Payment giant PayPal has taken a significant step into the world of non-fungible tokens (NFTs) by filing a patent application, which was initially submitted in March 2022 and made public on September 21, 2023.
The patent application sheds light on the challenges many face when dealing with NFTs, as buying and selling these digital assets often demands a deep understanding of both NFT technology and the intricacies of transferring them. Users typically need to be well-versed in connecting and configuring their wallets to navigate NFT marketplaces — a barrier that can deter newcomers.
To bridge this knowledge gap, PayPal envisions a user-friendly solution: a system enabling NFT transactions through a third-party service provider. This innovative approach aims to simplify the process, making it accessible even to less-experienced users.
As such, users interested in NFT transactions won’t necessarily need their own digital wallets. Instead, they could opt for a third-party broker offering a range of storage and checkout services, streamlining the process further.
Within the patent application’s blueprint, a standout feature is the support for fractionalized purchases. This allows users to acquire partial ownership of an NFT, opening up new possibilities for trading and investment.
Furthermore, PayPal envisions the use of a decentralized autonomous organization (DAO) in collaboration with the third-party service provider. This DAO would be instrumental in enhancing NFT liquidity by establishing a dedicated platform for “managing the ownership and exchange of fractional NFT shares.”
While the patent is pending approval, it underscores PayPal’s interest in embracing Web3 technologies. This move follows PayPal’s trademark applications related to Web3 in October 2022 and its partnership with MetaMask for enabling Ethereum transactions through PayPal in December of the same year.
In a more recent development, PayPal expanded access to digital currencies in the United States in September, making it easier for Web3 merchants to integrate crypto payments into their platforms. This expansion comes with robust security measures and the added convenience of converting crypto to USD directly from wallets, providing users with increased financial flexibility.
