Recently, the PayFi concept introduced by Solana Foundation has been popular in the market, and a series of popular projects including Huma and Credix have emerged.
Just yesterday, @veloprotocol, a veteran in the payment track, also announced that it would tokenize BlackRock's short-term Treasury bond fund (BUIDL) and integrate it into the stablecoin camp to further promote the integration of traditional financial institutions' products and the web3 chain world. What do you think? Next, let me talk about my observations.

In traditional web2 application consumption scenarios, problems such as long waiting time for accounts receivable and high friction in cross-border SWIFT agency settlement have always existed. The fundamental crux of the problem lies in the fact that such problems involve complex issues such as government policy and regulatory framework, banking system process specifications, cross-border payment infrastructure, and exchange rate and time zone differences.

Objectively speaking, among the many factors that affect the low efficiency of the global payment and settlement network, the on-chain payment infrastructure that web3 can provide only accounts for a small part of them. What is more critical is whether a balance can be found in the complex network of relationships such as regulatory agencies, banking system compatibility, and the interest chain of payment service providers?

However, the reality is that projects with good web3 technical infrastructure are too disconnected from the complex political and business relations of web2, while projects with strong web2 relationships are not so web3 Native. Velo Finance has a good balance between the two aspects:

1) Let’s talk about the company’s background first. Velo Finance is affiliated to Charoen Pokphand Group, the largest commercial group in Thailand. Since its establishment, it has provided payment scenario support for Charoen Pokphand Group in multiple business lines such as finance, retail, supply chain, telecommunications, real estate, and media. It has multiple high-frequency payment application scenarios such as over 12,000 7-11 convenience stores.

It should be said that in Southeast Asia and the Asia-Pacific region, Velo has shown a strong "aristocratic" atmosphere in the background of web2 political and business relations. Recently, Velo has reached a cooperation with PTL Holding Co. Ltd to expand the financial market in Laos, which is another step forward in its vision of realizing a global payment and settlement network. PTLH is a representative company in the industrial field of Laos, with a comprehensive layout in Laos' commodity industry, banking system, trade logistics and other aspects.

In addition, Velo has reached a global strategic cooperation with Visa, cooperated with SCB Siam Commercial Bank, a local Thai bank, and then developed cross-border business solutions with Asia Digital Bank. It is not difficult to see that Velo has put a lot of effort in expanding the "hard bones" of traditional political and business relations in web2.

In fact, the global cross-border payment transfer market share exceeds 1 trillion US dollars, and the market space in Southeast Asia alone exceeds 150 billion US dollars. However, the vast majority of Southeast Asians do not even have bank accounts. In this context, cross-border payment technology built on blockchain is trying to integrate into Southeast Asia. If there is no project with strong industrial strength, rich payment landing scenarios, strong and compliant political and business relations to lead the promotion, it is conceivable how difficult it is to implement blockchain cross-border payment applications.

2) After laying a solid foundation for the complex political and business relationship of web2, Velo has also made a lot of exploration efforts on web3 cross-border payment infrastructure:

1. Velo's blockchain infrastructure is built on the Stellar network. Stellar and Ripple are both established payment blockchain projects. Users can trade on the Stellar network with extremely low transaction fees. Velo directly acquired Interstellar, which was founded by the core development team of the Stellar chain. Therefore, Velo can be regarded as a cross-border payment solution "directly" bred by the Stellar team.

2. The EVM-compatible Nova Chain is used as a unified blockchain execution network. At the same time, the Orbit mobile application is built to provide a brief introduction to the "scan code payment" model, with the aim of lowering the participation threshold for traditional market users to onboard the web3 environment. In addition, a Universe super DEX is built to allow users to connect to third-party decentralized self-custodial wallets to manage their assets, which is the basis for ensuring users' frictionless integration with the web3 native environment.

In addition to these, Velo has also laid a Warp network that connects multiple blockchain environments, which can simultaneously support many popular public chains such as Stellar, BNBChain, Ethereum, etc. In general, although Velo does not have advanced concepts such as "modularization" and "chain abstraction" at the web3 infrastructure level, it has all the practical functions it should have and is down-to-earth.

3. Velo has built a joint credit trading network (FCX), which is more like a distributed DAO organization. It conducts daily operations through a system of staking Velo tokens to obtain 1:1 anchored digital credit. Since the network is composed of traditional financial institutions such as SEBA Bank and Lightnet Group, although this credit trading network has the framework core of DeFi, it is strictly a CeDeFi network, which acts on partners in different environments of CeFi and DeFi.

3) Looking at Velo’s product protocol development roadmap and its two-pronged efforts to expand the web2 political and business resource market, it is obvious that Velo’s approach to building a global settlement network for cross-border payments is a bit special: it is neither so web3 Native nor very web2 traditional and rigid. It can be called a CeDeFi dual-habitat project.

It is worth mentioning that Velo recently signed a strategic cooperation with the Solana Foundation. Solana will act as the blockchain settlement layer, and Velo will naturally become a financial technology interconnection "bridge" that connects the on-chain and off-chain barriers and will work together to provide designated clearing services for Laos digital gold transactions.

It is not difficult to see that PayFi is not a narrative concept, but more of a long-term challenge of integrating web2 traditional finance and web3 on-chain infrastructure and liquidity.

How to make web3 convenient technical facilities better serve the traditional financial payment framework, and how to introduce blockchain liquidity entities without damaging the interest network of the traditional financial architecture are full of obstacles.

Especially in the current pure on-chain world, with the background of serious infra stacking, such solutions that "use the interest of lending platforms to pay for consumption, creators to realize, and carry out cross-border payments in real time" are committed to solving real-world application scenario problems. #VELO

The end.