[Event] Discussing the Future of Digital Assets in a Turbulent Industry

Coinlive played host to the “Discussing the Future of Digital Assets in a Turbulent Industry” event, which was also co-hosted by Beosin and FOMO Pay, held on 25 November 2022 in Singapore. The speakers spoke in-depth about the regional strategies and perspectives on the future of digital assets amidst a turbulent industry with a turnout of over 110 participants.

With the recent happenings in the crypto industry that are still fresh and vivid in our minds, increased scrutiny regarding crypto-related regional policies and strategies in various regions worldwide, is inevitable. Despite all that, the market’s enthusiasm for digital assets is expanding rapidly and has garnered the governments’ attention.

Digital Asset Outlook: Cycles and Trends

The very first speaker, Dr. Yu Jianing, President of Huobi University, shared on the topic “Digital Asset Outlook: Cycles and Trends” for his keynote speech. He said, “When we talk about digital asset, we always mention about the concept of the metaverse and Web3.” Dr. Yu touches on the golden age of Web3 and metaverse, going on to say that the history of the internet can be divided into three parts. The decade from 2000 to 2010, which is the first curve, the PC stage, is Web1; the next decade from 2010 to 2021, which is the second curve, the mobile stage, is Web2; lastly, the decade from now onward, which is a new second curve, the metaverse, is the golden age. “In the Web3 period, digital assets will play a play a very important role in the next decade,” he concluded.

He elaborated on how Web3 is reshaping all the industries with some examples: In April 2020, U.S. rapper Travis Scott performed a surreal concert named ASTRONOMICAL inside of the battle royale game Fornite; for NBA Top Shot, the NBA licenses reels to Dapper Labs, who then creates Moments, which are video highlights that have been attached to NFTs, from the footage; Starbucks’ plan to launch its latest Web3 initiative in partnership with Polygon Blockchain, and naming the NFT-based loyalty programme which is for its customers, “Odyssey”; the British Museum collaboration with LaCollection.io to launch a range of online Hokusai NFT artworks.

“If you want to know how to apply the metaverse and Web3 into our traditional business, you can think of these seven points,” he explained and listed down the seven elements of metaverse application, such as digital space and digital buildings, VR/AR and immersive experience, meta-human (digital human), NFT and digital collection, digital identity and avatar, CBDC and DeFi, and digital twins.

The reason why Dr. Yu believes that crypto is the future and that digital asset would be the fundamental of the next generation of the internet, was because he had seen, for example, how mobile payment has changed all the industries (i.e. WeChat Pay, Ali Pay, etc) because they incorporated the three-flow-in-one in the smart phone: information, financial, materials. “Blockchain, crypto, and digital asset could set up a rich infrastructure for all the societies, all the economies, and if they can integrate the three-flow-in-one’, I think that will change the industry as well,” he elaborated.

He shared that the Web3 is a kind of ownable internet with five points to take note of: ownable identity, oanable data, ownable asset, ownable platform, and ownable protocol. He went on to share his thoughts on the crypto market cycle which can be divided into six cycles, and the whole crypto cycle is actually a combination of these six cycles, namely: the macroeconomy cycle, the infrastructure cycle, the application innovation cycle, the project revenue cycle, the system building cycle, and the BTC halving cycle.

The top 10 trends in the next cycle according to Dr. Yu are: layer 2, blockchain-based on move programming language, GameFi, X and Earn, DeFi derivatives, DID, SocialFi, DAO, security, and digital asset management. He concluded that for him, the trend in digital asset is really positive, in addition, after the crash of FTX, it is his belief that we can put more trust in decentralisation. Dr. Yu shared a quote by William Gibson, “The future is already here. It’s just not evenly distributed.”

Singapore’s Stand on Web3

The next speaker to take the stage, Professor David Lee Kuo Chuen, GFI Chairman and SUSS Professor, expounded on the topic “Singapore’s Stand on Web3” for his keynote speech. “How do we look at the response of the regulators not only in Singapore, but the rest of the world, especially after what happened to LUNA, to FTX, and so on. Have the regulators changed their position,” he said. Prof Lee said that according to our Deputy Prime Minister, it is very important to read in between the lines, not everything that is crypto is bad; there are areas which the Monetary Authority of Singapore (MAS) and Singapore have been promoting.

“The global economy at the moment, is at a crossroad. Everything is unstable; the physical economy is not growing. All of the property prices have gone up very high…The only way to grow the economy is through the metaverse, which is the virtual economy. So everything that has to do with metaverse, be it hardware, software, you will have to pay attention, especially in Web3. That is the focus of this, “ he explained.

He pointed out that MAS has not changed their position about cryptocurrency, warning people that crypto is a high-risk investment but alas, people do not listen. In addition, the whole idea of the entire movement of crypto is to have peer-to-peer transaction, therefore if you want to invest, you should be investing in Web3. You should be supporting projects that are talking about digital asset ecosystem.

Prof Lee expressed that the regulators think that people are irrational, there is no reason why you should be buying and selling through an exchange. Then what are the reasons people buy through an exchange? He noted down three reasons: 1) laziness and ease of use, no need to worry about forgetting your password or private key; 2) a third party to help you stake so it eliminates the hassle and trouble of having to do it yourself; 3) borrowing and leveraging. “The only thing that is worth leveraging in the eyes of the regulators, is property. That is why 60%-70% of earnings from banks are in construction and real estate,” he explained the regulators’ point of view.

How to have a good return while you are interested in Web3 is to do your research and really understand what Web3 is all about. One needs to understand the philosophy of Web3 to ensure the returns are consistent and grow because only by then, you will be part of the ecosystem. Web3, after all, is about privacy protection.

“If you want to build big business, you build on PoW, not PoS. Because when the business grows big, it will cause systematic risk, then it will collapse. Then you will be the one in the news… Distributed ledger is the most inefficient ledger, a centralised ledger is the most important and efficient because whatever the centralised authority says, counts. But in a distributed ledger, you have to communicate, form consensus; it is the most inefficient ledger. But why do we deal with it? Because of privacy protection and security,” he continued.

He explained that companies that build on a strong foundation are the companies that will grow and flourish. Decentralisation is a process, it is not a product and not the objective, but a means to guarantee safety and likeness such that you know you are building on secure foundation for privacy protection and data security. With regards to hacking, he speculated that it will continue over time because if the crypto market continues its downward trend, then the people will have time on their hands to hack.

As for the metaverse, it is what the government wants to have; Korea and Japan already have regulations for the metaverse.

Panel Discussion ─ A Discussion on Regional Strategies and Perspectives on the Future of Digital Assets Amidst a Turbulent Industry

From left to right: Darren (Coinlive moderator), Tommy Deng (Managing Director of Beosin), Zixi Zhu (Web3 Investor at Matrix Partners), Goh Ying Hao (Founder of Web3SG), and Zack Yang (co-founder of FOMO Pay)

Prior to the networking session, a panel discussion comprising of Zack Yang, co-founder of FOMO Pay, Zixi Zhu, Web3 Investor at Matrix Partners, Tommy Deng, Managing Director of Beosin, and Goh Ying Hao, founder of Web3SG, shared their thoughts on the regional strategies and perspectives on the future of digital assets.

When asked to describe the confidence levels in the industry from both retail and institutional investors , and what can be done to bolster that confidence levels, Tommy went first to explain that their clients are doing audit but compared to the year before, the numbers have declined a lot. After discussing with their competitors, it was noted that they have decreased their chart for the audit, maybe as much as up to 50%. “Although the revenue is decreasing, but we are getting more spotlight on our industry so that is very good. From the security perspective, a lot of individual investors approached us saying that their wallets were hacked or their private keys were leaked. That is because they are very eager to get free mint or air drop. Every time they join, they get into a phishing website and lose all their money. Based on this, we developed an anti-phishing plugin probe to help them prevent phishing attacks,” he revealed.

Ying Hao shared from an NFT investor’s point of view and expressed that it is over, “In July, the big crash, I was down about $1.5M. Now I’m down about $2M. I bought my NFT here (he showed everyone the NFT he bought) for $20,000. Now it’s worth about $2K. If I have to give any advice now for NFTs, it is not to buy. Legitimately I do not know much about institutional investors. My issue now is that too many people here have lost too much money, so it is ok to take a chill pill and wait for a bit…the market now is very boring; there is very little liquidity to raise.”

Zack mentioned that he returned from North America recently and brought up the markets in Argentina and Brazil, that the annual inflation rate in Argentina is a whopping 30%, “Not everyone is lucky like us to stay in a country like Singapore. So we have very strong government support, very strong regulation like MAS but the retail market in Argentina does not have a better option in the traditional background.”

In response to the question, “Speaking on regulatory authority, do you think that support by the state, for instance, through MAS, is important in growing the crypto industry and why. I understand that it is good to protect people but is it useful in growing the industry,” Zack agreed that it is very important. He explained that FTX US is well protected because they are licensed in US but what suffers is FTX.com, which is unlicensed. Unfortunately for Singaporeans or most people in Asia, they can only invest through FTX.com. So he felt that in future, it will be regulated and it is just a matter of time.

Ying Hao, on the other hand, is a complete believer in the Web3 ecosystem with a 100% of his portfolio in crypto and does not believe we need regulations. “Now, the question is, do we need state regulation? As a full cyberpunk and full Web3 guy, I say no, I don’t believe in it,” was his stance. He explained that the digital space is the next stage, so why should it be controlled by regulations, hence state regulation is not needed.

Zixi stated that the decentralised cross chain liquidity pool is too small; it is better to be your own liquidity provider since you never know if this pool is dirty or not. Also, it is good to do your own KYC and cross chain to make the liquidity pool bigger.

Lastly, Tommy concluded the panel discussion by stating that without regulations, it is not ideal for some developing countries like the Philippines, Dubai, and the likes. For investors, it is very important to note that if you put a huge amount of money into the exchange, you need to check if there is dirty money involved. He also spoke briefly about FTX since it is hanging on everyone’s lips as of now; he believes that for the long term, FTX has no big impact in the mass market.