Polygon has announced the addition of fiat payment onramps for the Polygon Network. It will deliver this via its partnership with Alchemy Pay where Alchemy Pay will create a bridge between fiat and crypto payments by embedding into the Polygon Network. The result will enable any Polygon-based protocol to set up a fiat on-ramp.
Sandeep Nailwal, co-founder of Polygon, said: “DeFi protocols have been flourishing but challenges with Ethereum’s usability at a global scale have slowed development. Scaling solutions are vital to DeFi’s ability to go mainstream. Polygon is already solving the problem of Ethereum’s slow and costly transactions, and now thanks to Alchemy Pay, we can provide an essential gateway between fiat and crypto transactions.
“This development opens up new capital inroads that will propel users of polygon’s DeFi ecosystem onto the next level in their commercial development.”
How will this Polygon / Alchemy Pay partnership work
Today there are >4,000 hosted applications within Polygon’s DeFi ecosystem. These will be able to enact transactions on their DeFi apps via direct fiat on-ramps to traditional financial payment platforms – like Visa, Mastercard, PayPal and multiple local payment channels around the world. In addition, this move should also simplify DeFi app payments on e-commerce platforms, such as Shopify and other networks.
Alchemy Pay already handles US$5 million in daily transactions, primarily from Asia and Europe. The partners expect a greater volume of US transactions once Shopify completes integration with Polygon by the end of 2021.
“The Integration of fiat payment options is key to the goal of a frictionless payment experience on crypto networks,” said John Tan, CEO of Alchemy Pay.
“It will reduce the tendency of users to hold tokens long term, and make it more appealing to use them within decentralized apps. This, in turn, will appeal to developers who want to build DApps that people can actually use. Both Polygon and Alchemy Pay enable people to use blockchain apps and DeFi platforms rather than just speculate on the tokens.
“With the hybrid crypto-fiat support of Alchemy Pay, Polygon now will have a much broader scope for development as well as a stronger appeal for adoption. By empowering Polygon and Ethereum with more seamless and flexible fiat-crypto payment channels, Alchemy Pay is supporting the DeFi sector at a fundamental level.”
Polygon and Alchemy
Polygon offers what it calls a full-stack scaling solution that seeks to reduce congestion on the Ethereum mainchain. In September, the number of daily active users on Polygon regularly surpassed those on Ethereum. Rather than being a competitor to Ethereum, however, Polygon prefers to describe itself as facilitating the use of platforms on the Ethereum network. Its suite of products offers developers access to many major scaling and infrastructure solutions including:
- L2 solutions (ZK Rollups and Optimistic Rollups)
- hybrid solutions
- stand-alone and enterprise chains
- data availability solutions, and more.
Polygon’s scaling solutions have a pretty broad adoption with:
- 3000+ applications hosted
- ~600M total transactions processed
- ~60M unique user addresses
- US$5B+ in assets secured.
In contrast, Alchemy Pay is an integrated fiat and cryptocurrency gateway solutions provider. It claims to offer seamless crypto and fiat acceptance for merchant networks, developers and financial institutions. The company drives the adoption of blockchain technology by making crypto investment, commercial transactions, and DeFi services accessible to consumers and institutions in the fiat economy. Today, Alchemy Pay:
- supports >60 countries with 200 payment channels
- has touchpoints with more than 2M merchants (through partnerships with the likes of Binance, Shopify, Arcadier, QFPay and others).
Significantly, both Polygon and Alchemy Pay are part of the Blockchain Infrastructure Alliance (BIA). This brings together industry infrastructure builders including:
- crypto exchanges
- stablecoin issuers
- DeFi platforms
- payment solutions
- other essential roles.
The BIA’s objective is to promote and drive the growth and advance of the cryptocurrency and blockchain space. The BIA funds blockchain research and nurtures projects that seek to optimise decentralised finance and blockchain infrastructure.
Enterprise Times: what does this mean
DeFi advocates recognise that Ethereum needs more ways to accept fiat into its ecosystem. This embraces the notion that the Ethereum network’s ability to handle transactions between fiat and cryptocurrencies will be crucial if it is to attract new users. The partnership’s new capability should, therefore, support and encourage additional growth for Polygon’s DeFi ecosystem.
Beyond the specifics of the Polygon/Alliance Pay partnership lies the increasing significance of fiat and crypto integration. Previously this was difficult. It is becoming easier, as this partnership will hope to demonstrate. Yet, with ever greater, integration between fiat and crypto comes the probability of fiat’s regulatory regimes taking more and more interest.