I'm exploring embedded banking solutions to offer my users easy off-ramping and instant payments, why should I choose OffBlocks?

OffBlocks offers more than just an embedded banking solution. We have developed a protocol and infrastructure that enables complete interoperability between on-chain solutions and traditional payment networks. By choosing OffBlocks, you empower your users to instantly establish smart accounts on their preferred blockchain network. These smart accounts can seamlessly settle transactions on traditional payment networks like Visa and MasterCard, ensuring the utmost security and transparency. Our systems handle the entire lifecycle of these accounts, including identity verification, account creation, compliance monitoring, and fund transfers.

What exactly is a Smart Account?

A Smart Account is essentially a Smart Contract that holds a user's assets. It fully supports Account Abstraction, as introduced on EVM-compatible networks with ERC-4337. This means it enables smart operations like delegated transactions, spending limits, gas sponsorship, transaction batching, and more.

Are Smart Accounts fully non-custodial?

There's a common misconception that AA accounts are inherently non-custodial. Ultimately, custody of the account depends on who owns the private key. Therefore, Smart Accounts are neutral regarding custody requirements. You can choose to create Smart Accounts on behalf of your users, making them custodial, or allow your users to create and configure their accounts independently. Either way, Smart Accounts function entirely on a decentralised ledger provided by a blockchain network.

Don't users need to approve every transaction? How does transaction delegation work?

Prior to ERC-4337, users had to explicitly initiate every transaction by signing it with their private key. Account abstraction separates private key wallets from accounts. While users still need to authorise account creation and basic setup, they can delegate certain actions, such as fund transfers, to an authorised party using consent keys. A consent key empowers an account manager to perform specific actions within authorized limits. For instance, a user can set up their smart account to automatically approve card payments up to a predetermined spending limit each month, eliminating the need to authorise every transaction manually. Going beyond Ethereum ecosystem, many blockchain networks support account abstraction natively, which makes consents and delegated transactions work even smoother.

What is Gas Sponsorship?

Before the adoption of ERC-4337, every transaction authorized by a wallet owner incurred a gas fee in the network's native token (e.g., ETH or MATIC). This meant that a user's wallet always needed some amount of native token, even for transactions involving ERC-20 token transfers. Account Abstraction introduced the concept of Paymasters, designated accounts capable of sponsoring gas fees on behalf of users. By setting up a Paymaster with OffBlocks, you can enhance your users' experience by eliminating the need for them to hold any native tokens in their account. This either eliminates gas fees or allows transaction fees to be funded with ERC-20 tokens.

Will users be able to use any tokens to fund their payment transactions?

Initially, we will support only a limited selection of stablecoin tokens for instant payments. As our system matures, we will progressively enable more tokens, including liquid ERC-20 tokens and native tokens like ETH, MATIC, SOL and TRX, for instant transaction funding.

What happens when a user makes a payment with their card?

First and foremost, we verify whether the user's Smart Account linked to the card holds sufficient value to cover the transaction and is within pre-authorised spending limits. If these checks are successful, the token value of the transaction is locked in an Escrow Smart Contract. This specialised smart contract temporarily locks funds until all conditions for transaction completion are met or until the transaction is reverted or times out. This ensures that the user's funds are not prematurely transferred to a merchant if they choose to cancel the transaction. Once the merchant confirms the transaction, we release the user's tokens from escrow and transfer them to a settlement account for subsequent off-ramping and settlement with the bank.

What happens if transaction is not confirmed by the merchant?

Merchants typically have between 2 to 7 days to confirm or capture a transaction. If, for any reason, they choose not to do so within the specified timeframe or explicitly cancel or void the authorisation, the escrow smart contract will automatically return the funds to the user's Smart Account.

How do you handle foreign currency transactions?

Each card issued through OffBlocks has a native currency, such as EUR or GBP, based on the user's residency and our agreements with payment networks. Initially, we will rely on foreign exchange services provided by payment networks like Visa or MasterCard. These services offer competitive FX rates while streamlining settlement procedures in a single native currency. Initially, we will support only selected tokens pegged to respective currencies. In the future, we plan to expand this solution with automated on-chain swaps, allowing users to spend liquid tokens while saving on FX rates and fees.

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