Introducing the VeChain Multi-Party Payment Protocol
Mass adoption of blockchain solutions by solving real-world problems is the purpose behind VeChain‘s developments. VeChain is built on the belief that technology that solves real problems gets adopted by businesses and end users. In that regard, not every solution addresses the real issue as it is seen as too advanced, difficult for implementation, or applied to the wrong scenario. We do not try and guess what the bottleneck for blockchain’s mass adoption is, instead we conducted interviews to deep dive into the thoughts of more than 100 major enterprises to appropriately define what the real problem is. Though VeChain has a solution for TPS, the bottleneck of adoption is characterized by the lack of practical use and application to the issues of enterprises.
Just as our CEO, Sunny Lu, suggested in his letter to the community, VeChain created a series of innovative technological solutions that are part of the base structure of the VeChainThor Blockchain. We believe that these innovative features will increase the fundamental value of our public blockchain tremendously. When utilized in clever ways by developers, these developments are the keys to solve significant bottlenecks of public blockchain mass adoption by end users, including enterprises.
In today’s release, we want to introduce one of our tools. This tool is a technical solution for payment types, called the VeChain Multi-Party Payment Protocol or MPP. MPP is designed to facilitate transactions between multiple parties even if data is being moved from one non-token owner to another non-token owner. Therefore, everyday users will use the VeChainThor Blockchain with or without the knowledge of it. MPP enables seemingly no change to the end user experience and is what we strive for after our research with enterprise leaders.
What is MPP?
MPP is a global patent pending payment model within the underlying base protocol of the VeChainThor Blockchain, we define it as a tool within our Oracle Enabler tool allowing parties other than the sender involved in an on chain transaction to opt to pay for the network fees of this transaction to the blockchain.
What problem is MPP solving?
One of the major obstacles for ordinary people (end users) and enterprises adopting a public blockchain is the uncertainty and complexity in dealing with crypto assets. On the one hand, users have to face the high price volatility when obtaining cryptocurrency from the market; On the other hand, they need to understand related technical concepts and become familiar with various tools such as wallets, exchanges, transfers, etc. to be able to use/manage their cryptocurrency and assets. For enterprises, most won’t go out of their way to use cryptocurrencies and cannot derive policy from the structure of proposed payment models of other blockchains.
Why is this a massive problem for mass adoption of public blockchain?
In some regards, the solutions put in place by early blockchain models to combat issues of governance and payment, created additional problems. One of the most straightforward issues arisen is the necessity of every transaction to include a network fee paid in cryptocurrency. In this case, enterprises are not able to pay for the fees of their non-asset holding customers and therefore are met with hurdles in regards to proving data ownership and providing value transfer of everyday users. Additionally, there aren’t real solutions in place by the market to seamlessly integrate these users onto the chain in a meaningful way. Through MPP, we can claim this as a solution to both the integration of new users and multi-party payment procedures removing significant obstacles to public blockchain adoption.
How does MPP solve issues other public blockchains cannot?
For the existing blockchain networks such as BitCoin and Ethereum, the answer to multi-party payments is non-existent. This is because whenever we use the blockchain services, whether it is transferring cryptocurrency, upload data, and executing smart contracts, we have to send transactions to the network and pay for the transactions using our own account balances.
In the VeChainThor Blockchain, we recognize this critical problem and came up with a novel multi-layer payment model, as illustrated in the below figure. It can be seen that a VeChainThor Blockchain transaction can be paid by three different parties. They are the transaction sender, the smart contract which the transaction’s recipient, or the contract’s sponsor. When charging the transaction fee, the system does the following steps:
The system checks a) whether the sender is allowed to wave his/her transaction network fee by the smart contract developed and b) whether the smart contract’s sponsor agrees to pay the fee. If both answers are yes, it tries to deduct the fee from the sponsor’s account balance. If the fee charging fails (due to the insufficient funds available) or the second answer is no, it proceeds to Step 2.
If the first answer is yes, the system tries to deduct the transaction network fee from the ToAddress account balance. If the fee charging fails or the answer is no, it proceeds to Step 3.
The system tries to deduct the transaction fee from the sender’s account balance. If the fee charging fails, it returns an error.
In terms of the payment structure, the proposed model provides a great deal of flexibility and convenience for enterprises and the community to develop dApps as Oracles, allowing ordinary users to fill their smart contracts with real-world information on the VeChainThor Blockchain. For instance, the sponsor mechanism allows an enterprise to better work with its customers who do not want to deal with crypto assets.
An example is that a carmaker develops a full dApp on the VeChainThor Blockchain, with an Oracle, the purpose of the dApp is to collect data from its drivers. The drivers will consent the data to be written on to the VeChainThor Blockchain. Given that this is a transaction, cryptocurrency will be needed to execute. A third party, a “car maker certified” community members lead company, is the Sponsor to pay the VeThor tokens required to power this transaction, and the third party gets paid by the car maker with fiat, or other assets, in the traditional business manner. As you can see this Payment Protocol is the base protocol making it possible for ordinary people to use dApps running on the VeChainThor Blockchain just in the same way they use their non-decentralized apps. These users will not even realize that they are using a dApp in comparison to an ordinary application.
Another example is if a bag designer implants chips within their bags to prove authenticity. Throughout the entire lifecycle of the product, the transfer of data can move between the owners, even if they have never known or purchased a VeThor token. One scenario of an MPP solution allows for a bag’s new owner to register on the blockchain as the owner during the purchase of the handbag. These companies can also use their VeThor tokens to enable owners to upload images, repairs, status, whatever they desire, to the blockchain in association with the bag. When the bag owner decides to pass ownership of the bag to another party, they can do so through various providers. In this scenario some bag companies may opt to build a website that allows users to verify the transaction without individually needing VeThor tokens, the bag designer can use theirs to provide the service. Another option is to let this occur on second-hand markets that facilitate the transfer creating entirely new marketplaces. The bag owner can always verify or transfer the rights of the bag to a new party and given the nature of VeVID and MPP, that right cannot be removed from them, even if they have never held a VeThor token.
VeChain aims to bring public blockchain mass adoption through various tools and protocols that are entirely different than other projects. The goal of the VeChainThor platform is always to make the processes of entities simpler to push public blockchain adoption. This cannot exist unless everyday users can use the VeChainThor Blockchain with or without knowledge of it. The goal is that there is no change in the end users experience, and that is what MPP enables us to provide. In essence, we want to disrupt the current power structure of the world, without causing any disturbance so that the current powers won’t resist. By applying solutions such as MPP into enterprises use, we can protect the rights of all users in ways the current systems cannot.
微乎微乎，至于无形；神乎神乎，至于无声，故能为敌之司命。 — — 孙子兵法
Be extremely subtle, even to the point of formlessness. Be extremely mysterious, even to the point of soundlessness. Thereby you can be the director of the outcome. — Sun Tzu’s Art of War