The Paycrest protocol ecosystem consists of four main participant types, each with specific roles and responsibilities. Understanding these participants is crucial for building on the protocol.

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Sender

A KYC-verified entity that initiates either a fiat-to-stablecoin or stablecoin-to-fiat transaction.

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Characteristics

  • KYC Required: Must complete identity verification (KYC/KYB)
  • API Access: Uses the Sender API to create orders or can interact directly with the Gateway contract
  • Fee Structure: Zero protocol fees, with optional sender fees for business monetization
  • Flexibility: Can be smart contracts, dApps, or traditional applications

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Responsibilities

  • Order Creation: Specify amount, token, recipient, and rate
  • Recipient Information: Provide accurate bank account or wallet details
  • Compliance: Maintain KYC status and regulatory compliance
  • Monitoring: Track order status and handle webhooks
  • Fee Management: Optionally set sender fees to monetize their service

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Use Cases

  • Remittance Services: Send money to family abroad
  • Business Payments: Pay suppliers in different currencies
  • DeFi Applications: Bridge between crypto and traditional finance
  • E-commerce: Accept crypto payments and settle in fiat
Sender Fee Model: Sender businesses can optionally charge fees to their users by setting senderFee and senderFeeRecipient when creating orders. This allows businesses to monetize their Paycrest integration while keeping the protocol itself fee-free for end users. The sender fee is distributed to the specified recipient upon successful order settlement.

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Recipient

The beneficiary of the transaction who receives funds without interacting with the protocol directly.

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Characteristics

  • Passive Role: No direct protocol interaction required
  • Multiple Options: Can receive fiat or stablecoins
  • Flexible Delivery: Bank accounts, mobile wallets, or crypto wallets
  • Zero Complexity: Doesn’t need to understand blockchain technology

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Delivery Methods

  • Bank Transfer: Direct deposit to local bank account
  • Mobile: Transfer to mobile wallet (M-Pesa, etc.) or mobile payment systems (UPI, PIX)
  • Crypto Wallet: Receive stablecoins in specified wallet
Note: Cash pickup is not supported. All off-ramps are to fiat accounts or wallets.

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Example Scenarios

  • Family Remittance: Receive USD in local bank account
  • Freelancer Payment: Get paid in local currency for crypto work
  • Business Settlement: Receive supplier payments in preferred currency
  • Investment Returns: Convert crypto gains to fiat

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Provider

A KYC-verified participant that supplies fiat liquidity in exchange for stablecoins or provides stablecoins in exchange for fiat.

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Characteristics

  • Liquidity Supply: Provides fiat or crypto liquidity
  • KYC/KYB Required: Business verification for compliance
  • PSP Integration: Connects to Payment Service Providers
  • Competitive Rates: Sets rates based on market conditions

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Responsibilities

  • Order Fulfillment: Execute payments to recipients
  • Rate Management: Set competitive rates for currency pairs
  • Compliance: Maintain regulatory compliance and reporting
  • Infrastructure: Operate reliable payment infrastructure

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Revenue Model

  • Bid-Ask Spreads: Profit from currency exchange spreads
  • Volume Incentives: Earn bonuses for high transaction volume
  • Quality Bonuses: Rewards for reliable fulfillment
  • Geographic Premiums: Higher rates for underserved markets

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Provider Types

Traditional PSPs

  • Banks and financial institutions
  • Money transfer operators
  • Payment processors
  • Mobile payment providers

Crypto-Native Providers

  • Crypto exchanges
  • DeFi protocols
  • OTC desks
  • Crypto payment processors

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Aggregator

A KYC-verified entity that coordinates the entire order routing process and ensures protocol efficiency.

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Characteristics

  • Order Matching: Matches orders with suitable providers
  • Quality Assurance: Ensures reliable order fulfillment
  • Compliance Oversight: Manages KYC and regulatory compliance
  • Infrastructure: Operates high-availability nodes

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Responsibilities

  • Order Indexing: Monitor blockchain for new orders
  • Provider Management: Maintain provider registry and ratings
  • Order Assignment: Match orders with optimal providers
  • Settlement Coordination: Coordinate multi-provider settlements
  • Compliance Verification: Verify KYC and regulatory compliance
  • Dispute Resolution: If an order is not fulfilled, it is automatically refunded. The aggregator does not handle disputes directly. If an order is stuck, communication between senders and providers may occur via a decentralized messaging protocol (e.g., XMTP).

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Aggregator Functions

1

Order Detection

Monitor Gateway contract for new payment orders
2

Provider Matching

Find suitable providers based on rates, limits, and availability
3

Order Assignment

Assign orders to providers with optimal conditions
4

Fulfillment Monitoring

Track order fulfillment and validate completion
5

Settlement Coordination

Coordinate onchain settlement and fee distribution

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Aggregator Types

  • Protocol Aggregators: Official Paycrest aggregator nodes
  • Third-Party Aggregators: Independent aggregator services
  • Hybrid Aggregators: Providers that also run aggregator nodes

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Participant Relationships

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Sender → Aggregator

  • Order Submission: Senders submit orders through API
  • Status Updates: Receive real-time order status updates
  • Webhook Notifications: Get notified of order lifecycle events

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Aggregator → Provider

  • Order Assignment: Aggregators assign orders to providers
  • Rate Management: Providers set competitive rates
  • Fulfillment Coordination: Coordinate payment execution

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Provider → Recipient

  • Payment Execution: Providers execute payments to recipients
  • Settlement Confirmation: Confirm successful payment delivery
  • Compliance Reporting: Report transactions for regulatory compliance

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Key Benefits

For Senders

  • Zero transaction fees
  • Global reach with local delivery
  • Real-time status tracking
  • Automated compliance

For Recipients

  • No technical knowledge required
  • Multiple delivery options
  • Fast settlement times
  • Competitive exchange rates

For Providers

  • Access to global liquidity
  • Automated order matching
  • Transparent fee structure
  • Quality-based incentives

For Aggregators

  • Network effect benefits
  • Quality assurance control
  • Compliance management
  • Infrastructure optimization