Building the "VISA of Web3": The Web3.0 privacy payment and settlement system TOPOS based on PlatON is officially released
TOPOS stands for "Tokenized Open Payment Operating System," which is a tokenized open payment operating system.Author: PlatON
Recently, PlatON founder Sun Liling attended the "2023 Hong Kong Web3 Carnival 'Global Web3 Payment Innovation Forum'," where he delivered an opening speech on the "Web3.0 Privacy Payment Clearing System" and officially launched the Web3.0 Privacy Payment Clearing System TOPOS built on PlatON.
The evolution of payment systems has mainly accompanied changes in the value carriers of currency and the methods of credential verification. In today's context of Web 3, digital currency provides the technical background conditions for fully unifying information flow and capital flow. However, the current payment architecture has only developed to the early stage of payments, centered around peer-to-peer transfer as the core clearing rule, and has not yet formed a set of clearing and settlement standards that can handle various complex payment scenarios and multiple participants.
"We believe that in the Web 3 world, which is based on blockchain as the underlying platform, the unification of information flow and capital flow will ultimately be achieved in a non-custodial manner. Currently, CEX is actively promoting the exploration of digital currency as a means of payment, which is more akin to the centralized wallet logic of Alipay, being relatively mature but also having lessons learned in terms of cost and efficiency. However, this approach undermines two characteristics of digital currency itself: non-custodial and the unification of information flow and capital flow. If executed based on full-chain transactions, there is currently no set of clearing rules on-chain that can correspond to the interests of multiple payment participants and complex payment scenarios," Sun Liling stated. "Therefore, we believe that a set of chain-based clearing and settlement system standards will inevitably emerge in the future." This also marks the opportunity for the birth of TOPOS.
What is TOPOS?
TOPOS stands for "Tokenized Open Payment Operating System," which is a tokenized open payment operating system.
TOPOS is an open payment operating system based on the underlying blockchain, adhering to an OPEN LOOP multi-party architecture. Anyone can assemble the final payment service on this ecosystem using the underlying blockchain capabilities provided by TOPOS. Merchants and users can hold Web3 assets in a non-custodial manner and rely on the standards developed by acquiring institutions, wallet institutions, and Tokenized Money payment scenario standard setters to complete payments and exchange value. Just like the VISA/MASTERCARD system, each participant in the payment process assumes different roles to complete their tasks and earn profits.
TOPOS is referred to as an operating system because it does not directly provide payment services. Similar to VISA, TOPOS primarily defines the standards for operating the underlying blockchain. This is a payment standard based on Tokenized Money, which can bring about a revolution in the existing payment system in terms of compliance, security, and ecological value.
The Core of TOPOS Payment: Tokenized Money
The core of TOPOS payment is based on Tokenized Money, and the entire payment lifecycle of Tokenized Money is referred to as privacy payment. The underlying system of TOPOS will provide corresponding components and contracts for privacy payment. It has already completed the technical verification based on ZK Proof as an authorization credential, as well as the product development using homomorphic encryption to encapsulate one-time payment credentials for QR code payment scenarios and contract development based on signatures to implement guaranteed transactions, QR code transactions, and other push payment scenarios. In the near future, TOPOS will open these components for use by acquiring institutions, e-commerce platforms, wallet partners, and others.
Tokenized Money is composed of three layers:
The core is value locking. Tokenized Money is not an infinitely authorized credential; therefore, it has a definite payment value for a single execution action. This value can be stablecoins, CBDC, BTC, ETH, or any consensus-based settlement asset.
The outer layer is payment logic. Every payment has matching transaction logic, which includes delivery conditions, clearing rules, time constraints, scenario constraints, etc. These effectively avoid uncontrolled circulation of settlement assets and provide payment constraints at the underlying protocol level to help acquiring institutions, wallet institutions, and others manage controllable risks.
The outermost layer is the authorization mechanism. The security of payments relies on the authorization mechanism, which in the Web3 world primarily depends on cryptography. Different authorization methods, such as ZKProof, HE, and digital signatures, can meet the authorization needs of different scenarios, adapting to the various requirements of the acceptance side.
Through this three-layer structure, the "money" in Web 3 should ultimately be something that users can self-mint and safely complete controlled transfers of value.
Compliance, Security, and the TOPOS Economic Model
As a protocol layer service, TOPOS relies on cryptographic components and smart contracts. Therefore, from a compliance perspective, TOPOS has split the overall contract architecture, independently separating the issuance of off-chain assets to on-chain, privacy payment-related contracts, and value exchange-related contracts into different components. This supports different participants to engage independently, facilitating compliance operations based on their respective jurisdictions.
To ensure the security of the entire system, merely having privacy payment is not enough. To enable the payment ecosystem to operate, a large number of cryptographic components and basic service support are needed. With the technical support of the LatticeX Foundation, TOPOS employs an MPC approach in the design of settlement currency issuance, which helps issuers define internal issuance approval processes while meeting API integration needs. Additionally, in contract design, it not only provides compatibility with currently mainstream implementations such as ERC 20 /EIP 712 /EIP 1155 /EIP 2612 /EIP 3009 but also adds auditing contract functionality before issuance to help issuers better manage reserve assets, making asset auditing more feasible.
It is worth mentioning that through an open payment ecosystem, TOPOS can reduce the previously high cross-border payment fees by at least 60%. In the cross-border payment process of VISA/MASTERCARD, merchants not only bear high fees, but users also incur hidden costs during currency exchange, with the overall payment cost potentially accounting for more than 5% of the transaction amount. A significant portion of these profits is captured by card organizations, which explains why card organizations have the highest valuations in the global payment ecosystem. After adopting the open architecture of TOPOS, it will only take a small portion of the profits, with part allocated to the creators of the Tokenized Money protocol and another part paid as GAS to the PlatON underlying blockchain platform. Of course, this fee can also be covered by acquiring institutions or wallets in some scenarios. Overall, this fee is extremely low. The main profits will be more distributed to the providers of payment services, namely acquiring institutions and wallet institutions, allowing these entities that ultimately serve merchants and users to gain greater ecological benefits.
"In the future of Web 3, we believe that as more assets reach consensus to become settlement currencies, the number of currencies available for settlement in the ecosystem will increase. The clearing and settlement of these currencies will be more similar to current cross-border payments. Therefore, the proportion of cross-border payments in the Web 3 world will increase from the current 20% to potentially 80%. Thus, the overall cost savings of the TOPOS economic model under this development trend will be more significant, providing greater profit distribution to acquiring institutions and wallet service providers," Sun Liling stated.
Out Of Many, One
Over the years, PlatON has always stood out, consistently focusing on deepening its underlying technology. The official debut of the payment clearing infrastructure TOPOS can be seen as a perfect transition for PlatON from underlying technology to upper-level business. In the future, TOPOS will strive to build a multi-party consensus-based multi-lateral payment clearing architecture under the global regulatory compliance framework, inviting global developers, issuing institutions, acquiring institutions, wallets, and other specialized third-party service providers to participate, aiming to create a decentralized federal system akin to VISA in the Web3 world.
As Sun Liling stated, if we were to summarize the core concept of TOPOS in one sentence: What is the "VISA of Web3"? What is the new generation of global clearing and payment infrastructure? We can borrow the motto on the Great Seal of the United States: "Out Of many, One."
