Building the Next-Generation Intelligent Financial Infrastructure

1. Industry Background: The Paradigm Shift from Digital Payments to Programmable Finance

The global digital payment market continues to expand at a trillion-dollar scale, yet its underlying systems remain constrained by the clearing and settlement delays and high intermediary costs of traditional finance. Although internet technology has enhanced the convenience of payments, its core remains an extension of the centralized account system.

The advent of Web3 technology, particularly high-performance Layer 1 blockchains like Conflux, presents a fundamental opportunity for transformation in the payments sector. Its core value proposition lies in:

• Disintermediated Settlement: Enabling peer-to-peer value transfer, which reduces transaction costs and counterparty risk.
• Programmability: Imbuing funds with “logic” through smart contracts, giving rise to new models such as Streaming Payments and Real-time Finance.
• Asset Ownership: Users truly own their digital assets, rather than them being a mere accounting entry in a bank account.

However, to translate these technological advantages into products that consumers and businesses can use seamlessly, a complete, layered technology stack is required. This is the backdrop against which Conflux PayFi was born.

2. The Conflux PayFi Technology Stack

Conflux PayFi is not just a payment protocol, but a four-layer financial infrastructure designed to support the next generation of consumer-grade Web3 applications. Its core objective is to enhance the Time Value of Money (TVM) and capital efficiency.

2.1. Blockchain Settlement Layer

This layer is the foundation of the entire stack. Conflux’s Tree-Graph ledger structure provides the high throughput (TPS) and low latency settlement capabilities that are a prerequisite for handling large-scale, high-frequency consumer payments. The “PayFi-oriented TPS Boost” plan mentioned in reports indicates that Conflux is making targeted optimizations to its core protocol, which may include enhanced parallel transaction processing capabilities and faster block confirmation mechanisms, to ensure a payment experience that can match or even surpass existing Web2 systems.

2.2. Assets Settlement Layer

The medium of payment is assets. This layer focuses on the issuance and management of stablecoins. Conflux plans to collaborate with compliant issuers to launch stablecoins pegged to fiat currencies such as the offshore Chinese Yuan (CNHC), Hong Kong Dollar (HKD), and US Dollar (USD). More technically profound is the mention of “developing native functionalities on stablecoins.” This could mean:

• Embedded Compliance Logic: Integrating KYC/AML rules directly at the stablecoin contract level to achieve “native compliance” for transactions.
• Programmable Triggers: Stablecoins can automatically execute payments or unlock funds based on external data (e.g., time, product delivery status), providing a foundation for complex scenarios like supply chain finance.
• Balancing Privacy and Auditability: Leveraging technologies like zero-knowledge proofs to protect user privacy while meeting the audit requirements of regulators.

2.3. PayFi & DeFi Protocol Layer

This is the core innovation layer of PayFi, where traditional financial models are reconstructed on-chain and deeply integrated with DeFi protocols. The philosophy shifts from “Deposit for Yields” to “Pay with Future Yields.”

• Consumer Payments (C2B) — On-chain Credit Card: Users can pledge the future expected yield from their yield-bearing assets (e.g., aTokens, cTokens) in DeFi protocols as collateral to obtain a real-time spending limit. When a user makes a payment, the protocol automatically liquidates a portion of the future yield to complete the transaction. This is a fully decentralized credit generation mechanism that requires no traditional credit checks.
• Creator Economy (B2C) — Income Stream Pre-financing: A creator’s future subscription or tip income can be tokenized into a future income stream. The PayFi protocol allows creators to sell or pledge this tokenized income stream in the DeFi market to gain liquidity in advance.
• Supply Chain Finance (B2B) — Receivables Tokenization: Suppliers can mint their accounts receivable (invoices) into NFTs or fungible tokens and instantly sell them on-chain to liquidity providers, enabling trustless and automated Reverse Factoring.

2.4. Entry Layer

This layer serves as the bridge connecting technology and users. Through payment wallet applications, APIs, and SDK components, it abstracts complex on-chain operations into a familiar front-end experience for users. The strategic partnership with VCard is a key implementation of the Entry Layer. VCard possesses:

• Global Compliance Licenses and Issuance Network: Issuing international cards like VISA and MasterCard, connecting to bank accounts and e-wallets in 108 countries/regions.
• A Vast User Base: Over a million users and hundreds of thousands of cards issued.
• Robust Security Technology: Employing SSL/TLS and AES-256 encryption, and integrating an AI-powered risk control system driven by DeepSeek.

The synergy between Conflux and VCard is clear: Conflux PayFi handles the generation, circulation, and settlement of on-chain assets, while VCard is responsible for seamlessly connecting these on-chain assets to tens of millions of online and offline merchants that accept card payments globally. Users can use their DeFi yields to shop on Amazon or buy coffee, with all underlying settlements efficiently completed on the Conflux network.

3. The AI Narrative in Finance: From Data Processing to Value Creation

The core concept proposed by Sam Chen, CEO of OpenCSG, is that the value of AI lies not in being a back-end tool, but in breathing life into the new financial system. AI should not be confined to risk control and data analysis but should become a “fusion engine” that creates new models, optimizes resources, and drives collaboration.

The proposed OCC (Open Cyberport Community) initiative aims to integrate the three major fields of GenAI, Web3, and Sovereign AI to provide financial institutions with a low-cost, high-efficiency open-source technology stack. This indicates that a clear path for AI to empower finance is emerging:

• Intelligent Risk Pricing: Conducting dynamic, personalized credit assessments and risk predictions based on multi-dimensional on-chain and off-chain data.
• Asset Value Discovery: Performing more precise valuations of complex financial products, such as tokenized future income streams.
• Optimizing Market Efficiency: Providing intelligent market-making, liquidity management, and arbitrage strategies in decentralized markets.
• Enhancing User Experience: Significantly lowering the barrier for ordinary users to participate in complex financial activities through natural language interaction.

As the world’s largest offshore RMB clearing center, Hong Kong is actively embracing its regulatory framework for stablecoins, providing an excellent testing ground for digital financial innovation. Against this backdrop, OpenCSG, as the sole invited AI enterprise, has proposed a “Stablecoin × Web3 × AI” integration framework.

4. Our Philosophy: Building an Open and Integrated Intelligent Financial Ecosystem

As advocated by OpenCSG, the success of next-generation financial infrastructure depends not on closed technological barriers, but on the construction of an open and collaborative ecosystem. Its role is not merely that of an AI technology provider but a “fusion engine” and an “igniter.” Our philosophy resonates with this, as we firmly believe that the core value of technology lies in empowerment. We are committed to:

1. Promoting Open-Source Technology: By providing open tools and model libraries, we lower the barrier to innovation, allowing more participants to join in building the next-generation financial infrastructure.
2. Fostering Cross-Disciplinary Integration: We actively explore the intersection of cutting-edge technologies like Web3 and AI, acting as a “fusion engine” to catalyze new chemical reactions.
3. Serving Real-World Value: We maintain that technology must ultimately serve the real economy and solve real-world business pain points. Whether it’s improving payment efficiency or optimizing capital allocation, the ultimate goal is to create broader social and economic value.