PayPal has taken a big step towards creating its blockchain ecosystem by filing a patent application outlining its innovative plan for buying and transferring non-fungible tokens (NFTs). The document, filed in March and made public on September 21, illustrates a method for executing NFT transactions, whether on or off-chain.
NFT: Beyond Digital Collectibles
The pending patent details that users would have the ability to exchange NFTs through a third-party facilitator. Interestingly, although the name of this provider remains undisclosed, Ethereum is referenced in the document.
PayPal‘s vision goes beyond simply being a marketplace facilitating the exchange of digital mementos. The system identifies NFTs as representing any unique digital data that can be traced using a decentralized blockchain ledger. This spectrum encompasses digital media such as images, music, videos, and more. Furthermore, its utility extends to include deeds for tangible assets, tickets to events, legal documents, and various other real-world objects. The architecture of this proposed system is adaptive, supporting fractional acquisitions through governance tokens, which are exchangeable themselves. Notably, an integrated decentralized autonomous organization can potentially enhance NFT liquidity, bolstered by a purpose-built platform, allowing NFT holders to accrue income based on royalties.
When off-chain transactions come into play, an “omnibus wallet” linked to the service provider takes over, housing both the buyer’s and seller’s wallets. This design avoids the need for on-chain registration, bypassing broadcasts on the blockchain network and associated network fees.