In the future, everyone will be able to seamlessly manage their funds through cryptocurrency wallets, achieving wealth growth and financial freedom.
Written by: Foresight Ventures & Bitget Wallet
Introduction: From Traditional Finance to Onchain Revolution
Globally, the financial system still faces high costs and low efficiency, especially in cross-border payments, where fees are expensive and the process is time-consuming. According to the World Bank, 1.7 billion people worldwide still lack access to banking services, leaving them excluded from the traditional financial system. The emergence of blockchain technology is fundamentally changing this situation.
The core advantages of blockchain lie in decentralization and transparency, eliminating the reliance on intermediaries, significantly reducing transaction costs, and enhancing liquidity. In this context, cryptocurrency wallets have evolved from mere digital asset storage tools to feature-rich financial platforms. PayFi is a typical representative of this innovation, breaking down the barriers between onchain earnings and real-world payments, making personal fund management more efficient and intelligent.
The Rise of Onchain Finance
Limitations of Traditional Finance
Expensive and Inefficient Cross-Border Payments: The fees for cross-border transfers can reach 6%-8%. According to the World Bank, the average cost of global cross-border payments is as high as 6.65%, with fees in Africa reaching as high as 8.2%. The time for funds to arrive can take several days, with many low-income workers' remittances being consumed by high costs.
Insufficient Coverage of Financial Services: Globally, 1.7 billion people still lack bank accounts. In countries with the most limited financial services, such as Morocco and Vietnam, nearly 70% of the population does not have a bank account, preventing them from enjoying basic deposit, lending, and investment services, which limits wealth growth. In countries like Mexico and Colombia, it is difficult for individuals to open dollar accounts, making it impossible to access dollar assets and high-quality investment opportunities priced in dollars.
Idle Funds: The issue of idle funds is particularly severe in the traditional financial system. In developed countries, savings account annual interest rates often fall below 1%, while in developing countries, insufficient coverage of financial services leads to low efficiency in fund utilization.
The emergence of blockchain technology provides a new solution to these problems. The combination of decentralized finance (DeFi) and stablecoins allows people to bypass traditional banking systems, directly access dollar assets, and achieve returns far exceeding those of traditional finance through onchain financial tools.
The Rise of Onchain Finance and Global Trends
The high costs and low efficiency of the traditional financial system have gradually shifted people's attention to onchain finance, where issues of cross-border payments and financial inclusivity are particularly prominent. The Bitget Wallet Onchain Report shows that 46% of users choose cryptocurrency payments primarily for their speed. In emerging markets, such as Africa (52%) and Southeast Asia (51%), this demand is especially pronounced. The traditional banking system has low coverage in these regions, and fund settlement is slow, while cryptocurrency payments offer a faster and more convenient way to transfer funds.
In addition to transaction speed, 41% of users favor cryptocurrency payments for their global accessibility, making cross-border remittances and global transactions smoother. The seamless experience of cross-border transactions is the primary reason users in North America and Oceania prefer cryptocurrency payments. Users of different age groups also emphasize different aspects of cryptocurrency payments; millennials and Generation Z value the convenience of borderless transactions more than Generation X. Users in the Middle East (38%) and Western Europe (35%) often choose cryptocurrency payments for privacy considerations.
Characteristics of Onchain Finance
Through a decentralized architecture, Web3 transforms financial services from a closed traditional system into an open ecosystem, making transactions more transparent and efficient while returning more control to users. It is predicted that the global blockchain market will grow rapidly in the next decade.
Lower Transaction Costs: The decentralized architecture of blockchain technology eliminates the reliance on intermediaries, allowing users to conduct peer-to-peer transactions directly, significantly reducing costs. The average transfer cost of blockchain-based payment networks is only about $2. With the application of scaling solutions like Ethereum Layer 2, these costs can be even lower, especially suitable for scenarios requiring small payments. Research by the OECD indicates that blockchain can reduce transaction costs by 60-80% compared to traditional payment methods.
Higher Fund Utilization: The introduction of smart contracts further enhances the automation and efficiency of onchain finance. By setting predefined rules, smart contracts can automatically execute profit distribution or transaction operations without manual intervention. After users deposit assets into DeFi protocols, smart contracts generate profits according to the rules and automatically pay them to the user's wallet, which can be used for payments immediately when needed.
Transparency and Security: The transparency of blockchain is one of its core features. As a public ledger, every transaction recorded can be publicly accessed, eliminating the trust issues present in traditional financial systems. In traditional banks or payment systems, the flow of funds and fee structures are often opaque, while blockchain allows users to track the specific movements of assets in real-time. In decentralized finance platforms, all profit distributions are clearly visible, eliminating the need for intermediaries, allowing users to ensure the security of their assets.
How PayFi Changes Personal Finance
PayFi is a new payment financial innovation that connects onchain earnings and transfers with real-world consumption payments, providing a dynamic way to utilize funds for personal finance, allowing users' assets to continuously generate returns and be directly used for living expenses when needed. This innovation makes fund flow more efficient and enhances the value of asset utilization. For those who find it difficult to access dollar assets, PayFi also provides a way to hold dollars through stablecoins and enables them to enjoy higher investment returns through onchain financial tools.
PayFi acts like a bridge, seamlessly connecting onchain earnings with real payment scenarios. Through smart contracts and onchain finance, users' earnings go directly into their payment accounts and are automatically used for various expenses. Users can avoid volatility through stablecoins or participate in higher-yielding profits through DeFi. PayFi achieves dynamic fund utilization through the following mechanisms:
Earnings Generation: Users' assets generate stable annual returns through onchain protocols (such as DeFi protocols). These returns come from users staking assets or participating in liquidity pools, typically with annual yields between 5%-8%.
Real-Time Payments: Users' onchain earnings can be settled in real-time for daily consumption payments, eliminating the need for manual withdrawals or additional operations. This direct connection mechanism allows funds to flow efficiently, providing instant settlement and low-cost advantages, avoiding the delays and complex operations common in traditional financial systems.
Financial Equality: Stablecoins (such as USDT, USDC) provide users with a convenient, secure, and low-volatility payment medium, allowing them to bypass banks and the restrictions of their local currency systems, directly accessing dollar assets and achieving wealth growth through high-yield tools onchain.
The Rise of Cryptocurrency Wallets
The Evolution of Cryptocurrency Wallets: From Storage and Trading Tools to Comprehensive Financial Empowerment Platforms
If blockchain is the new engine of the financial world, then cryptocurrency wallets are undoubtedly its key control panel. From early digital asset storage tools to today's multifunctional financial platforms, the development of cryptocurrency wallets has witnessed the rise of onchain finance. Cryptocurrency wallets have transitioned from traditional wallet storage tools (like MetaMask), helping users manage and store crypto assets, to multifunctional financial platforms (like Bitget Wallet), which not only provide storage functions but also integrate trading, earnings generation, and payment services, fully upgrading the user experience.
The Important Role of Cryptocurrency Wallets in PayFi
As the core infrastructure of onchain finance, cryptocurrency wallets not only provide secure asset storage but also support earnings, payment, and transfer functions.
Onchain Financial Assistant: Wallets are not just storage tools; they are also users' onchain financial assistants. By integrating with mainstream DeFi protocols like AAVE and Compound, users can stake or store assets (such as USDT, ETH) to earn higher annual returns than centralized platforms, managed through smart contracts. These earnings are generated directly onchain, allowing users to earn while storing without complex operations, achieving dynamic appreciation. In countries where it is difficult to open dollar accounts, cryptocurrency wallets become a key way for people to access stablecoins, allowing them to avoid the risks of local currency depreciation and enjoy high-yield opportunities from dollar assets.
Global Payment Capability: Payment is the core function of cryptocurrency wallets, directly enhancing users' daily consumption experience. Wallets support multi-currency payments (such as BTC, USDT) and avoid delays in traditional payments through instant settlement. Additionally, using blockchain technology, payment fees are reduced by 50%-80% compared to traditional channels, making it especially suitable for users who frequently engage in cross-border payments.
Simplified Transfer Experience: The decentralized technology of blockchain has completely simplified the traditional transfer process, allowing users to transfer funds peer-to-peer without intermediaries. Cross-border transfers are also fast and transparent, suitable for international remittance scenarios, with fees far lower than traditional bank cross-border transfers. Users have complete control over their funds, ensuring the freedom and security of their assets.
Future Outlook: How Cryptocurrency Wallets and PayFi Will Reshape Personal Finance
Cryptocurrency wallets have transcended being mere storage tools to become the core platform for personal finance. PayFi redefines fund management by integrating onchain earnings with real payments, allowing funds to flow efficiently and maximizing utilization.
Deep Integration of Financial Ecosystems
Cryptocurrency wallets not only support asset storage but also integrate earnings management and payment functions, enabling users to earn returns in decentralized finance (DeFi) and seamlessly use them for real payments.
Innovation-Driven by Blockchain Technology
The transparency of blockchain eliminates the trust deficit in traditional finance, while the automation capabilities of smart contracts enhance the efficiency of payment and earnings management. At the same time, with the widespread adoption of energy-saving technologies, blockchain networks are becoming more sustainable.
Widespread Adoption of Cryptocurrency Wallets and PayFi
The use of cryptocurrency wallets and PayFi is expanding from tech enthusiasts to ordinary users, with more and more users and businesses joining this ecosystem to jointly promote innovation and development in financial services.
In the future, everyone will be able to seamlessly manage their funds through cryptocurrency wallets, achieving wealth growth and financial freedom. This is not only a technological innovation but also a new financial lifestyle that will drive the global financial system towards a more open and equitable era.
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