Why DAPs?

Decentralized Agnostic Paytags (DAPs) were created to address a fundamental problem in the world of digital payments: the lack of interoperability between different payment apps and networks. In this section, we’ll explore the challenges that motivated the creation of DAPs and how they aim to revolutionize the way we send and receive money across platforms.

The Payment Island Problem

Imagine a world where you have a dozen different email apps, but you can only send emails to people using the same app as you. If you’re on Gmail and your friend is on Yahoo Mail, you’re out of luck. You’d need to sign up for a Yahoo Mail account just to communicate with them.

This is essentially the problem that exists in the world of digital payments today. We have numerous payment apps, each with its own network of users and unique features. While these apps make it easy to send money to other users within the same platform, they create isolated “payment islands” that can’t communicate with each other.

So, if you want to send money to a friend who uses a different app, you’re faced with a few less-than-ideal options:

1. Convince your friend to sign up for the same app as you.
2. Go through the cumbersome process of withdrawing funds from your app and depositing them into your friend’s app.
3. Resort to a lengthy back-and-forth to find a payment method that works for both of you.

This problem is compounded by the fact that different apps support different currencies and payment methods. Sending Bitcoin on the Lightning Network is different from sending it on the main blockchain. Sending USDC on Ethereum involves different steps than sending it on Stellar. And don’t even get us started on the differences between sending money to a mobile money wallet versus a bank account.

The Vision for DAPs

The creators of DAPs envisioned a world where sending money is as easy as sending an email. A world where you can send money to anyone, regardless of what app they use or what currency they prefer. A world where you don’t need to worry about the underlying complexities of different payment networks and protocols.

This is the promise of DAPs. By creating a decentralized, standardized way to represent payment addresses and associate them with human-friendly handles, DAPs aim to break down the barriers between different payment islands.

With DAPs, you can have a single, memorable handle (like @alice/example.com) that’s linked to all your different payment addresses. So, when someone wants to send you money, they don’t need to know whether you use CashApp or Venmo, or whether you prefer to receive Bitcoin or Ethereum. They just need to know your DAP.

The Benefits of DAPs

The potential benefits of DAPs include:

• Simplified User Experience: DAPs make it easy for users to send and receive money across different apps and currencies. No more juggling multiple apps or trying to figure out which payment method to use.
• Increased Interoperability: By creating a standardized way to represent payment addresses, DAPs enable different apps and networks to communicate with each other. This opens up new possibilities for collaboration and innovation in the payments space.
• Greater Financial Inclusion: DAPs have the potential to make digital payments more accessible to people around the world, regardless of which apps or currencies they have access to.
• Enhanced Privacy: Because DAPs are built on decentralized identifiers (DIDs), they give users greater control over their personal information. Users can choose which payment addresses to associate with their DAP and can revoke access at any time.

The Road Ahead

While the vision for DAPs is compelling, there’s still work to be done to make it a reality. Wallet providers and payment apps need to adopt the DAP standard and integrate DAP resolution into their products. Developers need to build new tools and services that leverage the power of DAPs. And users need to be educated about the benefits of using DAPs for their payments.

But the potential upside is enormous. By breaking down the barriers between payment islands and creating a more open, interoperable payments ecosystem, DAPs have the power to transform the way we think about money in the digital age.