Despite advancements in onchain infrastructure, the lack of Web3 native payment rails remains a significant hurdle as existing on- and off-ramp solutions are heavily reliant on custodial systems. During a recent X Spaces conversation, Pavel Matveev and Georgy Sokolov, co-founders of Wirex and Wirex Pay, discussed these challenges and proposed their innovative solutions.
đź”’đź’ł Hidden fees and security issues plague current payment systems.
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🎙️ Our talk with @matveevp and @wirexapp discussed how ZK tech and @Wirexpaychain can change the game.
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Founded in 2014, Wirex — a Web3 money app — has made the long journey from breaking down the barriers between crypto and everyday spending to creating a new payment infrastructure. In 2015, the project introduced a debit card that allowed the conversion of crypto into fiat.
“It wasn’t easy,“ Sokolov reflected when discussing the early days of Wirex and added:
“Even today, some companies promise crypto cards but never deliver. We were one of the first, if not the first, to launch a working card at scale.”
Stablecoins are the preferred method of spending with Wirex cards. Users can also convert Bitcoin (BTC) or other cryptocurrencies into fiat for spending or transfer to a bank account.
“Think of it as Revolut plus Coinbase,” said the co-founder. “There’s a use case for everyone, no matter how you use your money.” Leveraging partnerships with Visa and Mastercard, the Wirex card is accepted globally and offers numerous benefits, including multicurrency accounts, competitive exchange rates, free ATM withdrawals and a rewards program known as Cryptoback™.
“Our transaction fees and unit economics are better than the competition because we cut out the middleman,” Matveev noted.
“Many other crypto cards on the market have higher fees because of these extra layers.“
Sokolov also revealed plans for a line of credit feature, allowing users to spend directly against their crypto holdings without needing a separate loan:
“It’s a debit card that works like a credit card for your crypto.”
Navigating the shift to non-custodial crypto wallets
The discussion highlighted a shift in the industry toward self-custody. “Users don’t trust centralized platforms anymore after events like the collapse of FTX or Celsius,” Matveev explained. “There is also increasing regulatory pressure on custodians and centralized platforms. It’s getting harder to scale the custodial business. As a result, most crypto-native or crypto-curious users now keep their funds in non-custodial wallets.“
To address this trend, Wirex is launching Wirex Pay, a modular chain specifically designed for payments. Wirex Pay uses account abstraction, giving users complete control over their funds through private keys, multisignature and other methods.
For security and scalability, Wirex Pay employs zero-knowledge technology, ensuring blockchain security without compromising transaction speed.
The key innovation of Wirex Pay is its ability to integrate with existing payment networks like Visa and Mastercard without requiring users to give up custody of their crypto. Matveev explained that users essentially give Wirex Pay temporary permission “to debit their account up to a certain limit.”
The entire payment process occurs on the blockchain, with settlements in stablecoins. Wirex Pay’s approach eliminates the need to convert crypto into fiat, creating a faster and more efficient system.
“We encourage builders in the space to integrate with our infrastructure,” Matveev said. With Wirex Pay, companies like digital wallets or payroll apps can offer crypto debit cards to their users without the complexity of traditional integrations.
The Wirex Pay mainnet launch, scheduled for July 2024, is accompanied by a node sale in three phases: a whitelist sign-up, a whitelist pre-sale and a public sale after the mainnet launch.
The node sale provides an exclusive opportunity for users to purchase node licenses and become key components of the Wirex Pay network. A total of 100,000 nodes will be available for sale, with node operators earning continuous rewards from 20% of the total token supply and up to 40% of transaction revenue.
Nodes are essential for validating transactions and maintaining network security, with rewards including continuous earnings, potential airdrops, governance rights and non-fungible token (NFT) proof of ownership. With flexible operation options, participants can run nodes independently, through a service provider or delegate them to another operator.
“As we’re approaching it, the decentralization of the network and community building becomes very important for us as a mechanism to improve and increase the decentralization of the blockchain.”
Bridging crypto and traditional loans with onchain collateral
Wirex is also paving the way for future advancements with its CryptoCredit Bridge product, enabling banks to accept onchain crypto as collateral for traditional loans. “It’s especially helpful for high-net-worth individuals,“ Matveev highlighted, adding:
“It can be difficult to explain to traditional lenders how you acquired your crypto through platforms like Aave. Having a credit bridge from a regulated bank simplifies the process.”
Another feature in development is the ability to link users’ crypto holdings directly to a Wirex Pay card, enabling seamless spending without converting crypto to stablecoins. “Users will be able to choose which crypto assets they want to use,“ Matveev elaborated:
“They will be able to unlock spending power without selling their assets, and it will all happen transparently on the blockchain with no counterparty risk.”
Both founders expressed their vision for Wirex as a leader in the new generation of retail applications, bridging the gap between TradFi and Web3. “We see Wirex as a mass-market product,” Sokolov emphasized.
“This cycle is different. The infrastructure is finally in place to build mass-market use cases on the blockchain,“ added Matveev and concluded:
“We can now abstract away historical friction points, such as gas fees and complex key management, and pave the way for easy-to-use retail applications that are critical to bringing new users into the crypto space.“
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