On February 4, Pay launched the Payy Network, a new layer 2 (L2) network compatible with the Ethereum Virtual Machine (EVM) with privacy built-in by default. ERC-20 token transfer is the most used standard for issuing digital assets in its ecosystem.
According to the Payy team, the chain was designed “specifically to enable stablecoin payments and financial privacy.”
The announcement comes a day after Ethereum co-founder Vitalik Buterin focused on the role of the base layer (L1). As reported by CriptoNoticias, the developer claimed: The original vision of L2 no longer makes sense; Ethereum’s main layer has low fees and increased block space, so it scales automatically without the need for L2.
In addition, buterin is linked to these second layer chains. build your own identity.
In this framework, the emergence of Pay Networks is not about competing for general capacity; However, it specializes in private payments.
Do not replace L1 to extend it to specific uses
When Vitalik argues that Ethereum needs to scale primarily at the base layer, his criticism points out that L2 repeats the same generalist model and competes with L1 in terms of capacity and narrative.
Under this framework, Pay Network promises to scale specific problems that L1 cannot natively address. Privacy in stablecoin payments and transfers.
Along these lines, the new chain’s team has published a document exposing Payy Network’s capabilities to address its promise, as shown in the image below.
A deterministic finality of approximately 300 ms means that: Transactions are considered irrevocable almost immediatelyUnlike Ethereum, where economic confirmation can take 15 minutes, according to data presented by the Payy team.
At the same time, the expected performance is 10,000 transactions per second (TPS) limit is estimated at 100,000, indicating intensive usage in payments, well above the current L1 capacity of 12 TPS.
In terms of cost, the data reflect another structural difference. Payy features fee-free ERC-20 transfers and an average gas fee of close to $0.01 USD paid in its own token, whereas Ethereum has historically low fee costs but is significantly higher and congestion-dependent.
In addition to this, Zero-knowledge cryptography integration into Payy (ZK) at a native levelIn other words, it is a technique that allows you to verify operations without revealing data compared to a non-privacy-optimized base layer.
Taken together, these metrics represent a network designed for frequent, cheap, private payments rather than general computing.
How does the new Ethereum network, Pay Network, work?
Payy’s architecture is supported by chain-specific “privacy pools.” A pool is a common fund in which tokens are grouped. Mixing multiple transfers results in: Difficulty linking shipments to specific recipients. In Payy, all ERC-20s go into a pool within which direct transfers occur, hiding source and destination data.
When a user interacts with a smart contract, funds leave the pool to a new address with no previous history. this practice Reduce the possibility of transaction tracingBecause, similar to what is happening with the Tornado Cash platform, the link between past identities and current operations will be severed.
Private transaction information is not disclosed on-chain, but Stored in an external “privacy vault”.
These external vaults store data needed for auditing, analysis, or compliance and can be configured using technical parameters (remote call URLs known as RPCs). This way, developers can choose How much to reveal and to whom?balance privacy and compliance depending on your application.
Payy Network targets two audiences. On the one hand, native cryptocurrency users who do not need to learn new flows and are already operating with decentralized wallets and applications. Financial companies, on the other hand, access the network through distribution partners.
Finally, the team also announced that its own wallet will boost the startup with thousands of users and initial liquidity, and that a stablecoin issuer, whose name has yet to be revealed, will be participating from day one.
However, according to the announcement, simply adding the network to an EVM-compatible wallet like MetaMask and sending ERC-20 tokens will automatically make the operation private.