Crypto meets Web2
Today, it is hard for people to both buy and sell NFTs. James Sun, a repeat founder with deep roots in the creator economy, set out to fix that. With his co-founders, he created Paper, an NFT checkout solution for developers.
As an early-stage company, hiring an infrastructure specialist was out of the question, and the core team needed to become experts in web3, not AWS. With Zeet, Paper was able to iterate on their product and build a bridge between web2 and web3 without worrying about hosting or devops.
Building a Bridge
Paper makes it possible for a developer to integrate a few lines of code and instantly be able to give their customers a frictionless NFT purchase experience.
We are a bridge between web2 and web3
When selling on web2, creators benefit from a decade of user experience optimization on their platforms. Checkout flows in particular are relentlessly A/B tested to maximize conversions by minimizing friction. Payments are localized, standardized, and fully managed. Despite all of this work, creator economy platforms and digital merchants in general still invest heavily in purchase experiences because it remains one of the highest-leverage places for improvements of any size to majorly increase revenue.
If the state of the art in web2 checkout optimization is fine-grained sandpaper smoothing out any lingering friction, NFT purchase flows are still being shaped by chainsaws.
A single purchase can involve multiple currencies and decentralized exchanges, limiting demand for a project to the people who have the knowledge and motivation to navigate the system. As a customer, you need to have a wallet, get the currencies that you need on the chains that you need, and make sure that you have the native tokens for gas if the NFT happens to be priced in a different token than the native chain’s token. For creators with a broader audience full of people who don’t know how to, say, purchase wrapped Ethereum or spend MATIC to get an NFT minted on Polygon, crypto’s complex checkout flow could severely limit a project’s potential.
By bridging the gap between the optimized user experience of traditional checkouts and the decentralized freedom of NFTs, Paper offers its users infrastructure that not only saves time but materially broadens their customer base.
The first step is accepting payments. A free piece of industry jargon: “payment rails” are platforms or networks that move money between parties in a standardized fashion. Rails, like train tracks, move a payment through the system. Paper uses third-party payment rails to accept both fiat and crypto currencies. These payment rails anchor Paper’s bridge on the web2 side.
For traditional currencies, Paper uses Stripe to take payments from any credit card. This is integrated through the Stripe Elements SDK. For crypto, Coinbase Commerce processes transactions in popular tokens like Bitcoin and Ethereum that customers are likely to have. NFT creators using Paper don’t need to make these two integrations themselves, but basically any potential customer visiting their project will have at least once usable currency, even if the NFT is minted on a less widespread chain.
Paper’s web3 anchor is set in deep on-chain foundations. When a user sends money through a payment rail, it hits one of the many float wallets that Paper uses to receive currency. Then, operator wallets interact with smart contracts that are imported into the system. The operator wallets can hold any tokens they need to support a given contract. If someone is selling a USDC NFT on Solana, the operator wallet assigned to that creator will hold both USDC and Solana.
Paper maintains a fleet of wallets that are held in parallel so that if there are multiple contracts that need to be called by a developer, it matches multiple wallets to multiple contracts. Wallets and contracts are both atomic, so parallelization is necessary. Otherwise, users are waiting for each other, even if they are not buying the same thing. A task queue orchestrates the entire fleet of float and operator wallets, spanning the web2 and web3 foundations.
Spanning the Gap
If Paper is a bridge between two worlds, Zeet is the steel truss bearing the load of the bridge and its traffic. Paper hosts everything in between the payment rails and the blockchain with Zeet, plus its homepage and incidentals like analytics. Zeet-backed services read on-chain information, send post-purchase notifications, and serve the UI that powers every transaction.
To extend the bridge metaphor, James is focused on making crossing the bridge quick and pleasant. He doesn’t want to worry about whether the bridge will crumble under its own weight. Paper is operated by a team of four. “Nobody on the team really has devops experience,” James said, “that would have been a skill that we would have needed to learn.”
At a startup where time is so precious, I’d rather have the team learn something like “how do we detect fraud better” or “how do we better manage directional risk” which are critical to the business … as opposed to DevOps
By using Zeet for their infrastructure, Paper’s team has stayed concentrated on business-critical problems, even as these problems have evolved through a series of pivots.
Discovering Paper’s Purpose
James has done this whole company thing before. As a Thiel fellow, he dropped out of college to pursue a wearables startup. Shortly after, he found his first success with Revlo. Revlo started as a chatbot for Twitch with simple games that grew into a way to gamify the experience of being a spectator on a stream, increasing engagement. It quickly became popular with creators, drawing millions of users and earning James and Revlo a spot in Y Combinator’s summer 2016 cohort. After a few years, Twitch bought Revlo, and James worked there as a product manager launching features like channel points that contributed to his Forbes 30 under 30 nod in 2020. So when he felt the urge to return to entrepreneurship, building a creator economy tool was a natural move.
It is not sustainable to build a platform on top of someone else’s data because platforms have a tendency to centralize and cut people off or take a gigantic slice of revenue like Apple or Steam.
Paper started out as a broad tool for creators, but through two pivots narrowed its product to today’s offering. A pivot doesn’t have to be a change, it can be a clarification. But even for an experienced team, pivoting is hard work and requires a lot of rebuilding. “Pivot” suggests you keep momentum, but it is easy to lose faith along the way.
Paper’s intentional pivots based on customer feedback and industry trends accelerated their progress rather than restarting it. And by using Zeet from the beginning, James’ team didn’t have to rebuild the same infrastructure every time. Instead, they retained their energy to focus on executing the vision behind the change.
Finding a Natural Fit
Paper started out as a way for creators to offer a subscription to their fans. If this sounds familiar to you, don’t worry, James realized quickly that it wasn’t the play. “In web2,” he explained, “all we were doing was getting the leftovers and crumbs from Patreon, Twitch, YouTube, because all of the creators were already on those platforms, which have network effects.” After working on Revlo and Twitch, James knew that serving creators was his passion, but he needed a new way to do so.
Finding a Niche
Excited about opportunities in web3, Paper’s team pivoted to a platform that let creators launch membership tokens. The platform handled everything from minting the token to creating the smart contract to offering a landing page and private thread of content for NFT holders. The team bought into web3’s potential for creators. “We saw web3 as being a big unlock because it allowed creators to actually own their audience and defend themselves from being deplatformed,” James said.
While this new business model was more promising, it had one major flaw. The best NFT projects offer a unique and compelling utility to token holders, either virtually or in real life. In talking to creators, James discovered that “the best web3 projects were projects where they already have the resources to build their own website and build real utility into their NFTs. That utility is frequently way more compelling than just a private thread of content, it can be anything from getting IRL access to cafes and clubs to participating in the launch of a new video game.”
However, early users loved Paper’s checkout experience and unique user experience that let customers pay in any currency, regardless of the NFT’s chain and denomination. So the team pivoted to Paper’s current form, building out the payments and commerce portion of the previous product into a stand-alone offering.
Finding a Need
As Paper’s present platform is a subset of their previous work, they were able to go live with their first customer just three weeks after the pivot. With four customers live at the time of the interview and many more in the pipeline, this iteration of Paper is the most promising yet. Reflecting on the last two months, James said “early signals have been good and I am really excited about scaling this operation up.”
As Paper makes guarantees like chargeback protection, the doors aren’t wide open quite yet. “We try to do a good job of not working with bad projects,” James said, “We vet our projects and make sure that they are going to provide real utility. That’s to protect us, but also to protect the sellers as well.” Creators and developers with promising projects who join the waitlist today can quickly get onboarded onto the platform and start selling NFTs.
From its pivots, Paper developed unique financial infrastructure, recognized its usefulness, and productized it for NFT developers. While explaining Paper’s value proposition in the interview for this case study, James outlined Paper’s structural similarity to Zeet. In his words:
“There are a lot of parallels around abstracting away complexity so that teams can focus on what matters to them. A NFT project’s competitive advantage is their community, their product, their utility. That’s how they are going to win and dominate the market. It is not going to be payments, that is standard.
“It is the same for Zeet. We need our product to work, we need to deploy our applications. I’m never going to differentiate to my customers along the lines of ‘hey, we’re better because our server deployment is done in-house.’ The beauty of this is that I’ve never heard from our engineering team saying ‘this server deploy thing sucks’ or ‘now we have to manage our own AWS.’ It is just ‘Zeet does this.’ Zeet has done a good job of picking and choosing the things that are most troublesome for our team and handling it. Our team has nothing but great things to say about how Zeet has allowed us to focus on building a great payments infrastructure and checkout experience.”
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