According to one of the four patent applications, which were filed on March 21, 2022, but only made public on September 21, the system enables “off-chain transaction via an NFT marketplace,” and will allow users to transfer NFTs in their possession to other users on the PayPal.
Going forward, a decentralized autonomous organization tied to the service provider might be leveraged to enhance NFT liquidity on a dedicated platform.
In addition, fractionalized NFT purchases could also be a possibility of PayPal’s proposed NFT ecosystem described in the patent application.
Selection of Validators in Decentralized Cryptographic Network
In an another patent, PayPal pending patent mentions how validators or miners should be selected during the process of adding transactions to the blockchain. The document states that the company’s disclosed techniques could “advantageously allow steering of blockchain requests to a desired subset of miners/validators.”
The third patent filed by PayPal delves into the concept of a so-called omniverse, which in this context suggests a product that deals in multiple metaverses. PayPal says it developed an “online transaction processor” that would provide recommendations for which digital assets a user should buy based on the user’s blockchain preferences and which metaverses they interact with most.
In early August, PayPal also announced its new dollar-backed stablecoin, PayPal USD ($PYUSD), which marked the first time a major U.S. financial company created this type of digital asset.
Later in the same month, PayPal updated its terms and conditions to introduce its new ‘Cryptocurrencies Hub’ feature, which allows users to hold and interact with Bitcoin and cryptocurrencies through their PayPal account.
Online Transaction Processor
The fourth patent filed, and in pending stage, describes another conceptual online transaction processor. The patent application’s abstract mentions, “An online transaction processor may provide operations for digital asset recommendations and processing in one or more metaverses. The online transaction processor may determine digital assets available to a user in one or more digital wallets, as well as interactions by the user in one or more metaverses.”
This processor’s goal is to facilitate payments between users and merchants operating on different network layers (layer-1s and layer-2s) in a more efficient manner.
A layer 2 refers to any off-chain network, system, or technology built on top of a blockchain (commonly known as a layer-1 network) that helps extend the capabilities of the underlying base layer network.
These multiple patents filings by PayPal comes at time when a latest report suggested that 95% of people holding NFT collections are currently holding onto worthless investments.