PayPal has taken significant strides in its efforts to establish its own NFT marketplace by submitting a patent application for a system enabling the purchase and transfer of NFTs. The application, filed in March 2023 and recently disclosed, outlines a method for conducting on- and off-chain transactions involving NFTs through a third-party service provider. While the application mentions Ethereum as a potential platform, it suggests the involvement of an undisclosed third party for routing NFT transactions.
The proposed blockchain ecosystem includes the possibility of fractionalized NFT purchases, creating opportunities for the trading of governance tokens. In addition, the patent’s scope extends beyond digital collectibles, encompassing any form of distinguishable digital data that can be tracked on a decentralized blockchain ledger. With a user base with over 446 million active accounts, PayPal’s reach will provide greater accessibility for individuals and artists looking to buy, sell, and safeguard their NFTs.
The application also introduces the concept of an “omnibus wallet,” directly linked to the service provider, which would enable transactions without blockchain registration or associated gas fees. The patent further explores the potential for NFT-generated income through royalties, with storage and checkout services potentially offered by a third party, and compliance and risk management streamlined by the service provider. The application emphasizes the system’s adaptability, highlighting the use of various currencies. PayPal’s recent announcement of the creation of its dollar-backed stablecoin, PayPal USD ($PYUSD), further solidifies its commitment to digital assets.
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