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2023-11-01

everPay Breaks Bank Development Bottlenecks, Paving the Future of Blockchain-Fi Infrastructure

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Author: Marshal Orange @ Contributor of PermaDAO

Translator: Marshal Orange @ Contributor of PermaDAO

Reviewer: Kyle @ Contributor of PermaDAO


As a banking staff, I often ponder the significance of blockchain for the banking industry. Recently, I transitioned from the data center to the development center, and upon gaining a deep understanding of the core architecture and business processes of internal payment and reconciliation systems within banks, I was once again struck by the complexity of banking system architecture.

As it is widely known, banks prioritize security and accuracy and adhere to the principle of "Least Knowledge" (the Law of Demeter), which essentially means that a class should have minimal knowledge about other classes, and an object should only communicate with the objects it directly interacts with, akin to "talking to friends and not strangers."

Undoubtedly, this approach enhances a certain level of security, but it comes with evident drawbacks: excessive adherence to the Law of Demeter results in the proliferation of parameter intermediaries and passing classes, increasing system complexity, making the bank's system architecture as convoluted as its staff organizational hierarchy. Therefore, banking systems tend to be over-engineered, with an emphasis on architectural perfection while sometimes neglecting the actual project's maintainability and cost. However, the banking industry has no choice but to prioritize security even at the expense of other factors, given the vast number of business systems, the frequent interactions in internal and external clearing, and the immense data volume and complex rules. Because any minor oversight could lead to significant errors. Nevertheless, this complexity hasn't delivered the anticipated perfection and often results in incidents, sometimes even leading to notifications from the Banking and Insurance Regulatory Commission within the intranet.

At this point, you might already be thinking that blockchain could address this pain point. A PoW blockchain could potentially replace dozens of core banking systems. In reality, the application of blockchain technology in the banking industry has been widespread for many years. While major banks have invested significant resources and efforts into blockchain technology development, research into articles such as "The Application of Blockchain Technology in the Banking Industry" published in "China Finance Magazine" suggests that the banking industry has indeed employed blockchain technology to solve some challenges in supply chain finance, corporate business, and other intermediary business scenarios. However, for high-volume, real-time retail transactions, the massive-scale application of blockchain technology is still in the early stages of exploration.

Source: Image from the internet

The main reasons for this are as follows:

  • Protection of customer privacy is crucial in retail banking. While important information can be encrypted during the process of putting it on the blockchain, this can lead to issues with transaction speed and data availability on the chain.

  • Current blockchain implementations by major banks are fundamentally unable to achieve a seamless conversion between digital currencies and physical cash, resulting in time costs and capital erosion. Given the enormous volume of retail data, the revenue from retail operations in many listed banks even accounts for a significant portion of their total income. This makes the maintenance costs of blockchain technology very high.

  • Banks' self-developed blockchain implementations lack full testing and security audits, which may pose various risks. Moreover, in practical retail scenarios, it is challenging to identify vulnerabilities and accounting risks in the post-transaction oversight management process, especially for high-value deposits, withdrawals, and transfers. In such cases, bank branches and business units often prefer manual operations and audits over automated processes.

As a contributor to PermaDAO, I was intrigued that the incentive settlement within the DAO is managed by a real-time financial protocol called everPay, responsible for its salary distribution. After experiencing and researching it, I must say I was truly impressed. EverPay, with its small stature, manages to surpass banks in functionality. It not only ensures permanent storage of transaction data while protecting user privacy but also guarantees 0 Gas Fees for transactions. It can handle high concurrency, theoretically achieving infinite TPS (Transactions Per Second). I was genuinely impressed, and I believe that everPay is the breakthrough solution for combining personal retail banking with blockchain technology.

Source: everPay’s Homepage

everPay can be considered the closest thing to traditional banking payments within the realm of Web3. One of the primary reasons for this is its decoupling of computation and storage processes through the SCP paradigm. The blockchain itself doesn't perform any computations but is solely responsible for data storage, while the computation process occurs off-chain, similar to Ethereum's scaling solution, Rollup, which offloads the sorting and processing of transactions off-chain. The core idea of SCP is that as long as the immutability of data storage and traceability of on-chain transactions are simultaneously maintained, the computation can yield a unique result, enabling consensus. Furthermore, SCP allows for infinite combinations of underlying data, provided data and data standards are defined, enabling applications to aggregate and generate a unique state from any storage layer, even multiple storage layers. This elegantly simple architecture encompasses all functionalities, providing significant inspiration for addressing the pain points of integrating traditional banking retail operations with current blockchain technology.

Another reason is that everPay adopts the Bundle token payment settlement paradigm. A Bundle transaction can contain multiple transfers, sorted and assembled in the form of arrays. This is similar to the principle of Layer 2 transactions with low fees, as seen in Rollup. Unique data compression and packaging technologies also ensure that transaction fees remain sufficiently low.

Currently, everPay has surpassed 20 million transactions. It's worth noting that this milestone was reached only one month after exceeding 10 million transactions. The substantial growth in data indicates that everPay has withstood the market's scrutiny and is receiving high recognition from the market. We can't imagine the potential everPay holds in the Web3 world in the future. Additionally, everPay continues to explore solutions to enhance user experience and lower the barriers for Web3 users. They have introduced an account-based user identity system called EverID. EverID utilizes the FIDO hardware identity authentication system, replacing the complex and hard-to-remember private keys and mnemonic phrases of traditional crypto wallets. FIDO, defined by WebAuthn in browsers/platforms, allows users to authenticate themselves in a passwordless manner using external identity verifiers like USB, NFC, or BLE. everPay can use the encryption chip on devices like smartphones as the key for user accounts. Users only need a smartphone or an email address to navigate the world of crypto, providing vast potential for the future ecosystem development of everPay and its integration with other applications.

EverID technology architecture analysis Source: everPay

Simultaneously, everPay inherently provides a fertile ground for RWA (Real-World Asset Tokenization). Any public blockchain can integrate with everPay, which can be viewed as a Layer 0 protocol capable of adapting tokens to a wide range of on-chain or off-chain assets, thus making it more accessible for integration with the traditional financial system, providing value support for on-chain assets. Currently, everPay has collaborated with Asia Digital Bank to issue an offshore Chinese Renminbi stablecoin called ACNH. The minting and redemption processes are both pegged 1:1 to the Chinese Renminbi. This goes beyond just OTC trading. As economic cycles continue to decline, leading to a rise in non-performing loans for banks, RWA can aggregate a substantial amount of illiquid bank special assets with future cash flows. These assets can then be re-circulated after credit enhancement and asset tokenization, providing a superior solution for the disposal of bank special assets. A recent report by the digital asset management firm 21.co estimates the conservative market value of RWA to be $116 billion, with significant room for growth. Even in a bearish scenario, RWA's market value is projected to reach $3.5 trillion by 2030. By the end of this century, the market value of RWA could surge to $10 trillion. everPay is more than just a payment protocol; it is the most likely candidate to bridge the traditional financial and crypto markets successfully!

everPay provides a powerful reference and solution for banks to deeply integrate personal retail operations with blockchain. It also outlines a grand blueprint for the next-generation payment protocol in Web3 for financial industry blockchain infrastructure. everPay never ceases to explore and continues to forge a new chapter in fintech, leading towards a more decentralized and digital future!


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