Area | Hypothesis entering sprint | Takeaways leaving sprint |
Customer
problem(s) | Crypto-focused businesses want lower fees when accepting stablecoin payment. → Generally at 1% since using different crypto, but worth asking!
Crypto-focused small businesses want a payments aggregator for different app networks. → Accept users using Binance Pay, Coinbase Commerce, etc.
Crypto-focused small businesses, freelancers, and event organizers want standalone payment analytics instead of depending on e-Commerce platforms. → Note, this is likely a small market | Problems were invalidated.
- Fees are not top of mind for merchants, and 1% is considered good relative to credit card fees (3% + $0.30).
- Merchants cared more about how much more can you help them make (increase conversion) and how little work there is (ease of integration).
- Plenty of products offer analytics, and most users want crypto-based analytics as part of their broader e-Commerce stack.
Research shows plenty of competitors that offer a full end-to-end platform with analytics, output in desired currency, etc. One prominent competitor aggregates paying with CEX balances already. |
Market size | Binance pay did $1.8B volume in past 365 days
Crypto-only small businesses - likely small, many can implement wallet requests themselves, etc. | Market size was smaller than expected.
- Binance Pay is likely to include significant P2P transfers, which isn’t applicable since we’re focusing on merchant volume.
- Few people specifically care about crypto-only payments.
- On the other hand, payments space is very large. One company hadn’t heard of some competitors, and believes there will be multiple winners for even a specific vertical |
Growth rate | AA wallet providers are growing a lot (Privy)
Custodial exchanges continue investing in their ecosystem (Coinbase continuing to do more on Base, etc) | Didn’t get more info on AA.
However, CEX continue to invest in their offchain balances and ecosystem. Coinbase Commerce just launched a new onchain payments protocol which standardizes how users and merchants interact. |
Potential early customers | Talk to BitPay customers - directory, Mixpay customers - directory | 8 calls, 2 chats - merchants, builders, folks at Circle, those in developing countries |
However, two opportunities that came up:
- Float - anyone who offers instant settlement has to handle double accounting.
- Remittance providers - user in country A sends money to recipient in country B, and recipient can instantly withdraw. However, money takes 2-3 days to transfer over Swift, so banks do internal “borrowing” at low rates to deal with this.
- Credit card checkout companies - card networks have next-day settlement, but that still means 12-24 hours, money is coming from treasury and stables.
- Especially for cases where money is settled immediately into stables (onchain) or into bank account
- Friendly fraud / first party fraud - when a legitimate transaction happens, but consumer contests it
- Chargebacks are $15 minimum fee, for a consumer who doesn’t want to pay for a $3 coffee. Massive problem for anyone who takes payments.
- There is a credit score for consumers who want to take loans. What does a credit score for consumers look like? (may not be blockchain)
I think the first may have a solution based on crypto rails (is there a way to get fiat USD to a bank if they don’t accept crypto? is this a routing problem?). I want to explore this further, but will prioritize it next week against other problems.
The second is interesting, but will hold until I explore more crypto areas that I’m interested in.
I’m fascinated by a few products that make decentralized commerce easier and easier.
3cities
3cities is a decentralized web3 crypto payments app focused on accessibility and credible neutrality. 3cities can be used to send a pay link to request money, receive donations, and as a point-of-sale system for in-person payments.
3cities.xyz
Slice: The decentralized commerce protocol
Experience the future of commerce with Slice. Faster than traditional checkout, more powerful than standard payments. Buy and sell anything with your wallet, with no fees.
slice.so
Splits | Onchain payments made easy
Splits is a set of simple, modular smart contracts for safe and efficient onchain payments.
splits.org
