markets um okay so uh so with regards to payi um what are three conditions for this to even exist right uh to me there's the first one is

performance right people talk about this a lot scaling uh TPS uh and two simple ways of expressing TPS one is uh finality block time 400 milliseconds another one would be speaking of nfts again uh with State compression it cost about $100 to Mint 1 million nfts comparatively if you take a look at uh some of our other uh networks out there uh it is more than it has many many orders of magnitude and what that means is that at a certain cost profile you can take something uh which is infrastructure that at a high cost infrastructure has to be the application right when it costs dollars to mint mint a pfp or mint an nft it has to be art it

has to be intrinsically valuable itself when you bring the cost of something like an nft as an example down what you do is you take infrastructure uh and you allow it to just be infrastructure to support other applications rather than having to be an application itself okay so second condition Capital liquidity as much as we all love Bitcoin trillion dollar market uh we denominate our lives every day in a medium exchange which is f money no one thinks about coffee in terms of quantity of satoshis right uh so where salana is today transaction volume is number one last week we announced that uh PayPal USD so py USD is being issued on salana as the second

chain and as of the beginning of this year uh the transaction volume is about 2x what you see in other ecosystems um so there's actual Capital liquidity in salana the third is Talent liquidity in terms of developer ecosystems and having an independent developer ecosystem uh there's really two uh that uh that are at scale today one is clearly evm uh and the second that has scale and organic interest in it um at the scale of thousands is salana and that's important because if you're Building decentralized open source networks uh it's about having community of folks who are coming to build a business on it and you know independent developers okay so three conditions performance Capital liquidity

Talent liquidity said more simply uh fast and cheap money people use and developers now today in my opinion if you look at various options in the ecosystem uh there is no other ecosystem that can bring you all three uh there certainly are ecosystems I can give you two out of the three but without the combination of all three it's very difficult to be building uh to be building uh in this case real sort of new Financial Primitives based on a payments layer okay so what is payi isn't this just defi well no it's not because defi if you think about it is all around a buy sell transaction right it's all around a trade and uh

ultimately all around uh some form of you know anywhere between speculative activity and creating price stability in the overall ecosystem but the vast majority of economic activity is really built around uh the transaction for goods and services right not around Buy sell but around send receive and we don't really have any uh new Financial Primitives being built around that I would argue because you can't yet so to me what payi payi is it's about new Financial Primitives that are built around the time value of money okay so let's go through three examples we're all familiar with by now pay later right Clara affirm very large

markets in crypto you do theoretically do something new which is called buy now pay never so uh we always love to talk about buying crypto uh buying coffee with crypto so let's go back to the perennial example uh you paying $5 for a cup of coffee typically the credit card company uh May pay for that on your behalf and you pay back the credit card company and get some you know points and mileage okay great what if instead you could take some amount put it into a lent borrow let's say Camino uh one of our Swiss Hometown projects here and and if you put in 50 bucks or 500 bucks you'll pay off that $5 a little bit faster or a little bit slower and So based on you and what you could basically say is all the interest I'm

getting from my lend borrow programmatically goes back to pay back the $5 of coffee if it takes a little bit longer I'll pay back more over time if it's if it takes If I deposit more it won't be as long and I will end up paying less right so this is an example of a new Financial primitive that you can really only do in blockchain a second example is Creator monetization so if you are a Creator and let's say you've got a million views on YouTube the value of those million views is somewhere around $10,000 obviously a big range but let's say it's $10,000 as a Creator sole proprietor what if they could get a $9,000 advance and stream the $10,000 back to let's call it the credit pool or whoever the Creditor is

over time that's incredibly valuable for the for the Creator because that $9,000 could uh could fund the next video and help that individual build their business even faster right and this is the type of thing where there's already a market for this it's just in the wrapping of a traditional fund that raised $600 million and you've got to be a really significant Creator in order to be able to access a credit line for your creative uh for your creative product right uh and so in my mind with a number of these financial markets what crypto is doing is it's taking the barriers to entry down significantly so you can TR you can transact at a much smaller size transact at a much smaller at a much

smaller transaction size and and you can potentially do things like even an individual video in in the future uh that's also relevant to a third example here the corporate context accounts receivable clearly this is a huge market around the world right AR financing typically it's net 30 payment days if I owe someone $100,000 they may sell that 100,000 receivable to get $95,000 today and whoever is providing that credit May uh agree to that in order to get my $100,000 paid back in 30 days time right and take on the risk of being repaid or not so this is some this is an this is a market that already exists in the billions around the world in so many different corporate context so many so many different commercial uh contexts so

what's unique about something like this well you could potentially do this for a single invoice or you could do this if you're a much smaller uh if you're a much smaller Merchant or supplier and you don't have for example a three-year relationship with audited financial statements with East West Bank right uh so again you know in a number of these situations the demand is there the real world usage if we want to call it that we like that term these days I suppose uh is uh is absolutely there and the value that crypto brings is the ability to uh reveal monetize and organized the longtail market around so many of these different economic transactions where fundamentally there's a time value of

money tradeoff between money today money tomorrow so that's the start of what we call this new category payfi and this is something that applies to so many contexts that we already know today right supply chain Finance payday loans credit cards corporate credit interbank repo markets um and uh so this is just one example of something that we believe is really the original vision of blockchain right uh to take assets put them on chain introduce new ways that people directly interact with one another and uh this is something I believe is only possible on salana today not just because of the network but because of capital liquidity and also Talent liquidity that's it thanks

guys plus do you want to take some questions Lily we have some time so if anybody has a question feel free to ask away yes I ask you you've told us a lot about what's coming next I got a chance to you know one-onone with you a little bit yesterday and your panel as well next um I my quick question is um if you have a crystal ball um and you could zoom into the past the future what would you tell your former 15 years ago what you do now in hindsight and then the second part of the question is what next next um I think uh that's a very broad

question uh I would have started working on salana earlier uh and it did take me a few years to uh get get into the salon Community but honestly I think that's something I would have liked to do earlier I would have never sold Bitcoin no I'm joking but that's probably that probably describes many of us in this room and um uh what would I what would I say um I think that um I think that uh speaking of credit markets you know what happened in 2021 22 that got framed as crypto rugging so many people to the billions and billions of dollars in actuality that were those were traditional Financial Primitives not just Primitives were traditional

Financial mechanisms applied to cryptocurrency right uh so I think as an ecosystem we should have seen through that right I know that the fervor of uh of yield returns and all those types of things at the time uh uh didn't uh didn't compel everyone to be as diligent as they should have but I think that uh we if we ourselves are always talking about sort of the transparency of onchain transactions right the value of self- custody around your data uh your wallet those types of things then I would have wished that we applied that mindset a little bit more uh more transparently to the whole you know credit wrap-up of 2021 2022 any other questions

not yet or no all right okay well L I'm going to give you your tobl on now but you're gonna get double today because you're also part of our next panel discussion Fred do you want to come down and then we can uh mic you up okay thank