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PayPal Seeks Patent for NFT Marketplace

PayPal is developing a platform for the purchase and sale of digital collectibles (NFTs), potentially integrating with services like Ethereum.

In the process of developing its proprietary blockchain infrastructure, PayPal has filed a patent application outlining a method for acquiring and exchanging nonfungible tokens (NFTs).

These NFT transactions can occur both on and off the blockchain, involving various external systems or platforms.

Within the patent application, PayPal explains how users can engage in NFT trading through third-party services, without specifying the particular service. However, they acknowledge Ethereum as a potential platform for this functionality.

“The NFT in this example may represent any unique piece of digital data that can be tracked using a decentralised blockchain ledger. Examples include digital images, videos, music, collectibles, digital art, deeds to personal property, event tickets, legal documents, and other real-world items.”

PayPal actively pursues the creation of a system for acquiring and trading digital collectibles in the form of NFTs, with the capacity to integrate with other services like Ethereum. It’s important to note that this patent application is pending approval.

The application was initially submitted in March and made publicly available on September 21.

The system’s flexibility extends to various adjustments, such as introducing governance tokens, allowing users to engage in fractionalized purchases and acquire fractional ownership of NFTs. These governance tokens would grant users voting privileges and could be traded similarly to standard tokens.

NFT Transaction via NFT Marketplace Chart

For off-chain transactions, the system employs an omnibus wallet linked to the service provider, containing both the buyer’s and seller’s wallets, streamlining the monitoring of off-chain transactions.

Furthermore, the application accommodates the use of any currency, regardless of its type. In August, PayPal introduced its digital currency, known as PayPal USD (PYUSD), built on the Ethereum blockchain.

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