Professional Documents
Culture Documents
Playbook for
FinTech on Polygon
Discover how Polygon can create new opportunities
to streamline, grow and give an edge to your business
using its suite of solutions in this primer.
Wallet Providers 10
Loyalty Programs 14
Stablecoin Issuance 16
SuperApp integrations 17
Polygon Supernets 24
Polygon ID 27
Leading FinTechs and Banks are experimenting with blockchain technology, reducing the
cost of interbank funds transfer, creating new business avenues, and enabling more
efficiencies in the current product suite.
For example, the World Bank estimates that annual global remittances are more than
$550 billion and that the average cross-border wire transfer costs customers 6.9%.
Stablecoins are another instrument that has helped banks and payment providers
complete international payments in seconds rather than days, and as these solutions
evolve, we see Polygon playing a significant role in it.
Some of the benefits that are already being seen among businesses using
the suite of Polygon products are:
who are the necessary stakeholders needed to create a business ready for prime-time
Liquidity Providers:
Settlement Networks:
On-chain analytics:
Custody Services:
behavior, this becomes one of the top custody services work with Polygon to
priorities for financial institutions to enable such services per the needs of
ensure that all laws and regulations are institutions and services that choose to
Advisory:
To bring all the stakeholders together These above are some of the necessary
and ensure all the necessary stakeholders that would be needed when
ready. We at Polygon help various use cases that Financial institutions and
entities building on Polygon get the FinTechs are unlocking to pick the right fit
right direction and get plugged into for your business and take it from there:
Making crypto accessible and straightforward to use has thus been a critical use case for
the industry. In addition, the value of Web3 must be expanded to the $96+ trillion fiat
economy, which depends on the ability to transfer value between the crypto and fiat
worlds
Currently, these on-ramps and off-ramps are provided by various crypto exchanges and
on-ramp companies. While this serves as one of the best ways to the on-ramp, it still has
the following problems
High charges when users on-ramp of up to 6-8%
Limited customer base due to the relatively newer nature of business.
Poor UX and difficulty understanding the process flows
Fragmented Liquidity due to low volumes.
Poor KYC (Know your customer) and AML (Anti Money Laundering) policy
implementations.
However, due to their vast user base, easy UI & UX, massive customer base, and rigorous
KYC and AML policies, the current financial institutions make them the perfect solution
to provide On-Ramp and Off-ramp solutions.
It creates a seamless bridge between Fiat and the Cryptocurrency world and a new
avenue for businesses to plug in their current infrastructure and user base. We at
Polygon have enabled multiple such institutions to develop the solution which they
offer to the world today.
Accessing your crypto without a wallet is difficult as they provide the interface from
the blockchain to its users and enable them to send or receive crypto. Based on who
has possession of the private keys, these wallets can be classified into two
categories:
Custodial Wallet
A custodial crypto wallet is one where As a financial institution, either they can
your assets are held in custody for you by choose to develop their wallet services
a third party. Most cryptocurrency which can hold custody of crypto assets
exchanges provide a custodial wallet on behalf of their clients, or they can
service where they have the crypto assets integrate with the existing custodial wallet
of their users on their behalf. providers like Fireblocks to offer their
clients such custodial services.
Provide new products like a fixed rate Enable loans against the crypto assets
deposit or a variable rate deposit based held by its users based on a high LTV and
on the customers' risk appetite and strict liquidation criteria.
generate returns for its customers at the
backend.
Provide custody of assets for
Provide staking services for various proof
its existing clients and charge
of stake blockchains like Polygon.
a fee for such service.
This solution can be a big hit when the clients are institutional and less averse to the
cryptocurrency world. If you notice, multiple banks today have started crypto desks
for their premium and high-net-worth clients. Of course, the clients will need a
blockchain to facilitate all the settlements, and one can easily do that on Polygon.
Moreover, the chain provides immense opportunities to generate returns through the
host of dApps currently running on it.
A non-custodial crypto wallet is a wallet where only the holder possesses and
controls the private keys. For users who want complete control over their funds, non-
Since there are no intermediaries, you can trade crypto directly from your wallets. It's
a good option for experienced traders and investors who know how to manage and
Enable users to leverage liquidity from Enable dApp discovery by providing dApp
wallets to explore products on-chain but chain activities without developing much
DeFi and NFTs have created various new financial products and services that financial
Based on their risk appetite and knowledge of the rabbit hole, they can choose the
We at Polygon have been working with numerous custodial and non-custodial wallets
to cater to the development of wallet services and onboarding the next wave of
Retail Payments
The traditional and widely used cross-border payments process is slow, expensive
moving funds from the US to Argentina could be quoted here, which takes about nine
Payment service providers sending a transaction from the U.S. to Argentina, for example,
Senders pay into the provider Payment is then sent through a Once payment arrives in the receiving
sending funds through the ACH cross-border network or via a country, it goes through the receiving
or the card rails, as a requirement. correspondent bank. country's payment system. This leg of the
across Asia, Africa, and Latin America, the remittance cost is incredibly high, per
For example, in the Philippines, 60% of the population relies on funds sent home by
overseas workers, while remittances account for 10% of the country’s GDP.
Yet, Asia’s fragmented payments landscape, where each country has its currency and
expensive. Payment speed is critical for many sending funds home as well, and a
Reduce the need for pre-funded Due to high efficiency and on-chain
accounts, thereby improving the settlements, cheaper costs are much
working capital positions and making more affordable than the currently
capital available at considerably lower fragmented banking ecosystem.
costs.
Polygon, through its solutions, can provide the global settlement layer to enable
efficient and cheaper cross-border movements on chains using multiple stable
coins like BUSD, USDC, and USDT.
Interoperability
Better security
Loyalty program
Customer
provider
unique, traceable, as
membership programs
well as fraud-proofto
a large extent18
of current, unused
of rewards points,
Brands like Starbucks and NuBank, have chosen to build their solutions on Polygon, and
many other brands are working on activating their loyalty programs seeing the benefits
and experiences they can add by bringing their existing and new ideas of increasing
brand loyalty on the chain.
However, there is further market opportunity outside the "traditional" crypto realms.
Combining the efficiency and speed of digital currencies with value stability, stablecoins
often offer faster payments and more efficient money movement, potentially simplifying
cross-border payments or promoting financial inclusion.
Stablecoins may be more effective for use as an everyday medium of exchange (i.e.,
money) than their highly fluctuating crypto counterparts. Eventually, stablecoins may
attract a broader retail audience, adding more users to the FinTech or Financial institution
choosing to pursue it.
Polygon has been a home of stablecoins with over ten stablecoins deployed and the
majority of the share being USDC, USDT, and BUSD, which are used to settle millions
and billions of dollars worth of settlements every year.
With all its efficiencies, it serves as an effective manner to deploy stablecoins on the
existing ecosystem to create an exciting and better environment for the users.
Stablecoins are a form of alternative banking that helps underbanked firms who, for one
reason or another, cannot register a commercial bank account manage their assets
safely. The current 24-hour volume of over $50B and a circulation of over $150B in
stablecoins prove their adoption.
While exploring a For a single use case, there Users are also often unsure
blockchain ecosystem, are hundreds of dApps of what use cases exist and
what dApps exist in
deployed. There is no way what don't on the
various categories is often to find the best solution to blockchains.
tricky to find. execute the use case.
As more and more real-life use cases start to become available, it becomes inevitable
that these dApps on the SuperApp could become the go-to place for various use cases
being built on the chain and provide the maximum utility to the applications and become
the go-to place for all the new users onboarding the crypto and Web3 wagon.
Polygon has over 53,000 dApps, making it the perfect ecosystem for its own
SuperApp. The benefits of having a SuperApp could include more customer acquisition
since it's a sought-after use case and enabling listing fees to be featured on dApp
discovery.
How the market matures on the chain from over-collateralized loans on the chain
against cryptocurrencies to under-collateralized loans and against Real World Assets.
On-chain credit protocols have started to emerge, and cheap global capital is at the
disposal of chains.
FinTechs and Financial institutions have an opportunity to engage with the efficiencies
of this development. They can
Enable a new asset class like crypto to be accepted as collateral against loans their
users want to draw out with strict liquidation checks
Bring the on-chain capital, which is comparatively cheaper to provide loans to its user
base
Utilize on-chain credit scores to create new risk assessment models to make their
capital deployment more efficient
Enable easy peer-to-peer loans against collateral on-chain
Create an effective mechanism to bring in third-party collaborations to maximize
users' benefits.
With Polygon leveraging an existing lending market per the exact requirements of the
financial institution to capture the above opportunities or to create a whole new use
case on it, we do regularly, and we invite you to innovate with us.
With blockchain, this becomes possible. Invoice management today is one such task
where automation is being sought out. Blockchains can help in invoice management and
streaming payments in the following ways:
Multiple FinTechs have partnered with Polygon and built such solutions that are some
of the most widely sought answers in the space by other dApps and users.
There are some of the top use cases that are either being built or have been live on
Polygon, and if you as an entity are looking forward to getting your hands into Web3,
what would be a better place than Polygon, which is home of a vibrant ecosystem of
53,000 dApps and brands like Starbucks, NuBank, Stripe, Robinhood, Meta and the like to
start your journey with. Polygon is also committed to helping financial institutions make
this transition as easy as possible
Easy documentation: All the documentation required for building your solution is
readily available and can be used to develop your solutions on a chain. We have a
dedicated team to assist you should there be any problem
Business Development: We believe that true composability can only be achieved when
all the applications building on Polygon can be made composable enough to be
leveraged and built on, ensuring faster and more efficient protocols. We help projects
in achieving that through business development activities
Web3 focussed Marketing: With our deep understanding of Web3 DNA and culture,
we enable you to establish a Web3 brand and attract users
Grants and Infrastructure Support: Polygon can help you to connect with all the
significant oracles, storage solutions, wallets, on-ramps, and infrastructure firms to
ensure you face no roadblocks in building your solutions. We also have a grant system
to assist if needed.
Polygon PoS is a solution that achieves unprecedented transaction speed and cost
savings by utilizing side chains for transaction processing. At the same time, POS
ensures asset security using the rich Plasma bridging framework and a decentralized
Ethereum at 15 tx/s. VISA & Mastercard currently process around 2,000 tx/s.
Rely on the shared security of Ethereum Full EVM compatibility means deploying
with the benefit of Polygon’s speed. your smart contracts directly on the
Polygon chain.
architecture
On-chain DeFI
Settlements Applications
Any other where you want to deploy fast and scale quickly.
premium support to help you build your blockchain without the hassle of maintaining
below activities:
You do not have to find professional validators for your network to incentivize them to
The long and strenuous process of deploying and closing the deals on secondary
blockchain infrastructure. All the validators are hosted by different companies and
individuals who offer professional blockchain validation services, most of which are
Supernets are:
An EOA to EOA impact statistics indicates that over 120M daily transactions can be
processed on supernets. For some more stats, you can look at the below image.
Impact Statistics
Implementing Polygon Supernets results in the numbers mentioned below. *provided sample TPS stats are indicative
only .1000+ of TPS are achievable with more powerful validate node specs.
Performance Isolation: Isolating your chain from other chains ensures that your user
experience is not impacted by extraneous activity on the network, thereby providing
better performance.
Performance Isolation
Fees on shared permission less network are not under your control. High activity on the
network for some applications may increase arbitrary charges for your application.
Having a custom fee structure removes the infrastructure between your application and
its users.
custom fee structure allows you to get predictable fees and removes the
infrastructure between your application and its users.
Polygon ID is a decentralized, self-sovereign, and private identity solution for the next
iteration of the internet with the following properties:
payment identifiers
RegTech for PII data minimisation for regulatory KYC and crypto compliance
of signing documents
Author:
Aishwary Gupta
(aishwary@polygon.technology)