[Feature] The Crazy Surge of Chinese Concept Coins: How Much Speculation Is Behind the Mysterious Eastern Force?

Recently, a mysterious force from the East has caused another wave in the cryptocurrency market.

While cryptocurrency regulation in the United States has entered a white-hot phase, and there are rumors in Hong Kong that citizens may be allowed to participate in cryptocurrency trading in June of this year. "China concept" and "Hong Kong concept" projects have seen a surge in value. Chinese domestic projects that were once avoided by insiders have now become a hot commodity. However, there are also skeptical voices in the market. The price drops of projects that have risen due to the "China concept" are also astonishing. For example, CFX reached a high of $1.5 in March 2021, but after the news that the Securities and Futures Commission of Hong Kong had launched a consultation on the regulation of virtual asset trading platforms on February 20th, its highest increase in one day was more than 70%, and its seven-day increase was more than 4.5 times. However, the highest price on the 20th was only one-fifth of the highest point.

Which of these "China concept" projects truly adhere to the spirit of decentralization, have applications, innovation, and are the project teams working diligently? Or is it just the value of being "compliant" or the FOMO (fear of missing out) triggered by the "mysterious eastern force"?

Jinse Finance analyzed the four hottest "eastern power" concept coins:

Conflux:

A public chain project whose technical team mainly comes from "Yao class" of Tsinghua University. Its initial goal was to "surpass Ethereum", and it is the only compliant public chain project in China. At the end of 2018, it raised $35 million from multiple institutions such as Sequoia, IOSG, and Baidu. As a public chain project, it combines the PoW and PoS consensus mechanisms, and has collaborated with the Shanghai Municipal Government, McDonald's China, Oreo, and Xiaohongshu. Recently, China Telecom announced that it will collaborate with the project to pilot a blockchain-enabled SIM card (BSIM) in Hong Kong.

The innovation of this public chain project lies in its Tangle consensus algorithm, which abandons the simple chain-like structure. It first organizes blocks using the structure of a graph, and then uses the algorithm to determine a consensus on the order of these blocks that all consensus nodes agree on.

However, when competing with other projects on the international stage, Conflux's goal of "surpassing Ethereum" falls far short. In terms of applications, no well-known application in the industry is built on this public chain. Its pride is its 3,000-6,000 TPS, but the public chain Solana has achieved 60,000+ TPS.

However, because it is a compliant public chain in China, it provides a gateway for domestic enterprises and governments to participate in Web3 construction. For example, Xiaohongshu once showcased NFTs on the Conflux chain, and users could display the NFTs they minted on Conflux in the R-Space feature of its digital works function launched last year. In the current hype of "China concept" projects, this domestically produced "compliant" public chain may become the first choice for projects wishing to comply with China's Web3 regulations. In any case, it is better than those domestic alliance chains.

Cocos-BCX:

This is a game public chain; its aim is to build a complete multi-platform gaming environment and provide development convenience for blockchain game developers. It's a project invested by several well-known institutions in the industry, such as Binance, SlowMist, and OKEX, and its team has many years of experience in game development. The team has participated in the development of popular games such as "Fishing Joy" and "Fantasy Westward Journey". In the web2 game world, the team developed a game development engine called Cocos, which has 1.3 million registered developers.

Based on the Cocos-BCX platform, game developers can develop various blockchain games and issue their own game tokens. COCOS tokens can be exchanged with various game coins and props, and different game coins and props can also be anchored to COCOS for mutual exchange.

In reviewing the team's actions over the past few years, we can see that they have previously incubated Croswap.com, the first decentralized token exchange protocol that combines DeFi and NFTs. However, this is not directly related to gaming, and there hasn't been any breakthrough progress in the gaming industry that we've seen. After all, the major problem in the field of blockchain gaming is that the playability of games on the blockchain is greatly weakened by the performance of the blockchain. Without a proliferation of killer applications, it is unclear what the current value of Cocos-BCX is.

Alchemy Pay：

Cryptocurrency payment infrastructure, which proposes a real-time cross-gateway hybrid solution for cryptocurrency and fiat currency, allowing users to exchange and settle cryptocurrency and fiat currency in real-time within the system. Both transferring and receiving users can choose to use cryptocurrency/fiat currency as their payment or receiving method, which is currently one of the few payment systems in the industry that can automatically link fiat currency with cryptocurrency in real-time.

ACH is a token issued by Alchemy Pay for ecosystem incentives, system access costs, and governance. The total supply is 10 billion, of which 51% will be continuously mined through payments and financial ecosystem behaviors after the launch of ADPS2.0.

Comparing it with the payment industry leader XRP, we can find differences between them. XRP is mainly used for interbank settlements, while ACH is mainly used for commercial payments and settlements. In terms of payment channels, XRP mainly operates on the XRP network with XRP as the primary payment tool. Alchemy Pay, on the other hand, is a platform that supports both cryptocurrency and fiat payments, such as BTC and ETH.

As a hybrid payment platform, it may have a wide range of use cases in the compliance journey in Hong Kong. However, reviewing the historical information of the project reveals that its project partner, Liu Bin, once manipulated the HCC medical chain to reap profits from investors.

SelfKey:

The DID project is actually a platform for managing and using personal identity authentication. The token used is called "key". The project has built an identity wallet that individuals and businesses can use to control and manage their personal information and cryptocurrency portfolios. It also employs a concept called "verification request," which allows users to prove that something has been verified by a trusted party without revealing the information itself.

Although DID is a popular track in Web3, it is still in its infancy and the iterations are relatively slow. Because current non-financial Web3 application projects are developing with difficulty, there is still no DID system that has accumulated a certain network effect.

In Summary:

There are also well-known projects in various tracks such as Filecoin and The Sandbox, which are also "China concept" projects. They have passed the test of the market due to their wide applications and the confirmation of the last bull market, and therefore, they will not be analyzed as examples here. Among these Chinese projects, there are teams that are truly doing development work, as well as projects like Conflux that take the "compliance" route and are not so "decentralized," which meet the needs of teams that want to embrace Web3 under China's regulatory system. The series of new policies introduced by the Hong Kong government are indeed beneficial to the development of China's Web3, and it is hoped that domestic projects can catch up with this fast train and regain the time lost due to strict domestic regulation, rather than just repeating the capital game of price manipulation.