What Is PayFi? The Future Of Payments With Tokenized RWAs And On-Chain Credit

February 13, 2025

What Is Payment Finance (PayFi)?

Payfi, or Payment Finance, is a broad term that generally refers to the intersection of financing payments and decentralized finance (DeFi). It leverages blockchain to offer faster, more efficient, and potentially cheaper financial transactions to unlock the time value of money.

Key Takeaways

PayFi focuses on real-time settlement and bridging DeFi with real-world assets (RWAs), addressing the limitations of both ecosystems.
PayFi enables users to unlock TVM (Time Value of Money) through decentralized finance, offering instant access to future cash flows for reinvestment.
Solana supports PayFi with high performance (400ms block times), deep liquidity, and a growing developer community.
PayFi use cases include accounts receivable financing, creator monetization, and "Buy Now Pay Never" models that leverage interest for payments.

Satoshi Nakamoto's whitepaper introduces Bitcoin as peer-to-peer (P2P) electronic cash for online payments among peers without third-party intervention. Fast-forward 15 years, Bitcoin is still not widely used as a digital payment medium for daily activities.

Instead, stablecoins’ popularity seemed to have found a better product-market fit (compared to L1 tokens like BTC) for settlements, and since 2020, they’ve grown to a market cap of over $170 billion (as of October 2024).

For instance, stablecoins’ transaction volume is more than double that of Visa’s in the second quarter of 2024, according to a report by Andreessen Horowitz.

However, while stablecoins have facilitated everyday transactions, they haven't fully bridged the gap between traditional finance and the decentralized world. More importantly, they have not addressed the challenge of realizing the time value of money.

This is where Payfi comes in.

PayFi's solutions aim to make real-world financial transactions more efficient through innovations in cross-border payment financing and instant settlement for real-world assets (RWAs).

Understanding PayFi: DeFi Meets Payments Financing

Lily Liu, President of the Solana Foundation, is credited with coining the term PayFi, which she describes as the creation of new financial markets centered on the time value of money. Liu asserts that on-chain finance can unlock innovative financial products and experiences that are not possible in traditional or web2 finance.

While DeFi provides a vast array of financial services, think staking, lending, and more, PayFi's primary focus is on real-time settlement to help individuals and businesses access and utilize the time value of money more efficiently.

Also mentioned in Messari's "The Crypto Theses 2025" report, PayFi helps to bridge two highly potential ecosystems, RWA and DeFi, by tackling their major challenges. RWAs’ illiquidity, despite its massive value and DeFi's detachment from the real econhttps://x.com/humafinance/status/1844510148082929797omy, can potentially be addressed with the efficient implementation of PayFi solutions.

Time Value of Money (TVM): PayFi's Core Concept from The Financial Industry

Time Value of Money (TVM) is a fundamental financial concept that emphasizes the idea that a dollar's value today is greater than its value in the future. This concept is relevant in today's world because money invested now has the potential to generate higher returns compared to money received at a later time, as its value decreases over time due to inflation.

For example, suppose a person won a prize of $100,000 and needs to choose between receiving the full amount today or receiving it in equal monthly installments over the next five years. According to the TVM principle, taking the lump sum today would likely be more beneficial than opting for a monthly passive income, as the money can be invested immediately to generate returns, whereas the future installments would lose purchasing power due to inflation.

PayFi uses blockchain’s ability to be borderless to help users realize TVM via decentralized money markets. Besides reducing transaction costs, users can benefit from faster transaction times to reinvest their money or assets effectively.

Solana With PayFi: Transforming Global Financial Markets

According to Solana Foundation President Lily Liu, there are three key requirements for a blockchain for PayFi-based applications to flourish on the network:

High performance
Large capital liquidity
Ample talent liquidity

1. Performance

Near-instant settlements and T+0 cross-border transaction times are some of the biggest USPs of PayFi. To achieve such performance, a fast and reliable blockchain infrastructure is paramount.

Through Proof of History (PoH), Solana achieves block times of 400 milliseconds, allowing it to process (theoretically) over 100,000 transactions per second (TPS).

Along with this performance, the transaction fee of below $0.01 makes the blockchain more attractive for users and projects to try their hands on PayFi.

2. Capital Liquidity

The availability of highly liquid capital is crucial for smooth operation, including real-time transactions, which the Solana ecosystem effectively provides. Solana has a total value locked (TVL) above $6 billion, ensuring ample liquidity for PayFi transactions.

USD Coin (USDC), the largest stablecoin on Solana, with a market cap of close to $2.5 billion, makes it a key pillar in maintaining liquidity and helping PayFi networks like Huma facilitate on-demand, cross-border lending, and remittances.

3. Talent Liquidity

A strong developer community is essential for building PayFi for a larger number of crypto users. Solana has a growing number of monthly active developers in the crypto ecosystem. To emphasize, the number of total monthly active Solana developers rose from 244 in April 2020 to more than 3,300 in April 2024.

Considering these, Solana is a suitable blockchain for practical PayFi use cases. The chain is capable of combining the best performance with low fees, capital liquidity, and an active developer community.

Potential Applications Of PayFi

According to Mordor Intelligence, the global payment financing market is expected to reach $2.85 trillion in 2024 and grow to $4.78 trillion by 2029. The Asia Pacific region is expected to grow the fastest during this period and account for the largest market share.

This immense growth highlights the critical need for efficient, scalable, and accessible financial infrastructure — exactly what PayFi aims to deliver.

Here are some potential applications of PayFi that can reshape the future of finance.

Buy Now Pay Never

Buy Now Pay Never allows users to benefit from the time value of money principle, where users can buy a product or service without the need to pay for it later. In this case, the user deposits an adequate amount of funds to PayFi-supported products and uses its interest as a payment method.

Imagine you want to buy a new phone that costs $1,000. Instead of paying upfront or taking out a traditional loan, you could use a PayFi platform to commit a portion of your future earnings toward the purchase. Let's say you agree to pay $100 per month from your salary.

Here's where yield-bearing stablecoins come in. These stablecoins generate interest while they are held. The PayFi platform could use your committed $100 monthly payments to purchase these stablecoins. These stablecoins are then locked into a smart contract that automatically generates yield. Over time, the accumulated interest and principal from the yield-bearing stablecoins will eventually cover the cost of the phone.

Once the total amount reaches $1,000, the smart contract automatically executes the final payment to the seller, and you officially own the phone without ever having to make a lump-sum payment.

Account Receivable

Accounts receivable financing bothers the majority of businesses without surplus funding or financial institutions' backup, which might even lead to operational failures due to a lack of money. According to the Atradius report, 55% of businesses in the US receive late invoice payments, and 9% face bad debt.

To address this issue, PayFi introduces a decentralized and automated approach to accounts receivable financing. Traditional invoice financing relies heavily on intermediaries such as banks or financial institutions, causing delays, added fees, and restrictive credit evaluations. With PayFi, businesses can access instant liquidity by tokenizing their invoices or receivables and using them as collateral on blockchain-based platforms.

The availability of faster funds helps businesses maintain a safety cushion, allowing them to have a runway fund for unexpected expenses or to expand their growth opportunities without the constraints of delayed payments.

Creator Monetization

The creator economy is on a rapid upsurge with the global market size expected to surpass $500 billion by 2030. However, even on popular platforms, creators have to wait weeks to earn revenue for their latest videos.

In this scenario, PayFi can help content creators finance their video production by providing funds beforehand to create the complete video, which they can return automatically based on the return generated from streaming revenue.

This PayFi service allows creators, especially micro-influencers, to continuously deliver videos without waiting until their next pay.

Notable Players In PayFi Space

As slow remittances and settlement times continue to slow down commerce, many teams are coming together to tackle the challenges head-on.

Here, we will look at three notable projects in the PayFi ecosystem:

Huma Finance
PolyFlow
TLay

1. Huma Finance

Huma Finance is an innovative platform focusing on bridging DeFi with real-world financial applications, particularly through income-backed lending and payment financing solutions.

The project positions itself as a pioneer in the Payment Finance (PayFi) space, using blockchain’s capabilities to offer real-time, borderless liquidity for businesses and individuals.

Huma Finance provides an on-chain factoring market, allowing businesses to borrow against future income or invoices. This solution helps companies with cash flow challenges, offering immediate liquidity by transforming receivables into digital assets on the blockchain.

The platform's integration with networks like Circle, Superfluid, and Request Network showcases its focus on making decentralized invoice financing accessible and efficient for various stakeholders.

With recent funding of $38 million and a partnership with Arf to expand liquidity offerings, Huma is growing its PayFi network across blockchains like Stellar and Solana. Its approach enables faster settlements and makes financial services more accessible by moving away from asset-based lending towards cash-flow-based underwriting.

Core Focus

PayFi: Huma is a pioneer in the PayFi space, aiming to bring traditional payment financing processes onto the blockchain. This includes invoice financing, supply chain financing, and more.
Global lending: They facilitate cross-border lending and borrowing, making it easier for businesses and individuals to access capital regardless of location.
Real-world assets (RWAs): Huma is working to connect real-world assets to the blockchain, enabling new financing opportunities and unlocking liquidity for previously illiquid assets.

2. PolyFlow

PolyFlow is a blockchain-based infrastructure designed to improve the Payment Finance (PayFi) ecosystem by integrating DeFi with real-world payments and assets. Its primary goal is to address the limitations of traditional and blockchain-based payments by improving compliance, scalability, and transparency.

PolyFlow introduces two key elements:

Payment ID (PID): This decentralized ID system securely manages transaction flows, protecting user privacy through zero-knowledge proofs while ensuring regulatory compliance. PID functions similarly to a digital wallet, containing various elements like payment methods, digital identities, or NFTs, enhancing cross-functional use.
Payment Liquidity Pool (PLP): This component facilitates the secure and efficient movement of funds without relying on centralized institutions. Using smart contracts, PLP automates fund flows, reducing settlement risks and enhancing capital utilization for both TradFi and DeFi systems.

PolyFlow is working to create a unified financial infrastructure by decoupling the information and fund flows, which were traditionally managed by centralized systems. This modular framework ensures compliance with regulatory requirements and mitigates custodial risks.

The project is already collaborating with partners like OKX Wallet and exploring innovative use cases like “Scan to Earn”.

Core Focus

PayFi infrastructure: PolyFlow is developing basic infrastructure for the PayFi ecosystem. They're focused on bridging the gap between traditional payment systems and decentralized finance (DeFi).
Regulatory compliance: A key aspect of their approach is ensuring regulatory compliance. They aim to build a system that meets regulatory requirements while still making the best of what blockchain has to offer.
Security and efficiency: PolyFlow prioritizes security and efficiency in its design to support net settlements and micropayments on blockchain networks, reflecting Bitcoin’s original vision.

3. TLay

TLay (Trust Layer for DePIN) is a decentralized infrastructure layer designed for Decentralized Physical Infrastructure Networks (DePIN). Its goal is to bridge the physical and digital worlds by offering modular tools that facilitate large-scale collaboration among machines and devices, and enabling the management of RWAs through blockchain-based solutions.

TLay integrates various technologies, including trusted chipsets, IoT oracle services, and DePIN-specific appchains. This structure simplifies the development process for projects in the DePIN ecosystem by providing ready-to-use frameworks and tools for bootstrapping new applications. Developers can use these components to quickly launch innovative distributed digital finance and business solutions.

One of TLay’s main objectives is to ensure data authenticity, privacy, and transparency. For example, its BoAT3 IoT Oracle Service authenticates data from physical devices directly onto the blockchain, preventing data manipulation while supporting privacy. This setup is crucial for creating trust within DePIN ecosystems, where accurate real-time data feeds are necessary.

In collaboration with partners like Huma Finance, TLay also plays a role in PayFi (Payment Finance) innovations by ensuring trust and data security. This partnership allows PayFi systems to leverage trusted on-chain data to provide credit and real-time lending solutions, helping drive the development of machine-based economies where automated payments and financing are key drivers of growth.

Core Focus

DePIN infrastructure: TLay focuses on decentralized physical infrastructure networks, which include things like wireless networks, renewable energy grids, and sensor networks.
Digital twin technology: They create digital representations (or "digital twins") of physical assets on the blockchain. This allows for secure and transparent tracking, management, and monetization of these assets.
Data integrity: TLay ensures the integrity of data coming from physical assets using cryptographic proofs and decentralized consensus mechanisms. This is crucial for building trust and reliability in DePIN networks.

Conclusion

Payment Finance (PayFi) changes the way payments are conducted in the financial space, including traditional decentralized finance. With the proper implementation of PayFi solutions, users can access future capital “now” and finance their other interests.

We're still in the early stages of the PayFi revolution, but the potential is enormous. By connecting RWAs, automating payments, and merging DeFi with TradFi, PayFi is transforming the financial landscape.

Further, with events like the 2024 PayFi Summit, co-hosted by Solana, the word is spreading rapidly and community growth is accelerating. Given the nature of the technology, PayFi applications will very quickly go beyond the virtual world and impact the real-world economy.

Link

Join the TheDinarian Community

To read more articles like this, sign up and join my community today

thedinarian@thedinarian

February 17, 2025

The Dawn of DeFi: The Hidden War for a Decentralized Future

👉 DON'T FADE THIS ARTICLE~ Crypto Michael AKA "The Dinarian"

The below article is NOT financial advice, it is being broadcast for entertainment purposes only. You should DO YOUR OWN RESEARCH and NEVER invest any more than you are willing to lose. On that note, THIS ARTICLE AND THE UNDERLYING ASSET DISCUSSED COULD CHANGE YOUR LIFE FOR THE BETTER FOREVER! You SHOULD pay close attention as this MAY BE THE MOST IMPORTANT article you could ever have read, unless you were fortunate enough to read the Bitcoin whitepaper and had invested in it back in 2008. The asset I am about to present to you, COULD EASILY FLIP BITCOIN! ESPECIALLY WITH TODAYS ADMINISTRATION IN PLACE!
~ Namasté 🙏 Crypto Michael AKA "The Dinarian"

Attempted Theft of the World's Most Valuable Property, SEC Lawfare & The ETHgate Scandal

It is widely accepted that the media often spreads misinformation and hides any truth that challenge the establishments narratives. Well, this is one of those hidden truths...

Loans without Banks, Trades without Exchanges, Contracts without Lawyers. Peer to Peer Capital Markets disrupts traditional finance by removing middlemen and counter-party risk, enabling you to become your own bank by holding the keys to it all in your own privately held digital wallet.

To what lengths do you think the establishment would go to defend their control of the financial system? A system seemingly ripe with market manipulation, naked shorts, money laundering and regulatory capture.

The Myth of Open Source

For context, in the realm of open source, major corporations can engage in Intellectual Property theft by using open source projects to gain insights, technology, or legal protections without fully reciprocating to the community. Companies might contribute code to an open source project, only to later use that same code in commercial products, extending it with enhancements, essentially using open source as a low-cost R&D resource. Patents are crucial here, serving as a defense mechanism. Although open-source licenses cover copyrights, they don't extend to patents, meaning that companies holding patents can enforce legal protections against unauthorized commercial use, ensuring that any commercial application of their patented technology within open-source software requires proper licensing or recognition. This protection has historically led to the hyper-growth of industries like mobile phones and the internet, where patented technologies could be safely shared and built upon, promoting innovation and market expansion.

Validating Inventorship

In fields such as technology, pharmaceuticals, and manufacturing, patents are vital for safeguarding new inventions, with Nikola Tesla's extensive patent portfolio serving as a testament to his contributions to science.

However, Tesla's revolutionary inventions, like the Wardenclyffe Tower which aimed at providing free wireless energy, faced fierce opposition due to their potential to disrupt established control over energy markets. Financially sabotaged by investors like J.P. Morgan, legally challenged through "the war of currents" by Thomas Edison's promotion of the less efficient Direct Current system, and undermined by media smear campaigns, Tesla's work was systematically suppressed. After his death, the FBI's seizure of his documents further suggests efforts to control or conceal his ideas that could disrupt centralized energy distribution, illustrating how innovation can be stifled to maintain existing power structures.

Could this type of suppression still be happening today?

The Genesis of Decentralized Finance

Reggie Middleton first introduced Distributed Finance what would later become known as Decentralized Finance (DeFi), in 2013 when he invented and patented technologies under the title "Devices, systems, and methods for facilitating low trust and zero trust value transfers." This included groundbreaking concepts like programmable Smart Contracts, Swaps, Tokenized Assets, NFTs, Stable Coins, Digital Wallets, and even underpin Central Bank Digital Currencies (CBDCs).

https://patents.google.com/patent/US11196566B2/en?oq=US11196566+

Called by many as "The Most Valuable Property in the World", his patents US11196566B2, US11895246B2, JP6813477B2, JP7204231B2, JP7533974B2, & JP7533983B2 have been cited over 138 times by major financial institutions, underscoring their foundational role in the blockchain industry.

His patents cover:

Trustless Peer-to-Peer Value Transfers: Systems for enabling decentralized and secure value transfers between parties without the need for intermediaries. Applicable to cryptocurrency transactions, DeFi platforms, and digital payment systems.
Decentralized Financial Systems (DeFi): Methods and devices that facilitate decentralized trading, lending, borrowing, and yield generation. Impacting decentralized exchanges (DEXs) like Uniswap, SushiSwap, and similar platforms.
Smart Contracts: Implementation of self-executing contracts on blockchain networks, used to automate agreements and enforce conditions without intermediaries. Essential for platforms such as Ethereum, Cardano, and other Layer-1 and Layer-2 blockchain protocols.
Tokenized Asset Trading: Methods for creating, transferring, and trading tokenized assets, including cryptocurrencies, non-fungible tokens (NFTs), and digital securities. Platforms like OpenSea, Rarible, and asset tokenization platforms may fall within the scope.
Cryptographic Security and Wallet Systems: Systems for securing digital assets using cryptographic methods, including cold storage, multi-signature wallets, and multi-party computation (MPC). Potential overlaps with services offered by companies like Coinbase, Kraken, Gemini, and institutional custody providers.
Decentralized Identity and Verification Systems: Technologies for managing and verifying digital identities on decentralized networks, including for KYC (Know Your Customer) purposes. Likely touching on identity solutions like Civic, BrightID, and Blockstack.
Blockchain-Based Voting and Governance: Systems for implementing decentralized voting, governance, and consensus mechanisms, foundational to DAO (Decentralized Autonomous Organizations). Relevant to governance platforms like Aragon, Snapshot, and MakerDAO.
AI Economic Agentic Computing: First introduced by the VeADIR Platform refers to the application of autonomous agents in economic systems, where software entities can make decisions, negotiate, and execute transactions independently. These agents use artificial intelligence to analyze market data, predict trends, and optimize economic activities like trading, resource allocation, and supply chain management. Used by OpenAi, Claude Sonnet, Meta and xAI.

The societal value of these patents to disrupt traditional financial models and fintech business practises, by essentially removing the banks as middlemen, create significant economic incentives to suppress his work.

True Decentralization

Current Decentralized Exchanges (DEXs) often fall short of being truly decentralized due to various practical and structural limitations. Although DEXs leverage blockchain technology and smart contracts to enable trading without a central authority, aspects like governance, liquidity, and user interface can introduce centralization. Governance tokens might be concentrated in the hands of a few, influencing decision-making unevenly. The frontend, controlled by developers, represents a centralized point of control or potential failure. Liquidity pools can be dominated by a handful of large providers, leading to centralized liquidity dynamics. Some DEXs implement regulatory compliance like KYC/AML, which inherently involves centralized oversight. The use of layer-2 solutions for scalability might also undermine decentralization if not fully autonomous.

However, patents like US11196566B2 and US11895246B2 could pave the way for true decentralization by introducing innovations in blockchain interoperability and decentralized governance mechanisms. These patents potentially offer solutions for more evenly distributed control over exchange operations, enhancing the autonomy and distribution of decision-making, thus moving closer to genuine decentralization in the DEX ecosystem, which can be expanded to other industries like Healthcare, Supply Chain, or any other industry that trades value.

Who is Reggie Middleton?

Reggie Middleton, through his BoomBustBlog, became a notable figure in financial analysis, particularly for his early and accurate predictions regarding the collapses of Lehman Brothers and Bear Stearns during the 2008 financial crisis. His blog was renowned for providing in-depth, contrarian insights into economic trends, investment opportunities, and corporate vulnerabilities. Reggie won the CNBC's stock draft consecutively for two years, and appeared on major financial news networks like CNBC, BBC and Bloomberg where he discussed market trends, his forecasts, and the implications of financial strategies adopted by major firms. His track record has undeniably positioned him as a significant voice in the financial commentary space.

Reggie's work gained public attention when he appeared on the Keiser Report and CNBC in 2014, premiering his innovations built on the Bitcoin blockchain called "Ultracoin", two years before Ethereum captured the crypto limelight.

His vision was to create sound markets for a financial ecosystem where loans could be issued without banks, trades executed without exchanges, and contracts enforced without lawyers, aiming to disintermediate traditional finance by removing the middleman that doesn't add value.

In 2014, Reggie pioneered a simple Apple trade using a Pure Bitcoin Wallet: The Ultracoin Client.

Ultracoin later renamed VERI short for “Veritaseum” meaning "of truth", was the

first to market in tokenizing precious metals, offering VeGold, VeSilver and even tokenized fiat currencies or so called "Stablecoins". Veritaseum also introduced VeRent creating yield through P2P lending, and the revolutionary VeADIR platform, an autonomous, blockchain-powered research platform that independently evaluates and acts on dynamic research in real-time, communicates in machine language, and operates by purchasing, analyzing, and distributing insights on various assets while allowing VERI token holders to access and trade this research.

In 2018 he created the worlds first Gold Denominated Blockchain Mortgage

with traditional written note, mortgage as well as a smart contract on a public blockchain, both of whom incorporate each other by reference. The transaction had traditional title insurance and the note was recorded with the county clerk. The mortgage was denominated in Veritaseum's VeGold product, a digital form of gold in bearer form, fully transferable and redeemable upon demand.

Merely a few examples of groundbreaking products offered by Veritaseum.

Coinbase's Challenge: The Patent Infringement Suit

Coinbase, a dominant force in the cryptocurrency exchange market, enlisted the services of Perkins Coie, one of the largest patent law firms, to contest the validity of Reggie Middleton's patents.

They launched an Inter Partes Review (IPR) at the Patent Trials and Appeals Board (PTAB), arguing that Middleton's patents lacked novelty. An overwhelming 85% of patents are invalidated through this process. However, Coinbase's challenge was denied along with the appeal, thereby upholding and strengthening the validity of Reggie's patents.

This IPR challenge came after Veritaseum sued both Coinbase and Circle USDC for $350 million each over patent infringement. Unfortunately, Reggie's patent attorney and close friend passed away during this suit, so the cases has been dismissed without prejudice, meaning they can be negotiated or the cases reopened at any time. This leaves Coinbase in a precarious position, especially if shareholders have not been properly informed of this risk.

This lawsuit details how Coinbase's infrastructure, specifically its Ethereum and Solana validator nodes, engage with client devices to facilitate transactions. Exhibit #3 meticulously outlines the patent's claims, detailing the roles of computing devices, the use of memory for key pair storage, network interfaces for transaction terms, and the generation and dissemination of transaction data records. It provides concrete examples such as the processing of NFT transactions on Ethereum and the management of transaction fees on Solana, supported by in-depth references to code and API interactions. Furthermore, the exhibit explains the verification of transactions through an external state, illustrating how Coinbase's technology aligns with the patent's principles for decentralized transaction processing without a central authority.

SEC's Intervention: A Turning Point

In 2019, with promising negotiations on the horizon with both the Jamaican and the Nigerian Stock Exchanges for digital asset platforms, Reggie's world was turned upside down.

The SEC accused Reggie of fraud, alleging he misled investors about the functionality of Veritaseum's VeADIR platform, which the SEC ordered to be shut down following a live demonstration. The SEC also made claims on the validity of Reggie's patent applications, which have since been approved by both the USPTO and the Japan Patent Office. Oddly enough, the SEC may actually infringe on these very patents through the disgorgement and storage of seized crypto tokens.

Despite Veritaseum's cooperation with the SEC over a two-year period, along with a detailed response addressing the SEC's allegations, and not one token holder claiming to be defrauded, these allegations still led to a Temporary Restraining Order (TRO) that froze millions in assets, destroying the company's operations, and forcing a consent judgment "neither confirming or denying the allegations". The SEC would top it all off with a gag order that barred Reggie from publicly discussing the matter.

Keep in mind, the SEC is claiming jurisdiction by calling Utility Tokens "Digital Asset Securities" but recently SEC Commissioner @HesterPeirce stated:

"...by using imprecise language we've been able to suggest the token itself is a security, apart from that investment contract, which has implications for Secondary Sales, it has implications for who can list it...

We've fallen down on our duty as a regulator not to be precise. So, tucking into a footnote that yes we admit that now that the TOKEN ITSELF IS NOT A SECURITY, that is something we should have admitted long ago and then started wrestling with the difficult questions."

This calls into question if the SEC even had jurisdiction to bring forth this case to begin with. The Veri Community would later challenge the SEC's unproven allegations against Reggie with

a Dossier supporting the Vacating or Setting Aside of this case, and suggesting possible misconduct by the SEC.

Allegations of SEC Misconduct:

Misrepresentation of Facts: Assertions that the SEC deliberately mischaracterized the
functionality of the VeADIR platform, along with the patents and their value, by labeling them as lacking novelty and part of fraudulent activities.
Misleading Evidence: The SEC's use of declarations from Patrick Doody and Roseann Daniello, which contained misleading information about the personal ownership of a Kraken account used to misappropriate funds. Doody would later correct his statement, but the SEC did not update the court with this new information, potentially misleading the judicial process.
Conflict of Interest: Doody's undisclosed financial interests in the digital asset space through Lily Pad Capital LLC could suggest a bias in his testimony, which was pivotal in obtaining the TRO.
Coercion and Intimidation: Witnesses like Lloyd Cupp and John Doe provided affidavits claiming coercion by SEC attorneys to alter their testimonies, pointing towards witness tampering and intimidation.

FOIA Responses: The SEC's FOIA department initially denied any communications with Kraken, only later admitting to subpoena issuance, suggesting an attempt to obscure facts.
RICO Allegations: A 95 page RICO Dossier, supported by extensive evidence, alleges that the SEC's actions could resemble an organized crime syndicate, with systemic coercion, misrepresentation, and procedural misconduct aimed at Reggie Middleton.
Bar Complaint: The Veri community lodged a Bar Complaint against the SEC's Lead Attorney
over the use of misleading evidence, coercion and intimidation of witnesses.

Summary Articles of the B ar Complaint and RICO Dossier

Comparisons with the SEC Misconduct in the DEBT Box Case

The DEBT Box case shares a troubling parallel with the Veritaseum case. In both cases a Temporary Restraining Order (TRO) freezing funds was issued using dubious evidence which suppressed the ability to defend themselves. This behavior was already admonished by five US Senators

in a letter to Commissioner Gary Gensler in which the SEC presented misleading claims in this now high-profile cryptocurrency case.

"Regardless of whether Commission staff deliberately misrepresented evidence or unknowingly presented false information, this case suggests other enforcement cases brought by the Commission may be deserving of scrutiny. It is difficult to maintain confidence that other cases are not predicated upon dubious evidence, obfuscations, or outright misrepresentations."

Given the similarities in alleged procedural misconduct between the cases, it raises systemic questions about the SEC’s litigation approach in cryptocurrency matters.

This parallel underscores a potential agency-wide issue that could involve either implicit biases against crypto companies or an explicit strategy to pursue aggressive, potentially misleading tactics in court.

Is The Fox Guarding the Hen House?

In a significant development, the Attorney Grievance Committee (AGC) has decided to forward a complaint against SEC attorney Jorge Tenreiro to the SEC's Office of General Counsel (OGC) for investigation. This controversial move suggests a potential conflict of interest, given that the OGC is part of the SEC, the very agency where Tenreiro was recently promoted to Chief Litigation Counsel. The complaint, filed by the Veri community, accuses Tenreiro of misconduct including alleged coercion, witness tampering, and misrepresentation during SEC investigations. The Veri Community argues that this decision undermines the integrity of the legal process, as the OGC's role is to provide legal advice and defend the SEC, not to independently investigate its own employees. This raises questions about the impartiality and transparency of the disciplinary process for attorneys, especially when it involves high-profile figures like Tenreiro.

"As noted in re Rowe, 80 N.Y.2d 336 (1992), the public’s confidence in the legal profession depends on transparent and impartial disciplinary processes. Delegating oversight to the SEC, where Mr. Tenreiro remains a senior official and where the OGC has a clear institutional stake, jeopardizes this confidence and risks the appearance of protectionism.”

The VeriDAO has submitted a response letter to the AGC along with creating a PDF generator
to help the estimated 100 complainants and anyone else interested in requesting the AGC to reconsider this action.

Legal and Judicial Trials

The legal battles would only continue for Reggie. The case of Hall v. Middleton, in which Hall, a 1% shareholder sued Reggie, raises concerns of judicial bias and procedural mishandling. In this case, Reggie was denied Due Process and barred from presenting crucial evidence or calling witnesses due to his former attorneys' "Office Failures" that missed deadlines to submit evidence without the knowledge of Reggie or the firm Brundidge & Stanger that outsourced his counsel as detailed in their affirmations.

"In my many years of practice it is a rare instance where I have witnessed an attorney intentionally not file critical documents as required by Court Order without the permission or knowledge of his client, who had an established and fully developed attorney client-relationship with said attorney, and then misrepresent that the requirements of the Court Order were being satisfied. This is one of those instances and I hope not to see another."
~ Carl Brundidge

The judge ruled that Reggie must:

Pay a $1M fine to his company Veritaseum Inc., in which he owns 99%
The plaintiff was awarded costs of $495k against Veritaseum Inc.
The Judge ordered Patents (filed before the creation of Veritaseum Inc.) to be assigned to the company without compensation.

Attorney's "Office Failures":

Sheridan England missed critical deadlines, resulting in the striking of exculpatory evidence. England’s inaction or inadequate defense exacerbated Middleton’s legal vulnerability, directly leading to adverse outcomes.

Judge Schecter’s Conduct:

Ignoring Exculpatory Evidence: Despite knowledge of its existence, Schecter struck Middleton’s post-trial memorandum.
Procedural Bias: The judge’s decisions systematically favored Hall, including allowing him to collect attorney fees from Middleton personally, contrary to the principles of derivative law.
Forced Patent Transfers: Schecter’s order to transfer patents to an underfunded entity (Veritaseum) which were court restrained by the same judge, rendering them defenseless against attacks and IP theft.

This ordeal was compounded when Reggie was held in Contempt for using personal funds (while Veritaseum’s funds were court-restrained) to successfully defend his patents against an IPR challenge by Coinbase in the PTAB of the USPTO in an attempt to invalidate these patents. The Forced Patent Expropriation to Veritaseum without compensation or the ability to defend them could be seen as coordinated as it benefited very large competitors seeking to avoid licensing fees or infringement claims, or possibly even IP Theft.

Judicial Complaint: A formal complaint has been filed with the NYS Commission on Judicial Conduct by the Veri Community.

ETHgate: The Broader Conspiracy Allegations

Parallel to Middleton's struggles, "ETHgate" emerged, involving allegations by Ethereum co-creator @StevenNerayoff. Nerayoff claimed a government conspiracy aimed at controlling or monopolizing cryptocurrency development by targeting key figures. This narrative suggested that by attacking innovators (like Reggie Middleton as the Veri Community contends), the SEC might have indirectly cleared a path for Ethereum, which, despite its decentralized claim, benefited from a regulatory environment less scrutinized than its competition.

The term "ETHgate" encapsulates the belief that Ethereum's "Free Pass" from regulatory scrutiny might not just be due to its technological merits but also due to strategic regulatory maneuvers, where attacking smaller or less established DeFi projects could safeguard larger, more influential platforms like Ethereum.

Back in 2021, @JohnEDeaton1 from @CryptoLawUS explained XRP's side of Ethereum's "Free Pass". More recently, further SEC RICO Claims are insinuated in "RIGGED from the start" a documentary by @Fruition_News , along with posts by @KuwlShow and the XRParmy involving the SEC, Ethereum, a16z, and Consensys surrounding the Bill Hinman speech. Active FOIA requests by @EleanorTerrett seek to shed light on meetings between Hinman and Ethereum members.

Given the SEC protection of ETH and the high probability of Ethereum infringing on Reggie Middleton's patents as meticulously detailed in Exhibit #3 of the Coinbase case, is it ridiculous to believe Reggie Middleton could have been targeted?

Community Support: The Backbone of Resilience

Despite the SEC's narrative labeling them as "The Defrauded," the Veritaseum community rallied around Reggie.

SmartMetal with embedded NFT avalaible through VeriDAO.io

Financially devastated and with his funds frozen, Reggie faced foreclosure and was threatened with jail time after contempt charges for defending his patents using personal funds. In a remarkable show of support, the Veri Community rallied, raising an impressive $149,000 in less than two weeks to cover the fine while the case is under appeal.

They funded legal battles largely through donations and more recently with innovative means like NFT silver rounds called SmartMetal using Reggie's patented technologies, underscoring their belief in his vision. The first minted round was auctioned off for an astonishing $14,000 won by "M S"

"There is no better witness to the veracity of any defense than the alleged defrauded defending the alleged fraud at their own expense"
~ The Veri Community

This community support was not just financial but also moral, with efforts such as an Amicus Brief in the case against XRP, a No Action Letter (NAL) seeking clarity on secondary market sales of tokens, a Bar Complaint against the SEC's newly promoted Chief Litigation Counsel, and the @dao_veri's

#ProjectSunlight The SEC RICO Revelation.

A Call for a New Regulatory Paradigm

Reggie Middleton's saga is emblematic of the challenges faced by pioneers in the blockchain and DeFi arenas. His patents, now granted, underscore their foundational nature, yet the path to their recognition was marred by legal battles, suggesting a systemic issue where the regulatory framework might not fully comprehend or support emerging tech. His resilience, supported by an unwavering community and the validation of his intellectual property, underscores the need for a regulatory environment that fosters rather than stifles innovation. As blockchain technology continues to evolve, Reggie's story serves as a critical reference for balancing innovation with legal and ethical governance, ensuring that the future of finance remains open to all, not just those with the resources to navigate the legal maze.

For more information visit https://veridao.io/

I know what everyones question is, "HOW CAN I GET MY HANDS ON THE $VERI TOKEN BEFORE EVERYTHING GETS REVERSED AND RELEASED BACK TO THE COMMUNITY?"

Your in luck: Mark is a trusted source, longtime Veri Vet that beta tested the VeADIR platform. Simply follow the thread below. I highly advise picking up a few, and tuck them away! This is the token that could literally FLIP BITCOIN $100k and beyond!

The information provided in this video, including but not limited to documents regarding legal matters, is for informational purposes only. It does not constitute legal (or any other) advice, and no warranties or representations are made regarding the accuracy, completeness, or fitness of the information for any specific purpose. VeriDAO and its operators do not act as attorneys or legal, financial or technical professionals or advisors and are not responsible for any actions taken or decisions made based on the content provided. Users should seek independent legal counsel for any legal advice or guidance. By watching this video, you agree that VeriDAO and its operators shall not be held liable for any damages or legal consequences arising from the use or misuse of the information contained herein.

Link

Disclaimer:

The content provided in this document is intended strictly for informational and educational purposes only. This document constitutes a research opinion and should be regarded as such. All claims, statements, allegations, and opinions contained within are based on publicly available information and are allegations unless and until proven in a court of law. The authors expressly disclaim any representation or warranty regarding the truthfulness, accuracy, completeness, fitness for a particular purpose, or durability of the information contained herein.

The authors of this document are not licensed attorneys or legal professionals and do not claim to provide legal, financial, or professional advisory services. Nothing in this document should be construed as legal advice, legal opinion, or any form of licensed advisory counsel. If you require legal assistance or professional advice, you are strongly encouraged to consult a licensed attorney or qualified expert in the relevant field. The authors are laypersons presenting research-based opinions, and as such, this document should not be relied upon to make any decisions of legal, financial, or professional significance.

The authors make no guarantees, express or implied, regarding the completeness or reliability of the information presented. No warranties of any kind are offered regarding the accuracy, validity, timeliness, or completeness of any information within this document. The information may contain errors or inaccuracies, and any use of it is entirely at your own risk.

Furthermore, this document may contain statements of belief, criticism, or commentary, and all such statements are offered solely as opinions protected under the principles of free speech. The authors disclaim liability for any interpretation that may be construed as libel, slander, or defamation, as the document aims to present alleged facts and subjective opinions for educational research purposes only. All statements about individuals, organizations, or entities should be understood as unproven allegations, and readers are urged not to interpret them as established facts.

The authors will not be liable for any damages, losses, or legal consequences that arise from the use, misuse, or reliance on the information provided herein. No responsibility is assumed for any actions or decisions that any party may make based on this document. The reader assumes full responsibility for any and all consequences that may arise from using the information contained in this document.

By accessing and using this document, you agree that neither the authors nor any affiliated parties shall be held liable for any direct, indirect, incidental, special, consequential, or punitive damages resulting from your use of this information. The authors reserve the right to update or revise the information in this document at any time without notice, but they are under no obligation to do so.

Finally, any statements regarding individuals, entities, or organizations are not intended to malign, defame, or harm the reputation of those mentioned. Any resemblance to real individuals or incidents is purely coincidental, unless otherwise explicitly stated, and the authors urge readers to exercise caution and discernment when interpreting the information presented.

This document is a work-in-progress, part of an ongoing investigative process, and should not be treated as definitive or final. Readers are encouraged to independently verify the information and seek professional advice before acting on any information herein.

Read full Article

thedinarian@thedinarian

February 15, 2025

📰 Digital Asset Weekly 📰

This week, global trade tensions and Fed policy shifts kept crypto markets on edge, while tokenization of real-world assets (RWAs) gains momentum. In this issue:

FTX creditors get refunds.
MicroStrategy rebrands as Strategy.
Tokenization is scaling fast.
This week's digital asset market briefing.

Digital Asset Market Briefing

Crypto market sentiment gauge showing fear at 48, with Bitcoin, Ethereum, and XRP price changes over the past week. — Digital asset market development: February 4—9, 2025

The crypto market remained under pressure last week, with total market cap declining from $3.36 trillion to $3.28 trillion. Bitcoin fell nearly 3%, while its dominance climbed from 56.3% to 58%, reflecting a shift away from altcoins. Ethereum dropped to 10% market share (from 10.8%), with major altcoins following suit, signaling cautious sentiment.

Macroeconomic Headwinds Weigh on Markets

The primary catalyst for the downturn was ongoing global trade tensions. U.S. President Trump’s announcement of a 25% tariff hike on Canadian and Mexican imports triggered panic across markets, with Mexico and Canada responding with retaliatory tariffs. Bitcoin briefly hit $92K, while Ethereum dipped just above $2.1K before recovering slightly. Meanwhile, whale accumulation surged, with XRP whales buying 520 million tokens, suggesting potential accumulation despite weak sentiment (Fear Index: 48).

Shifting Focus: Fed Policy & Treasury Yields

Comparison of historical Fed decisions and their impact on treasury yields, showing rate cut trends over multiple cycles. — Comparison of historic Fed decisions and net changes in yield (in percentage points) from day of first rate cut (Source: Reuters)

Amid rising market uncertainty, U.S. Treasury yields have become the administration’s key focus. The 10-year yield declined from 4.8% to 4.4%, easing pressure on the Fed to cut rates. Treasury Secretary Scott Bessent’s focus on bond markets signals a shift in economic priorities, potentially stabilizing borrowing costs but adding complexity to Fed policy.

Market Sentiment & Outlook

Graph displaying daily crypto exchange trading volume with a 7-day moving average, showing recent spikes in market activity. — Daily exchange volume (7-day moving average) (Source: The Block)

Despite the downturn, crypto trading volume peaked at $90 billion daily, up from $65 billion the prior week, indicating heightened activity. While macro uncertainty persists, rising whale activity suggests institutional interest remains strong, possibly setting the stage for a recovery.

Top 3 News

FTX Creditors Get 120% Payout

FTX creditors receive 120% repayment, but stablecoins are used instead of Bitcoin or Ethereum as per court ruling.

FTX creditors with claims up to $50,000 will receive full repayment plus 9% annual interest by February 18, 2025. However, the bankruptcy court denied requests for repayment in Bitcoin or Ethereum, opting for stablecoin payouts instead.

MicroStrategy Rebrands to ‘Strategy’

MicroStrategy is now Strategy, marking its transformation into the world’s first Bitcoin Treasury Company. The firm holds 470,000+ BTC worth $30 billion and plans to raise $42 billion for further accumulation.

Fed Explores Tokenized Reserves

Fed Governor Waller confirms ongoing research into tokenized bank reserves under Project Agorá for cross-border payments.

Fed Governor Waller confirmed the U.S. will continue exploring tokenized bank reserves in Project Agorá, aiming to improve cross-border payments without issuing a wholesale CBDC.

What Else Happened?

The American House released a draft Stablecoin Bill, sparking comparisons with the Senate’s GENIUS Bill as regulatory debates intensify.
BlackRock plans to list a Bitcoin exchange-traded product (ETP) in Europe, expanding institutional access to BTC.
Crypto exchange Gemini is exploring an IPO, signaling renewed interest in public markets for crypto firms.
Coinbase CEO urges a blockchain-based U.S. Treasury after Musk’s DOGE agency reportedly saved taxpayers $36 billion.
Tether’s CEO warns that quantum computing could unlock lost Bitcoin wallets—some fear it could destabilize Bitcoin’s scarcity model.

Chart of The Week

Survey results from JP Morgan showing 71% of institutional traders have no plans to invest in crypto, while 13% currently trade digital assets.

This Week’s Focus

Redefining Finance: The Rise of Tokenized Real-World Assets

Chart showing the market capitalization growth of tokenized real-world assets (RWAs) by category, highlighting the rise in government securities and commodities. — Development of real-world asset market capitalization (Source: The Block)

Tokenization is reshaping financial markets, unlocking liquidity, streamlining transactions, and enabling fractional ownership. The market capitalization of tokenized Real-World Assets (RWAs) has surged to $4.5 billion, driven by growing adoption in government securities, commodities, and asset-based finance. Institutional giants like JPMorgan, UBS, and HSBC are actively exploring tokenization, while regulatory initiatives in the EU, UK, and APAC signal accelerating global acceptance.

Chart illustrating the surge in German tokenized securities, driven by ECB blockchain settlement trials and regulatory advancements. — German tokenized security issuances development (Source: The Ledger)

Germany’s digital securities market underscores this momentum, with tokenized issuances surging 162%—from €235M in early 2024 to €615M in the second half. On the infrastructure front, Ondo Finance’s launch of a layer-1 blockchain for institutional tokenization highlights the growing demand for scalable and compliant solutions.

RWA Opportunities:

Fractional Ownership & Liquidity: Tokenization makes traditionally illiquid assets (real estate, private equity, bonds) more accessible to investors.
Automated & Cost-Effective Settlement: Blockchain reduces intermediaries, cutting costs and accelerating transactions.
Security & Transparency: Smart contracts enforce compliance and reduce fraud risks.

RWA Challenges:

Regulatory Uncertainty: Despite progress in Singapore, Hong Kong, and the UK, global frameworks remain fragmented.
Infrastructure & Interoperability: Seamless integration between blockchains and traditional finance is still evolving.
Institutional Hesitation: Compliance and stability concerns slow widespread adoption.

Why This Matters

With $16 trillion in tokenized assets projected by 2030, the financial landscape is shifting. From programmable payments to tokenized real estate and commodities, tokenization is redefining asset ownership and market efficiency. However, regulatory clarity and scalable infrastructure will determine its full potential.

Key Takeaways

Institutional adoption is accelerating, with major banks driving real-world trials.
Regulation and interoperability remain the biggest hurdles to widespread implementation.
Government securities, real estate, and commodities are leading the tokenization wave.

Link

Read full Article

What Is Payment Finance (PayFi)?

Key Takeaways

This is where Payfi comes in.

Understanding PayFi: DeFi Meets Payments Financing

Time Value of Money (TVM): PayFi's Core Concept from The Financial Industry

Solana With PayFi: Transforming Global Financial Markets

1. Performance

2. Capital Liquidity

3. Talent Liquidity

Potential Applications Of PayFi

Buy Now Pay Never

Account Receivable

Creator Monetization

Notable Players In PayFi Space

1. Huma Finance

Core Focus

2. PolyFlow

Core Focus

3. TLay

Core Focus

Conclusion

Attempted Theft of the World's Most Valuable Property, SEC Lawfare & The ETHgate Scandal

The Myth of Open Source

Validating Inventorship

The Genesis of Decentralized Finance

His patents cover:

True Decentralization

Who is Reggie Middleton?

Coinbase's Challenge: The Patent Infringement Suit

SEC's Intervention: A Turning Point

Allegations of SEC Misconduct:

Comparisons with the SEC Misconduct in the DEBT Box Case

Is The Fox Guarding the Hen House?

Legal and Judicial Trials

Attorney's "Office Failures":

Judge Schecter’s Conduct:

ETHgate: The Broader Conspiracy Allegations

Community Support: The Backbone of Resilience

A Call for a New Regulatory Paradigm

Citi and digital assets

Digital Asset Market Briefing

Macroeconomic Headwinds Weigh on Markets

Shifting Focus: Fed Policy & Treasury Yields

Market Sentiment & Outlook

Top 3 News

FTX Creditors Get 120% Payout

MicroStrategy Rebrands to ‘Strategy’

Fed Explores Tokenized Reserves

What Else Happened?

Chart of The Week

This Week’s Focus

Redefining Finance: The Rise of Tokenized Real-World Assets

RWA Opportunities:

RWA Challenges:

Why This Matters

Key Takeaways