OKX Pay for the next crypto generation

A message from OKX CEO Star Xu

Today we're rolling out a new product for more than a hundred million people who use our app globally. We're excited to introduce version one of OKX Pay, what we believe is a first-of-its-kind crypto payment app. This sub-app will be available within our OKX app, starting with customers in select markets, with a full roll out planned over the next few months.

OKX Pay is a key element of our vision of making crypto part of daily life. Here we break down how this works along with our vision. Imagine practical self-custody and practical crypto payments, with silent rewards. Imagine a Web2-like experience on a Web3 payment app.

To start, we have to consider the history of self-custody and payments. Self custody wallets have been around since the dawn of our industry. "Not your keys, not your money," is a great concept. However, it's been historically challenging for people to use self-custody wallets given the complex nature of the user experience. For example, if you lose your keys, you lose your crypto. Estimates suggest that 3 to 4 million BTC (out of the 21 million total supply) has been permanently lost. That’s roughly 14% to 19% of the total Bitcoin supply. At today’s price (~$95,000), this equates to $200–$280 billion.

Common causes of loss:

• Lost or forgotten seed phrases or private keys

• Hardware wallet failure without backup

• Mistakenly sending to the wrong chain (e.g., sending BTC to an ETH address)

• Dead devices or drives (e.g. the famous 8,000 BTC on a hard drive in a UK landfill)

• Smart contract bugs or sending tokens to burn addresses

Crypto payments have also had their share of challenges. In the early days, people experimented with Bitcoin payments. Remember the case of Laszlo Hanyecz, who spent 10,000 BTC to purchase pizza? At current prices this would be worth ~$950M. Fast forward to today, we now have robust stablecoin ecosystems like USDT and USDC. However, it's still a challenge to use stablecoins to transact with friends or at a PoS in the same way you can use a bank card or traditional payment app. A lack of KYC wallets also makes it hard for mainstream finance to adopt this technology.

Some industry players have solved this with fully centralized wallet solutions. However, in our view, there's still critical gaps hindering mass adoption.

With OKX Pay, we want people to be able to self-custody while using their crypto (i.e. stablecoin balance) in a much easier way. Our solution is different. Let's break down our vision:

• We're making self custody more practical by splitting private key management between you and us. You can store half of your private key in your passkey wallet. The other half is with OKX. This comes with a few benefits:

  • You can easily recover your wallet if you lose your password (using ZK email recovery)

  • You don't have to save your private key on a piece of paper or hardware wallet, it's secure in your passkey

  • Your funds are always safe, no one can move them without your permission

• We're making crypto payments more practical by making them as easy as sending a message. OKX Pay will only support stablecoins starting with USDT and USDC. In due time, we will integrate other stablecoins. This also has advantages:

  • You can easily message money to anyone around the world with a few clicks

  • You can send crypto to an individual or to a group

  • All transactions have zero fees

  • Settlement is almost instant and there are no limits to how much you can send and receive (subject to necessary compliance and risk controls).

• We're introducing a new feature we're calling silent rewards where your deposits grow based on yield generated by your deposits. Key benefits are:

  • You earn rewards on your deposits from low risk onchain protocols

  • Our app does the discovery and staking for you without any action from you

  • Your deposits are not locked and you can withdraw at any time

  • Removes the ongoing management that comes with most staking solutions

The main feature of OKX Pay is its ability to be a self custody solution where customers don't need to manage a private key — a task that has traditionally been a barrier to crypto participation for many people. It's also built with industry leading compliance and security. The product's compliance layer includes know-your-customer (KYC), anti money laundering (AML), and multisignature (multisig) controls to protect customers and their funds. Meanwhile, OKX can't move any funds without strict permission from a customer. If you forget your password, account abstraction (AA) and zero knowledge (ZK) email make resetting it as easy as completing the task with your bank.

Transaction costs are zero thanks to the product's underlying X Layer infrastructure. X Layer is OKX's ZK-based layer-2 (L2) blockchain built with Polygon's chain development kit (CDK) technology. From launch, customers can also capitalize on the smart-earning feature, granting them rewards for the funds they hold.

Our vision is to also integrate PSPs like Mastercard, Stripe and others as a next step, making it easy to use our app at a merchant PoS. We plan to announce such partnerships in the near future.

I believe the bigger picture of OKX Pay's potential is most significant. OKX Pay and X Layer provide the core infrastructure we believe all financial companies will eventually need to offer their own version of self-custody services, including for payments and remittances. Financial institutions will eventually be able to develop and deploy decentralized applications (dApps) that give their own customers access to OKX Pay. As more people become comfortable transacting in crypto, demand for services will inevitably rise. We're ready to meet that demand with OKX Pay, while providing speed, efficiency, compliance and security.

In the future, all financial companies will offer some level of compliant self-custody, including payments and remittences. With OKX Pay and X Layer, we're building the infrastructure foundation for that future, a future that will see a billion more people adopt crypto and Web3.

*OKX Pay is not available in all jurisdictions.