How Layer1 powers stablecoin payments at scale (Part 2)
In this Part 2, I’ll cover other unique elements of Layer1 which support payment companies in driving revenue with stablecoins, through powerful trading capabilities and customer-ready Payment Solutions. I’ll also touch on our vision for what’s next: a single platform for orchestrating stablecoin and fiat payments at scale.
First, let’s start by looking at how Layer1 makes it easy to convert between crypto, stablecoins and fiat.
If you’re already managing stablecoin payments at scale, or you’re new to the market with big ambitions – these trading features will help you drive efficiency and revenue.
Liquidity orchestration and trading
The problem:
You’re enabling stablecoin payments for customers, so you need liquidity providers (ie crypto exchanges, brokers, market makers, OTC desk) to give you crypto in exchange for fiat or vice versa. This is commonly referred to as “on-/offramping” and usually happens in the environment of the liquidity provider.
Most crypto wallet solutions today support lightweight integration of the main external liquidity providers, enabling you to see and control aggregate balances and transactions.
Some solutions also have basic trading capability to send a market order to the liquidity provider for 2-3 exchange pairs (eg USDC/USD). But you still need to deal with multiple different integrations, and source liquidity using different interfaces.
Managing liquidity movements efficiently across all blockchain networks in your asset pools, well as trading balances on liquidity providers is a big challenge for treasury management teams.
How Layer1’s solves it:
Layer doesn’t just connect liquidity, it orchestrates liquidity. From a single interface, you can seamlessly process the movements of funds between operational asset pools (Layer1) and trading balances.
This enables you to:
- fund a given trade on the liquidity provider’s side (sending crypto from Layer1 to the liquidity provider)
- defund your trade balances to manage risk exposure (eg post-trade settlement)
- hydrate operational wallets on Layer1 (sending crypto from LP to Layer1) to guarantee SLAs at all times.
Layer1 supports the movement of all assets sitting on the liquidity provider side (digital assets and fiat) for any flow. All networks and fiat currencies from the liquidity provider are supported.
On top of displaying and moving assets from your liquidity providers, you can also convert assets globally across all of your connected liquidity providers. Any given currency pair supported by the liquidity provider is supported by Layer1. This includes both, crypto and fiat, and any combination of them. So hundreds of exchange pairs, and more than 60 liquidity providers are supported out-of-the-box. Just plug in your API keys.
Layer1 goes further too. It natively provides a fully fledged Order Execution Management System (OEMS) to identify and execute best pricing strategies across all connected liquidity providers.
This means you can use smart order routing to find the best execution price for a given currency pair and volume across all supported currencies.
Layer1 will source pricing and order book data from every connected liquidity provider and estimate the best possible combination of (partial) orders to submit to fill a given conversion request.
This is a powerful multi-leg trade execution and orchestration feature that normally is a premium software solution of its own, which many businesses license on top of wallet infrastructure.
Combining our next generation wallet infrastructure with these state of the art trading capabilities, we can offer a feature-complete digital asset tech stack for payments with Layer1, which abstracts complexity through defaults and automation.
We then took it one step further, combining these features to provide a seamless infrastructure experience – as BVNK is enjoying it today – that supports use cases and meets customer demand.
Automated Payment Solutions
The problem:
As BVNK scaled our payments business, we wanted to enable our merchants to accept crypto and stablecoins as a means of payment. But many of them didn’t want to – or weren’t permitted to– hold crypto on their balance sheet.
Our licensing and permissions enabled us to accept crypto funds on our clients behalf, convert them and settle our merchants in fiat. But we had to go through a lot of bespoke and cumbersome processes between acceptance and conversion, before we could settle.
We also faced challenges when mapping settlement to conversions and deposits in any given payment flow.
The more transactions we processed, the more cumbersome these processes became.
How Layer1’s solves it:
We decided to automate the entire flow and package it in a product called Payment Channels.
When enabling our customers to send crypto and stablecoin payments, similar challenges arose. Combining conversion and settlements in this context, we automated the entire flow in a product called Payment Links.
These white-label automation features are available out of the box with Layer1.
As we develop, test and launch new payment applications for the BVNK platform (our managed solution), we’ll continue to make these solutions available in Layer1.
What’s next?
At BVNK we believe in the power of stablecoins to accelerate global money movement, but we also believe the future of payments is multi-rail, with stablecoins and fiat currencies coexisting.
The next phase of our Layer1 vision is all about multi-rail payments orchestration. It involves building integrations to global and local PSPs like BVNK to power efficient treasury management and end-to-end payments across fiat and crypto rails.
Here, stablecoins and fiat currencies coexist seamlessly, and payment orchestration becomes the key to unlocking new efficiencies.
