p2pix is an innovative and experimental hackathon project that aims to create a trustless peer-to-peer (P2P) solution for exchanging fiat currency to ERC20 tokens on Layer 2 (L2) blockchain networks. By leveraging the power of blockchain technology and Cartesi Rollups, p2pix has the potential to revolutionize the way people exchange value across borders and markets.
The Story of p2pix
p2pix was born out of the need to create a more efficient and secure way for people to exchange fiat currency for digital assets, particularly in countries where access to traditional crypto infrastructure is limited or constrained by government regulations. LocalBitcoins, for example, once played a significant role in providing access to cryptocurrency in regions such as Venezuela, where it helped drive capital flow through informal P2P and OTC methods. However, these transactions often face challenges, including friction, security risks, and logistical overheads.
p2pix aims to overcome these challenges by developing a platform that allows users to lock ERC20 tokens in a smart contract and set a fiat currency price to be paid through the PIX payment system. When a buyer initiates a transaction to the specified PIX key, the smart contract receives and releases funds based on a transaction proof generated by the PIX system. This process eliminates the need for a third-party escrow service, ensuring a more efficient and secure exchange.
Designed with flexibility in mind, p2pix's solution can potentially be ported to other payment systems, such as the upcoming FEDnow, legacy systems capable of generating transaction proofs, and even Central Bank Digital Currencies (CBDCs) when they become available for public use. The trustless nature of the platform ensures that the only centralization point lies with the currency issuer, a risk that cannot be mitigated.
One of the key technical challenges in implementing p2pix is obtaining signed messages from trusted fiat authorities, such as central banks or financial institutions, that can attest to successful fiat transfers. Ideally, these entities should provide the payer with a signed message confirming the transaction. This may become a reality with the new PIX APIs in Brazil or the design of CBDCs.
To address this challenge, p2pix leverages the power of Cartesi Rollups, which allows for the efficient reading and validation of signed JSON messages inside the DApp. While JSON formats are not usually suitable for smart contracts, the Cartesi Virtual Machine can efficiently handle such data. This capability is crucial, as trusted fiat authorities might not provide confirmations in a naturally suited format for smart contracts.
As an experimental hackathon project with the potential to become a market-ready product, p2pix is an exciting development in the world of decentralized finance. By offering a trustless P2P solution for exchanging fiat to ERC20 tokens on L2, p2pix has the potential to reshape the way people transact across borders, particularly in regions with limited access to traditional crypto infrastructure.
If successful, p2pix could pave the way for a new era of secure, efficient, and transparent value exchange, ultimately empowering individuals and communities worldwide to participate in the global economy without the limitations and risks associated with traditional P2P and OTC methods.