An Inflection Point in the Web3 Industry

Web3 is a concept about the development of the global information network, mainly related to blockchain-based decentralization, cryptocurrencies, and non-homogeneous tokens. The goal of Web3 is to establish an open, transparent, secure and credible network environment, allowing users to independently control their own data, identity and assets without relying on centralized platforms or institutions.

The Web3 industry is now at an important inflection point, from a niche, closed, technology-driven field to a broad, open, demand-driven field. There are three main reasons for this shift:

• Both the number of users and the market value of the encryption industry are growing rapidly, indicating the popularity and recognition of the encryption industry. According to [DappRadar] data, as of October 2021, the number of users in the global encryption industry has exceeded 120 million, a year-on-year increase of 600%; the market value of the global encryption industry has exceeded 2.5 trillion US dollars, a year-on-year increase of 300%. These data show that more and more people are beginning to use and trust the services and products provided by the encryption industry, and the encryption industry has changed from a marginalized field to a mainstream field.

• The technological innovation and ecological construction of the encryption industry are constantly improving, which shows the vitality and potential of the encryption industry. In the past year, many new technologies and projects have emerged in the encryption industry, such as Layer 2 expansion solutions, cross-chain bridging protocols, metaverse platforms, NFT markets, etc. These technologies and projects not only improve the performance and functions of the encryption industry, but also enrich the application scenarios and user experience of the encryption industry. The encryption industry has changed from a single field to a diversified field.

• The social influence and policy environment of the encryption industry are gradually improving, indicating the value and legitimacy of the encryption industry. In the past year, the encryption industry has received the attention and support of many social and government agencies, such as UNESCO, the US Securities and Exchange Commission, and the People's Bank of China. These institutions and agencies not only recognized the contribution of the encryption industry to social development and economic growth, but also formulated some policies and regulations that are conducive to the development and regulation of the encryption industry. The encryption industry has changed from a hidden field to a legalized field.

On August 3, Hong Kong cryptocurrency exchanges HashKey and OSL announced on the same day that they had been approved by the Hong Kong Securities Regulatory Commission to upgrade their No. 1 and No. 7 licenses, expanding their business scope from professional investors to retail investors. The Web3 industry is now at an important inflection point, from a niche, closed, technology-driven field to a broad, open, demand-driven field. This shift presents historic opportunities and challenges for the Web3 industry.

Importance of RWAs

RWA (Real World Asset) refers to those assets with real world value, such as real estate, stocks, bonds, etc. RWA is an important part of DeFi (decentralized finance), and it is also the future direction of DeFi. The introduction of RWA can bring the following three benefits to DeFi:

• RWA can bring more liquidity, diversity and stability to DeFi. At present, DeFi mainly relies on cryptocurrencies as collateral and transaction medium, which leads to insufficient liquidity, insufficient diversity and low stability of DeFi. By connecting RWA with DeFi, real-world assets can be injected into DeFi, thereby increasing the capital scale, asset types and value anchoring of DeFi.

• RWA can provide more efficient, more convenient, and lower-cost financial services for real-world assets. Currently, real-world assets are subject to many restrictions and obstacles in the traditional financial system, such as high intermediary fees, cumbersome legal procedures, and strict regulatory requirements. By connecting RWA with DeFi, blockchain technology and smart contracts can be used to realize rapid financing, flexible mortgages, security guarantees, etc. of real-world assets.

• RWA can create more value and income for real-world assets. At present, real-world assets are subject to many constraints and solidification in the traditional financial system, such as inefficient market mechanisms, single income model, and lack of innovation motivation. By connecting RWA with DeFi, blockchain technology and smart contracts can be used to realize the digitization and uniqueness of real-world assets (such as NFT), or to realize the common governance and distribution of real-world assets (such as DAO).

RWA is an important part of DeFi and the first step towards financial digitization and digital finance. However, the introduction of RWA also faces legal, regulatory, trust, evaluation and other difficulties, and requires continuous exploration and innovation. At present, there are three main modes for the realization of RWA: legal mode, trust mode and token mode. These three modes have their own advantages and disadvantages, and need to be selected and combined according to different RWA types and scenarios. In addition, the development logic of RWA-Fi (the combination of RWA and DeFi) needs to follow the principles of standardization, decentralization, diversification and community. These principles can help RWA-Fi establish unified standards and specifications, achieve true decentralization, cover more RWA types and fields, and form an active community and ecology.

discovery of new value

The main function of Web3 is to discover value, encapsulate value, and circulate value, not just to run traditional value on the chain. Therefore, as the value network of the digital economy, the innovation of Web3 should mainly focus on value discovery. In the digital age, technological innovation will generate new value. In the current era of digital assets and economics based on AI technology, artificial intelligence technology is widely used and innovated in various fields and industries, and it will have a profound impact on the value discovery of digital assets. Influence.

On the one hand, the AI era will spawn more digital assets, including data, algorithms, models, platforms, etc. These digital assets will become an important resource for enterprises and individuals to create value and competitive advantage. For example, data is the core asset of the AI era, which can be used to train algorithms, generate models, and provide services; algorithms are the core capabilities of the AI era, which can be used to solve problems, optimize processes, and create products; It can be used to predict the future, analyze the current situation, improve the effect, etc.; the platform is the core carrier of the AI era, and it can be used to connect users, integrate resources, expand functions, etc.

On the other hand, the AI era will also improve the efficiency and accuracy of digital asset value discovery. By using AI technology for data analysis, market forecasting, risk assessment, etc., the potential value and demand of digital assets can be better revealed. For example, data analysis can help users understand their own behaviors, preferences, needs, etc., and provide personalized services and recommendations; market forecasting can help users grasp market dynamics, trends, opportunities, etc., and provide reasonable decisions and investments; risk Evaluation can help users identify the source, degree, impact, etc. of risks, and provide effective prevention and response.

The discovery, circulation, and operation of these new assets are the main tasks of Web3, and it is also the main solution to the current development dilemma of Web3 and the stagnation of the encryption market. Web3 needs to use blockchain technology and smart contracts to realize secure storage, free trade, and fair distribution of digital assets. Web3 also needs to use NFT technology to realize unique identification, verifiable proof, and traceability of digital assets. Web3 also needs to use DAO technology to realize the common governance of digital assets, collaborative innovation, incentive activation, etc.

Web3 needs to discover new value. In the digital age, technological innovation will generate new value. In the current era of digital assets and economics based on AI technology, artificial intelligence technology is widely used and innovated in various fields and industries. Value discovery has profound implications.

In conclusion

The inflection point of the Web3 industry, the importance of RWA-Fi (traditional asset on-chain) and the discovery of new value are all interrelated and influential, and together they constitute the development logic and value system of the Web3 industry:

The inflection point of the Web3 industry is driven by factors such as the rapid growth of the number of users and market value of the encryption industry, the continuous progress of technological innovation and ecological construction of the encryption industry, the social impact of the encryption industry, and the gradual improvement of the policy environment. These factors all indicate the popularity and recognition, vitality and potential, value and legitimacy of the encryption industry, thus providing a broad market space, a strong technical support, and a good social atmosphere for the Web3 industry.

The importance of RWA-Fi (on-chain of traditional assets) is determined by the development needs and direction of DeFi. DeFi is one of the core applications of the Web3 industry. It is a decentralized financial service based on blockchain technology and smart contracts. DeFi needs to introduce RWA to increase its liquidity, diversity and stability, and at the same time provide RWA with more efficient, more convenient, and lower-cost financial services. RWA is an important part of DeFi and the future direction of DeFi.

The discovery of new value is determined by the new value generated by technological innovation in the digital age. The digital age is a digital asset and economic period based on AI technology. Artificial intelligence technology is widely used and innovated in various fields and industries, and it will have a profound impact on the value discovery of digital assets. The AI era will generate more digital assets, such as data, algorithms, models, platforms, etc., and improve the efficiency and accuracy of value discovery of digital assets, by using AI technology for data analysis, market forecasting, risk assessment, etc. The discovery of new value is one of the main functions of the Web3 industry and one of the innovation drivers of the Web3 industry.

The Web3 industry is an open, transparent, secure and credible network environment based on blockchain technology and smart contracts. It realizes digital assets and the real world through the introduction of RWA-Fi (traditional asset on-chain) and the use of AI technology. The connection, circulation and creation of assets provide users with more choices, services and benefits.

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