PayFi and RWA in My Eyes

I am very fortunate to be able to discuss PayFi with @calilyliu and @DrPayFi today, and it has evolved into stablecoins and RWA. The most direct explanation of PayFi is 'Buy now but pay never'. In Chinese, it means buy now, but never pay.

Essentially, it is using future earnings to pay for current consumption. To put it simply, it is equivalent to a 'credit card that doesn't require repayment'. Of course, the notion of not needing to repay is a false proposition, but the actual logic does exist.

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

But in the PayFi field, it can be reversed; the credit available for payment is based on additional earnings. For instance, like the payment system launched by @OKXWallet_CN, depositing 10,000 USDT or USDC can yield a 5% annual return, which amounts to $500 in a year, translating to a monthly earning of $41.1.

Thus, the 'no payment' limit provided by OKX Wallet could be $41.1 a month. In simpler terms, any spending within $41.1 is covered by the earnings from the principal, thus realizing 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���. Payments are merely a currency conversion process, but 'earning' or 'returns' are what distinguish the rights between different 'credit cards'. The next track for payments should be in accumulating 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 TBills, and the expected yield from TBills is the depositors' 'no payment limit'. I believe this track will certainly produce unicorns, and there is a high probability of producing publicly listed companies. Even mortgage lending can utilize the same method.

The future of PayFi should not be isolated, nor just a currency conversion channel, but rather a credit channel of current 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, we often said in DeFi that when you don't know the source of returns, you (your funds) are the source of returns. The most stable source of returns is AA+ or AAA-rated government bonds or corporate bonds, especially during times of monetary tightening, which is the best opportunity for RWA development.

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