PayFi and RWA in My Eyes

I am very fortunate to be able to discuss PayFi today with @calilyliu and @DrPayFi, and we have also branched into stablecoins and RWA. The most direct explanation of PayFi is "Buy now but pay never," which means buying now but never paying.

Essentially, it is about using future earnings to pay for current consumption. To put it simply, it is like a "credit card with no repayments." Of course, the idea of no repayments is a pseudo proposition, but the actual logic does exist.

For example, when we used credit cards in the past, we consumed based on a "credit" mechanism, and credit needs to be repaid by the next settlement date. During the window period, we could use the funds to earn interest, reducing the idle capital.

However, in the PayFi space, it can be reversed. The credit available for payment is based on additional earnings. For instance, the payment system launched by @OKXWallet_CN allows you to earn 5% annual interest by depositing 10,000 USDT or USDC, which amounts to $500 a year, or about $41.1 a month.

Thus, the "no payment" limit provided by OKX Wallet can be $41.1 a month. In simple terms, this means that any consumption within $41.1 is covered by the earnings from the principal, achieving the concept of "Buy now but pay never."

Therefore, I believe that future payments will definitely combine with more staking or earning projects, including U cards. Payment is merely a currency conversion process, but "earning" or "returns" is what distinguishes the rights among different "credit cards." The next track for payments should be in the realm of earning returns.

RWA or RWAFi may be the best way to provide returns. If payment channels collaborate with on-chain brokers, the deposited stablecoins can directly purchase short-term T-Bills, and the expected returns from T-Bills would be the "no payment limit" for the depositors. I believe this track will definitely produce unicorns, and there is a high probability of creating publicly listed companies. Even collateralized lending can utilize the same method.

The future of PayFi should not be solitary, nor just a currency conversion channel, but rather a credit channel with ongoing earnings. The mechanism of on-chain credit may begin to open up from here.

The future of RWA will definitely help Web2 and Web3 users provide higher returns, safer returns, and more convenient payment methods.

In the past, when we were in DeFi, we often said that when you do not know the source of returns, your (funds) are the source of returns. The most stable sources of returns are AA+ or AAA-rated government or corporate bonds, especially during monetary tightening, which is the best opportunity for RWA development.

This tweet is sponsored by @ApeXProtocolCN | Dex With ApeX

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