The secret winner of PayPal’s dive into Crypto
With the recent news of crypto payments coming to PayPal, all eyes have been on the major cryptocurrencies offered as payment options; Specifically BTC and ETH. There is one crypto currency that could gain more from PayPal dipping their feet into crypto, than any of these initial currencies though. The industry standard Oracle, Chainlink, seems to have a lot to gain from the payment giant diving into the crypto world.
How will PayPal use Chainlink though? Similarly to how a DeFi project needs to have accurate price data of various Cryptocurrencies, PayPal will need to access accurate price data as well. If someone wants to pay for their grocery bill with BTC, PayPal will need to know an accurate BTC/USD price in order to make the conversion seamlessly. One could imagine this happening in various countries across the globe, meaning there would also need to be BTC price feeds relative to a variety of currencies. Even if these transactions were only to happen every few minutes across the world that would still add up to a large number of calls to Chainlink Node operators. We have already seen how attacks on less robust Oracle designs have cost DeFi users and protocols millions. It would stand to reason that these same attack vectors would need to be secured for PayPal. PayPal certainly has the resources to build their own centralized system, however this could limit their ability to interact with future crypto developments, as well as be expensive to build. Alternatively, one could see how they would rather use a decentralized system that is already the industry standard and which would also make them composable with other Crypto and DeFi related projects they might want to integrate with in the future. At its’ face, this argument might just seem like a personal conjecture, however if you dig a little deeper into the connections between the companies the picture comes more into focus.
The first area we can see connections between the PayPal and Chainlink teams is at the website https://chainlinkadapters.com. When you look on this website under the “API providers list” you can see a PayPal adapter is listed. What is more telling is that Chainlink has formally announced integrations and partnerships with most of the other companies and projects listed under the “API providers’’ list. This information along with the fact that the project LinkPal(a Peer-to-Peer Ethereum to fiat decentralized escrow via PayPal) won chainlink’s 2019 Hackathon, makes the PayPal and Chainlink connection just a little stronger. LinkPal, the PayPal adapter, and Chainlink’s current price feed for BTC/USD and ETH/USD are some of the initial building blocks necessary for a potential integration. PayPal showing up on Chainlink slideshows might hold more significance than initially thought.
That is not the only connection that Chainlink and PayPal might have in common though. As Chico Crypto mentioned in a video last week Chainlink also has a connection to PayPal through the crypto custodian BitGo. This connection boils down to Chainlink recently integrating with BitGo to secure their wBTC, using Chainlink’s proof of reserve function and PayPal looking into purchasing BitGo. Digging into this connection a little more we can see that Chainlink is actually connected with BitGo beyond just securing wBTC. They recently hired Ben Chan, the former CTO of BitGo, as the Vice President of Engineering at Chainlink. In the announcement video, Sergey introduces Ben saying this about why Chainlink Labs brought Ben on
“[Ben] is going to be helping us grow, and properly build into production a lot of things that we are coming up with on the research team and together with Steve our CTO, and kind of to productize and generate the production outputs”.
Is a PayPal integration one of these things they plan on putting into production? Well if it is, and PayPal is going to be buying BitGo, who would be better for composability between these organizations than the former CTO of BitGo? Additionally Sergey specifically mentioned that Ben would be working with Steve Ellis who was a frequent contributor to the PayPal adapter Github, along with Thomas Hodges (Chainlink’s chief integration engineer). Ben is not the only recent hire with connections to PayPal though.
Connor Stein was also recently hired as Senior Software Engineer at Chainlink Labs. Connor Stein previously worked as a Senior Software Engineer at Paxos. Paxos is also the company that is currently powering PayPal’s crypto purchases. Finally Chainlink also reportedly hired another Software engineer from the company TenX which coincidentally has ties to PayPal as well. TenX was part of PayPals start up incubator in 2016. It would make a lot of sense for Chainlink Labs to hire developers intimate with the companies/projects they aim to incorporate into the ecosystem in the future. If these developers’ familiarity with BitGo, Paxos, and TenX was indeed part of the reason they were hired, it would not be the first time Chainlink hired developers for this reason. After buying TownCrier in 2018 and purchasing DECO this past summer Chainlink Labs hired the creator of both projects, Ari Juels, as Chief Scientist, seemingly in order to help integrate these technologies into the Chainlink protocol.
With Chainlink already being a cornerstone of DeFi, could Chainlink be integrating into traditional finance as well? The foundations for such an integration seems to be being laid and the effects that could have on Crypto as a whole would be immeasurable.