The 2023 Token2049 conference has just ended, and everyone in the industry has already had a lot of "reflections on participating in the conference." Articles large and small have basically completely described this largest industry event in 2023.
In addition to some surprises in projects like TON, pessimism is still the main tone in many texts. Everyone feels that the current Web3 is still a mess, without innovation, and the fundamentals have not changed. They think that there is still a lot of chicken feathers behind the carnival of this conference.
Of course, these views have their own logic, but in industries based on cyclical theory, the bear market is called a bear market because there is nothing. Cryptocurrency is not the only thing on earth. If you look at other industries, I believe you will find that AI, which is now unique in the world, has also experienced a few years of darkness.
As a non-industry technical conference, the most intuitive feeling this time is of course the large number of people. Singapore is still the core of Asia. In terms of the number of guests attending the conference and the number of spectators attending the conference, it completely overwhelms Hong Kong, which was bustling just a few months ago. This in itself is hope.
In addition to the main venue, there are also side events of all sizes nearby. What left a deep impression was the events held by Cloud Nine Capital and ZetaChain in bars where people were still communicating until midnight. As a blessing with public chain, cross-chain, Cosmos, top VC and other attributes, ZetaChain will definitely attract attention in such a market environment. Talking to some VCs, the public chain is still a sector worthy of attention in the next round of market conditions. The cooperation and competition between the Cosmos universe and Ethereum have led to more and more discussions on projects such as ZetaChain and Celestia. Everyone is thinking about using Celestia sharing layer and ZetaChain to better achieve heterogeneous cross-chain.
Another example is the activities of ChainBase, which makes data APIs. It is also very interesting. Retail investors may have never heard of it, but in the eyes of developers, ChainBase has already captured a considerable part of the market share in this track, and the user experience is better than The Graph and so on. wait.
These are all part of hope. I believe you have seen a lot of pessimistic arguments, but BlockBeats still wants to give you some hope. We sat in the main venue for two days and broadcast almost the entire main meeting live for the Chinese Internet. We sorted out 6 major sections and compiled the wonderful speeches of important guests. Here are some of what we heard and some of what we talked about. I hope that after reading this, everyone will feel less anxious.
regulatory policy
President of Gemini: “Companies can be repercussed for misleading the public and can get into a lot of trouble, but the SEC doesn’t seem to mind anymore, they don’t really have a vision for how they will regulate in the future, so they are just trying to slow it down through enforcement. grow or stop it. So you have to ask yourself, why don't they put rules and regulations in place? I think it's because they actually don't know, they don't have a vision or concept of what the crypto market should be, and they can't keep up with crypto and At the pace of artificial intelligence, they will soon become irrelevant."
Wintermute co-founder Evgeny Gaevoy: “To some extent, the adoption of spot Bitcoin ETFs is inevitable and will happen sooner or later. I think what people may misjudge is the timing, because even if the SEC finally approves all these products, these It still takes some time for the products to come to market, get approved, and then some time for managers to allocate. So it's going to be at least six months before we start seeing money flow into these products, but more realistically it's probably one to two year. But like I said, ultimately it's inevitable, so I guess it's bound to happen. From that perspective, it's hard to say how much the price will be affected, but I think once we see real inflows, that's It’s time for us to return to the track of substantial development.”
Pradyumna Agrawal, Managing Director, Temasek: “There are consistent themes across markets in terms of retail investors and retail investor protection. I think because a lot of the regulatory action happens in the U.S. and a lot of people are actually looking at the U.S. in this region. , the very obvious theme is that agency engagement is very critical. It really depends on each agency, how they are going to develop policy, how they are going to deal with this issue. There is definitely more progress being made in developing regulatory policy. You can see Singapore enacting these most Progressive regulatory policies. There's work going on in the Middle East as well. There's work going on in Hong Kong, which is very positive for the industry. I think the focus we're seeing in this region is whether you can put clear regulations in place to prevent these players from Not regulated. You have clear rules and guidelines and you can operate based on those. I think it has to do with demographics. The focus is also on non-institutional use cases, like gaming and entertainment. A lot of people here may already be participating Korea Blockchain Week in South Korea. We are seeing a lot of activity and focus on these areas. What this actually means is that we are seeing a very balanced approach in Asia, where there are no clear rules and regulations. A clear sign It's, when are you going to get those rules to be able to operate accordingly. Of course, everyone is looking at the U.S., now Europe has MICA, and the U.K. is putting regulations in place."
Binance founder CZ: "Actually, in my opinion, the key is the OTC channel for fiat currency exchange for crypto. Everyone has different concerns. This is the key to the problem we see. At the beginning of this year, due to the strengthening of regulatory policies , we have seen many traditional institutions withdraw from the OTC market. But at the same time, we have also seen some new institutions enter the market. This industry already has tens of millions of users. I think doubling the number of users may make the entire industry A billion users. For most banks, if they only serve one country, they're going to get very few users. If they get a billion users, that's huge for a bank. We It can bring tens of millions or even hundreds of millions of users to these traditional financial institutions and benefit a lot from it. Therefore, we see that many traditional financial institutions want to obtain this opportunity. So I think that although people are concerned about the use of cryptocurrency More advanced use cases are very important, but in order to attract more people to cryptocurrencies, we have to convert fiat currencies into cryptocurrencies and vice versa.”
institutional investment
Pradyumna Agrawal, Managing Director of Temasek: “Now we are talking about spot and spot-based ETFs. From an institutional perspective, I think there is a common theory that in every crypto bull market, you hit different markets effect. So you start engaging with the people who were the first to get involved, and then you move on to people who are benefiting from cryptocurrencies, and then high net worth individuals, family offices, and the prediction is that in the next wave, naturally there will be a massive phenomenon of institutional participation .A lot of institutional engagement is in the context of traditional infrastructure. And in that context, not just traditional infrastructure, but more transparent assets. So it seems to me that what's really needed here is some combination of those two worlds. kind of bridge, which is to say, if you want broad institutional participation, you need to have critical infrastructure. This infrastructure will be used to do risk management, deploy other asset classes. Digitize all infrastructure, bring all these assets Categories in some form of tokenization. So can there be efficiency benefits? Can there be liquidity benefits? There's a lot more that needs to happen here to enable broader institutional participation. Again, I'm going to Separate from the question of whether institutions buy ETFs or buy and hold Bitcoin. I'm talking about the longer-term question. It's a very long and painful digital workflow to tokenize an asset class, can I cross capital Cross-collateralization of certain assets? I feel like this infrastructure is being validated in different scenarios, both on platforms and on cryptocurrencies.”
Chris Rhine, managing director of Galaxy: "There are some differences between the East and the West at the moment, and a lot of it has to do with the more adversarial regulatory approach taken by the United States. Of course, there are also countries that work closely with the United States and they are worried that some regulatory pressure may Will trickle down to other areas. As a result, large-scale investments by institutional capital have been very cautious, especially when it comes to reputational risks and their own regulatory risks. As mentioned before about family offices, high net worth individuals may only have one or a few funders. , the decision-making process is simpler, and if it doesn't work, you're not a public company and you don't have a lot of customers, it's going to be hidden in the broader portfolio. But they think the risk of a big institution making a mistake is still too great. So we need to look at What's coming is just further developments and progress in terms of regulatory and even political frameworks in the U.S. As that progresses, I think even U.S. allies will start to allay their own concerns that these perspectives might be incorporated into their own frameworks .”
Chris Rhine also said: “When talking to a lot of institutions, they think the approval of spot Bitcoin and Ethereum ETFs is a huge regulatory milestone. It almost helps to treat cryptocurrencies as an asset class and not just one. a potential unregulated investment vehicle. So the feedback I've heard has been mostly positive. I think from another perspective there's a time element involved with large institutions committing capital. But honestly, I've been at BlackRock for over a decade. Years ago, they were a powerful marketing machine. A completely untapped area in the U.S. market was Wealth Channels. Getting product approval for Wealth Channels at many of the big banks has been extremely difficult. Now, finally, there's a new one Wealth management model, they will allow investors and interested parties to gain investment exposure to cryptocurrencies in a very easy and accessible way, as well as a lower cost way."
Wintermute co-founder Evgeny Gaevoy: "Six years ago, cryptocurrency was almost an unpopular term, and most people had reservations about it. But now, on the one hand, we see Bitcoin on large trading platforms in Sydney, We've seen a huge number of Bitcoin applications launched by almost all major asset managers. On the other hand, the technology itself is also gaining widespread acceptance. For example, you can see PayPal launching a stablecoin. You'll see a lot of people Think of it as a possible alternative to the existing financial infrastructure. And on our side, previously we were mostly dealing with local institutions and maybe some family offices, but now we're seeing more and more Counterparties, they're from traditional financial institutions, traditional family offices, funds, etc. It's definitely a clear shift in the perception of cryptocurrencies being seen as a legitimate thing. I think now we've got Bitcoin and Ethereum becoming With legalization, DeFi tokens and many other things may follow.”
Bitcoin
Stacks co-founder Muneeb Ali: "2023 is a very important year for Bitcoin. From 2017 to 2022, which is the period of Bitcoin's block size civil war, it is the dark age of Bitcoin, because during this period Bitcoin doesn't have a lot of development work. I used to joke that when I go to events, people will introduce me and say: this is Muneeb, he is the only person developing on Bitcoin. And in 2023, I think there will be A watershed, partly due to the emergence of Ordinals, Bitcoin's transaction fees have increased significantly, increasing by more than 50 times, attracting strong interest from capital and developers, which has also had a positive impact on L2 layers such as Stacks. Stacks will serve as the basis for Bitcoin L2 extension will play an important role in the future."
Franklin Templeton CEO Jenny Johnson: "We just applied for a Bitcoin ETF. Why do we need an ETF or a fund? Because today if you own an ETF, even though it trades on the trading platform throughout the day, it actually only prices in one day. Twice. So imagine, firstly, a token that can be traded 24/7, and secondly, smart contracts that ensure you know exactly how the underlying asset is priced when you trade. So, we strongly believe that this will open up new investment opportunities, but also reduce costs. But I have to tell you, Bitcoin is the biggest disruption and disruption in financial services, and it’s the biggest disruption in blockchain, and that doesn’t mean I don’t like Bitcoin, it’s just that there’s more to it. I worked with someone in the U.S. Talking to the governor of the state, he is very opposed to anything to do with digital assets, and he ended up saying that what bothers him the most is that every time there is a cybercrime, there is a demand for payment in Bitcoin because you can't trace it. That bothers him — —The reason why I say this is that I think Bitcoin can be difficult to invest in. This is a good point of debate because governments will always control their currencies. One of the pressure points for the EU is that they have a shared currency and individual country level Unlimited spending, this creates pressure. So if Bitcoin threatens the currency, it will see regulatory bans. But if regulation requires wallets to do KYC, like banks, know your customer, this may improve, but As long as Bitcoin has value and crime is going to happen, there will always be barriers. I don’t know how to stop that because the participants don’t have to be in a regulated environment.”
Selini Capital CIO Jordi Alexander: "Bitcoin and Ethereum, even though there are occasional government sales, if you look at them as global macro assets, compared to gold or other large-scale assets, in the long term, these prices are still Seems very cheap. However, if some institution were to sell $50 million in crypto assets at once, the liquidity of the market would be very thin. I always look at FDV and market cap as reference points for fundamental investors. I often want to understand a certain What is the current observed value of the project, especially if it is likely to be manipulated in the order book. This also does not mean that I will short a project, because short is very dangerous. But if I feel that the FDV of this project If it is already high, then it will not intervene. So from a macro perspective, continue to accumulate and look for some potential opportunities. Whether it is the government or other entities, some assets will be sold, and these assets are very suitable for long-term holding. I think two years Looking back, these assets will look very cheap."
Dan Tapiero, CEO of 10T Holdings: "Bitcoin and Ethereum are core assets in the blockchain field and have established network effects that have grown rapidly over the past year. Bitcoin and Ethereum are different from other assets, and other fields assets are still in the venture capital stage. The bear market is over and opportunities need to be seized when the market panics. Although market sentiment was hit during the FTX crash event, the price of Ethereum did not hit a new low, which is a positive sign. He also said that now This is an opportunity to invest in crypto assets, Web3 and blockchain companies because the valuation discounts in these markets are as high as 60% to 80%. Some traditional private equity investors are exiting this space and this is a good investment opportunity because Many mature companies are raising funds, with financing amounts of US$50 million, US$100 million or more. There is a survival bias in the blockchain field, which provides opportunities for investors.”
Bitcoin evangelist Dan Hled: “The main adoption of Bitcoin came from users speculating and trading in Asian, Western European markets during the speculative cycles of 2013, 2017 and 2021. Speculation was what originally attracted and pulled people to trade. Even Before the value of Bitcoin was worthless, Satoshi Nakamoto also proposed this hypothesis. Those speculators and those who stick to it, because they truly understand and are educated about Bitcoin, become holders. This is the bottom line of the bear market The reason is because there are true believers. Speculation is how they enter the market, and then they stick to it and make money. There are only very few speculative games on Bitcoin at the moment, most of which are spot trading. I noticed on NFT NYC that a lot of Users buy NFTs for 0.1 ETH and then resell them for 0.3 ETH. They know nothing about how ETH works, and they know nothing about monetary policy. But this is how they know ETH. I realize this is different from people using spot The mechanism for trading to introduce Bitcoin is the same. So, with Ordinals, NFTs, options, futures, DeFi on top of Bitcoin and more and more applications, this is the next milestone for Bitcoin, leading to greater adoption and bring about the next bull market.”
Nic Carter, the father of smart contracts: "I hope more countries will adopt Bitcoin. Implementing the ZK Rollup operating code software on Bitcoin is one of the most critical things now. This is a relatively easy goal to achieve and should not cause too much concern. Controversy. This will help us open up a vast field of development, and this technological innovation has been proven on Ethereum. If the Bitcoin community sticks to their original vision of drawing innovation from other blockchain fields, then they will take action. So I think this will prove that Bitcoin can continue to upgrade itself, which is one of the most important things."
Layer 2
Ed Felten, co-founder of Offchain Labs: "There are hundreds of billions of dollars of liquidity on Ethereum, a small part of which has been bridged to various Layer2 networks. But in Layer2, compared to the amount of TVL, its activity is higher .Because on Layer2, transactions are cheaper, GAS fees are lower. But there is another interesting thing going on, in addition to having the bridge value on Arbitrum from the largest amount of Ethereum, we also see that directly on Arbitrum Start the growth of tokens on Arbitrum. Currently, the native tokens on Arbitrum are worth more than the bridged ETH or tokens. I think this is an increasingly obvious trend, which is to mint and manage tokens on Layer 2 The cost is also lower. EIP-4844 will be launched in the next few months, which is a first step in this direction. But I think over time, the cost of data on Ethereum will decrease, making It won't be much higher than the cost of typical commercial data storage. People will still want to be able to operate at a lower cost, but I think the advantages of this external data availability solution will be reduced as Ethereum will enter a data A stage where availability becomes the most important part of their protocol. So, in the long term, I'm optimistic that those costs will come down. At the same time, we provide services for those who are willing to make the trade-offs and are willing to make the trade-off between availability and lower costs. Those weighing in provide external data options.”
Sandeep Nailwal, co-founder of Polygon: "Usually we say that enterprises have B2B mode and B2C mode. For Ethereum, until today, it is more like U2C mode, that is, user-to-chain mode. Now we see that Ethereum is moving to this kind of chain. On-chain model. What this means is that in the next 2-4 years, you will see Ethereum becoming the base settlement layer, providing security, settlement guarantees and security features to these chains. But I am seeing a decline in user activity on Ethereum Trend, because users want to interact at Layer2, especially now with advanced technologies such as ZK rollups and optimistic rollups, like what Arbitrum is doing, using permissionless fraud proofs or ZK rollups, permissionless validity proofs, etc. Ethereum becomes the source of security and settlement, so it becomes a chain-to-chain model rather than a user-to-chain model.”
Alex Gluchowski, CEO of Matter Labs: "Vitalik Buterin established a vision centered on Rollup upgrades. He compared Ethereum to an island where only small houses can be built, subject to space constraints. Rollup upgrades are like skyscrapers, allowing for The same surface ostensibly holds more activity. However, even so, its capacity is still insufficient to meet demand. Therefore, the ability to upgrade beyond Rollup is needed, just like the regaining of sea land expansion, this development will open a new chapter for Ethereum. EIP-4844 and sharding cannot solve Ethereum's problem, a key challenge in the development of Ethereum, which is data availability. Data availability is currently the most expensive and scarce component, and will have an impact on transaction prices, execution and storage. zkSync's two approaches to solving this problem: using state differences instead of calling data, and extending data availability off-chain and seamlessly interoperating with Rollup accounts. These approaches are expected to improve Ethereum's performance and scalability Sexual issues."
Near Lianchuang Illia Polosukhin: "Different types of users want to participate in this economic system. Hundreds of millions of people are using centralized trading platforms instead of DeFi. The largest application in DeFi may be Stargate, which may be all about airdrops." Robots. But what we actually need are experiences and financial tool applications that are comparable to centralized trading platforms, and we have only just begun to have such applications. For example, Orderly Network provides a trading experience that matches centralized trading platforms. Because they run the order book off-chain in an almost rollup fashion, and then with just one second settlement time, no centralized exchange can match that. This is what we actually need to bring the product to market and make it available to The type of consumer, because they don't want to spend a lot of time figuring out all the complexities of the DeFi ecosystem and leave the rest to the bots and potentially professional traders. We're getting there and I think there will be More users are coming from this space. But again, it's more from attracting customers and consumers than it is from subnets or sidechains or shards or whatever. We call them all different, but at the end of the day, They're all a way of running in parallel. It doesn't matter how it's done, the user doesn't care about that, and that's the problem."
Stablecoin
Justin Sun: "I believe that in the next 10 years, the largest daily application scenario of cryptocurrency and blockchain will still be stablecoin payment transactions. Recently, we have seen the market value of stablecoins exceed 30 billion US dollars. Currently, the total The market cap of stablecoins is about $50 billion and the daily trading volume is over $12 billion. So, I think in the next 10 years, we may have 100 times more trading volume than we have now. This is why I believe that eventually large Most people will use stablecoins and blockchains without even understanding all the technical details.”
Jeremy Allaire, co-founder and CEO of Circle: "Families, businesses and financial institutions need to know that these digital currencies are actually part of the financial system. This is happening. By the middle of next year, in almost every major market, we will be in compliance , getting legal certainty on a regulated stablecoin. This will be a very big thing. I am a product person with a technical background. So I think the most important thing here is to solve technical problems. In this regard, I I think there is good reason to be optimistic. We are now seeing the development of blockchain infrastructure in multiple areas. The first is a scalable, cost-effective, and more accessible blockchain layer. There is a lot of innovation happening there involving ZK rollups and innovation in Layer 1 blockchain. That's key because we need to support applications that scale to hundreds of millions or billions of users. So I think that's ahead of us. Solving user experience issues is the most important to me thing. For ordinary people, to enter this world, they should not need to know private keys, seed phrase. They should not be afraid of losing equipment and money. Likewise, users should not need to purchase crypto commodity tokens to pay for gas fees. , don't even need to know what a gas fee is. It's not a normal thing for people. So I've always said that crypto needs to talk out of the background, with currency and user experience at the front. I think when I see the transition from no gas User interface abstraction will make people feel very at ease when it comes to technological innovations in things like transactions, smart accounts, wallets, etc. I think what's starting to happen now is that leading Web 2 companies with hundreds of millions of users are actually connecting to Web 3 infrastructure, But with a user experience that is very simple and easy to use but also secure and still integrates natively with the blockchain. So the paradigm shift in user experience and Web 2 companies adopting this paradigm, it's going to be a breakthrough. So all The confluence of these factors will make me think 2024 will be a phenomenal year for crypto adoption growth. I think we will see a significant increase in user numbers, but we are not there yet.”
Wintermute co-creator Evgeny Gaevoy: "I have been making markets in traditional markets for 10 years, especially in cash transactions, various modes of settlement, remittance of cash overseas for payment, etc. Although the efficiency is already very high, But it's not nearly as efficient as putting it on the blockchain. We started with stablecoins, which can be a huge catalyst for improved settlement. Because you can actually remove the reliance on banks in settlement, That's obviously an improvement. The second aspect for me is the democratization of how ordinary people can have access to certain opportunities, like if I want to get a U.S. Treasury bond, currently I need to open a bank account, I need to transfer dollars, I need Instructing them to buy Treasuries for me would require relying on them to do it in a secure, isolated way. Again, that's a lot of steps, many of which end up being pretty inefficient, whereas asset tokenization would theoretically allow people to invest directly in These tokenized assets greatly improve efficiency.”
Nic Carter, the father of smart contracts: "The U.S. dollar is currently 99% of the unit of account for stablecoins. Obviously, this is much more than the U.S. dollar's share in foreign exchange reserves or international trade. It is quite noticeable that stablecoins are so dollarized. , I predict that this will continue, with US dollar-denominated stablecoins maintaining at least 95% of the market share. I believe that stablecoins that do not pay interest have led to the contraction of the stablecoin industry. Now that there are stablecoins that pay interest, Existing markets will be forced to start paying a portion of the interest to holders. This is not technically difficult to achieve and there is no reason for them not to do so. However, interest-paying stablecoins cannot be issued in the United States for regulatory reasons, This will accelerate the trend of offshore stablecoins. Subsequently, we will see the rise of crypto-collateralized USD stablecoins. I think this is a good thing because it will use crypto assets as a store of value and stablecoins as a medium of exchange. So it's something that's very native to crypto and it unifies our goals. So I think within about two years, 25% of USD stablecoins will be issued as collateral with crypto assets. , rather than using U.S. dollar assets as collateral. Today, that ratio is less than 5%.”
NFT market
Pudgy Penguins CEO Luca Netz: "I think people's emotional attachment to characters and their emotional utility are the core of NFT's ability to grow solidly in the market. If I buy a "Fat Penguin" toy for my niece, and I own A Pudgy Penguin NFT, not because of the price, but because of the emotional connection I have as a member of this community. Those NFT or PFP projects that don't look very friendly, I think they will fail. "
Darryl Wang, co-founder of the crypto venture capital club Tangent: "If you look back at the development of the NFT market in the past 12 months, you will find that even the most determined holders have seen a lot of capitulation. I think one of the most perfect examples is Basis. It was the gold item last cycle and now it's back to reality. I do think NFTs are an asset class. What we're seeing in 2021 is the first step in an iteration of how we create more liquid assets and I think this space There are a lot of smart Builders working hard to develop the infrastructure needed to facilitate more of these types of transactions. So, the concept of NFTs is fairly easy for most people to understand. Most people trade watches, cars, etc. This is a behavior that is quite ingrained in human culture. If you look back at the price of NFT today, or those NFT protocols with liquid tokens, their current prices are quite depressed. From a fundamental perspective, this may have Good reasons. But when speculative enthusiasm comes back again, and we do expect some recovery next year, I think this asset class is worth watching."
Daniel Alegre, CEO of Yuga Labs: “I am passionate about what Yuga Labs is doing, and we have a very strong and passionate community. When I became CEO six months ago, one of the first things I did was announce our The next APE Fest event, our global annual community event, is planned for November in Hong Kong. My Asia Pacific experience goes back decades, from the early days of Google all the way up to now Yuga Labs. What I see here Not only the entrepreneurial spirit, but also the level of foresight and reinvention. The investment and foresight in the Asia-Pacific region are unparalleled globally. Some game companies in South Korea are considering leveraging Web 2.0 to build flagship IPs and introduce them In a Web 3.0 environment, this is something that's not going to happen in the United States. When you have to think from scratch about how to really attract players in Web 3.0, starting from the infrastructure of the game, Web 2.0 players see it very clearly, if you are just doing it to make money And hooked up to a Web 3.0 component, they're going to be skeptical. But if you fundamentally think about Web 3.0 as core gameplay, it makes for a really unique experience. In the U.S., the regulatory environment isn't as tight as it is in other parts of the world. Friendly, but that's starting to change. One of the obvious reasons is that they see that there are actually benefits to this, that if it's done right, the investment and possibly the jobs that will happen will help the economy grow."
