Yesterday, the Over the Moon—Chasing Waves Web3 summit was held in Hong Kong. This event was hosted by MetaStone and Odaily, co-organized by MixMarvel and AWS, CREGIS, Jasmy, HOPE, Souff l3, LD Capital US, ArkStream Capital, SevenX, Jubi, Supported by top partners such as zkMe.
The second roundtable was hosted by Yanelis, director of MetaStone IR and Asia-Pacific investment. Five guests were invited to discuss the theme of The Development of Web3.0, namely: Nick, director of MetaStone Innovation Fund, Lin, head of Deribit Asia-Pacific region, domestic Chen Gang, Head of Family Office, Marco, Cregis Operations Director, and Dr. Yu Jianing, President of Uweb.
Nick believes that Hong Kong has four major advantages in the Web3 field:
One is the unique geographical advantage. Being adjacent to the mainland can provide more convenient transportation for all Web3 builders, and also make it easier for Beijing, Hangzhou and other Web3 core areas to access the global capital market;
The second is the perfect deposit and withdrawal channels. With the release of restrictions on Web3 in Hong Kong, more predators in the traditional financial circle are willing to invest funds in this track, and more traditional funds enter the market;
The third is the accumulation of talents. The Hong Kong government has introduced a series of fund talent support plans, and the implementation of Hong Kong policies has also enabled many blockchain innovative companies to quickly access the incremental market and open up the entire Asia-Pacific market;
The fourth is the compliance construction of key nodes. In the period of uncertain regulatory policies in North America, Hong Kong, the worlds second largest IPO market, provides a safe haven for the development of the global encryption industry in a timely manner.
Nick added that MetaStone hopes to find the best Asia-Pacific entrepreneurs and technologically innovative projects in Hong Kong, which will accompany the projects growth for a long time, not only with financial support, but also in business models, project route planning, publicity and other aspects. Lead project development.
Chen Gang believes that governments in various regions have different attitudes towards cryptocurrencies at present. Hong Kong firmly supports Web3 from top to bottom at this special time node, and has issued a series of favorable policies. In the future, Hong Kong will definitely occupy a very large role in the global encryption industry. Important position. He added that at present, Old Money’s allocation of encrypted assets is relatively low, less than 1/3 of institutions and the average allocation ratio is only 1%. As representatives of Old Money, they are very optimistic about the future development potential of digital assets, but they need to solve several core issues: first, security; second, liquidity; and third, profitability guarantee.
Chen Gang said that after screening many encryption funds, they finally chose MetaStone for cooperation. The concepts, working methods and investment values of the two parties are highly compatible. The two parties are committed to expanding the allocation ratio of traditional Old Money in digital assets in the future.
Marco said that the wallet is a very important traffic entrance in the Web3 world. The MPC wallet function of Cregis can not visualize the private key, so it can effectively reduce the problem of digital asset theft. In the previous ARB airdrop, a large number of users private keys were leaked. Avoid millions of dollars in lost funds with the Cregis platform. Marco said that they currently have more than 5,000 B-end users, with a revenue of US$5.83 million last year, and they have also seen many customers who had business dealings enter Hong Kong.
Dr. Yu Jianing believes that the current virtual asset business in Hong Kong is gradually being incorporated into the regulatory system, and before the comprehensive regulation and licensing in June this year, it actually applies to the principle of permitted if not prohibited by law. This means that under the condition of complying with the laws of Hong Kong, anyone can carry out virtual asset-related business at present. The representative case is the virtual asset exchange shop on the streets of Hong Kong. However, after June, the virtual asset license system will be implemented soon, and the supervision will inevitably become stricter. Regulatory compliance is a comprehensive new start, and it is the beginning of embracing virtual assets in the true sense. After June, the huge value of Hong Kongs compliance will soon appear, and the logic of the compliance bull market that will occur in the United States from 2019 to 2021 may A full repeat in Hong Kong.
Regarding investment opportunities, Dr. Yu Jianing believes that we can focus on the track combining Web3 and AI. He believes that AIGC is the core attribute of Web3, Web3 cannot only be regarded as the Internet of value and the Internet that can be owned, AIGC is also the core pillar of Web3.
first level title
The following is the record of the roundtable dialogue, organized by Odaily:
Yanelis: First of all, please introduce yourself briefly.
Nick：Hi everyone, Im Nick, Director of MetaStone Innovation Fund. MetaStone is an investment group focusing on Web3 and other cutting-edge technologies. Its business modules include venture capital, hedge funds, quantitative FOF, innovation funds, and accelerated incubation. The total size of the companys management funds exceeds US$1 billion.
Lin：Hello everyone, Im Lin, and Im in charge of Deribits Asia-Pacific business. We are the worlds largest encrypted options derivatives exchange.
Chen Gang：Hello everyone, I am Chen Gang, from the traditional wealth management financial industry, and I can be regarded as a representative of Old Money.
Yu Jianing：Hello everyone, I am Yu Jianing. I founded Huobi University in 2018, and this year I founded a new Web3 educational institution Uweb. I used to be the director of the Industrial Economics Research Institute of the Information Center of the Ministry of Industry and Information Technology, mainly doing policy research. In the past few years, I have provided policy advice for countries and regions such as Singapore. Today I would like to share some of my observations.
Marco：secondary title
Q1
Yanelis: In the continuous development of the cryptocurrency and blockchain ecosystem, the most important opportunities and challenges are actually regulatory laws and compliance standards. How do you think Hong Kong has a certain competitive advantage in this field?
Nick：Before the Hong Kong government introduced a series of encryption policies, Singapore has always been considered the terminal station of the Asia-Pacific encryption region, and the situation has changed today. Compared with Singapore, Hong Kong has a series of unique advantages.
First of all geographical location. Hong Kong is adjacent to the mainland, which provides a very convenient mode of transportation for all Web3 practitioners and builders. At the same time, the Hong Kong government is also actively launching a series of talent support programs, which also makes it easier for several Web3 core construction areas in the mainland (Hangzhou, Beijing, Dali) to access the global capital market. Singapore may be a paradise for institutions and investors, but it is relatively limited for Web3 entrepreneurs.
Followed by access to gold. After years of traditional financial development, Hong Kong and the mainland have a very complete channel for deposit and withdrawal. MetaStone has also cooperated with some traditional financial institutions and family offices, and they are also very interested in Crypto. Now with the compliance of Hong Kong, these traditional funds are more willing to put money in. Hong Kongs complete access to gold has brought growth to the entire encryption market.
Furthermore, Hong Kong has a large talent base. After the implementation of the U.S. encryption policy in 2017, companies such as Coinbase gained a huge user base in a short period of time to achieve growth. The same scenario will happen again in Hong Kong, where some innovative Web3 companies can quickly gain growth through Hong Kong and open up the entire Asia-Pacific market.
Finally, at the key node, Hong Kong became a safe haven. Last year, there were a series of black swan events in the encryption market. Many encryption companies such as FTX went bankrupt. The uncertainty of the US policy also caused panic in the entire industry. At this critical juncture, Hong Kong, as the second largest IPO market in the world, has released a signal of goodwill to Crypto, which is a great benefit to the entire encryption circle, which can be withdrawn from the currency price. To sum up, I think Hong Kong has advantages in the development of Web3.
Chen Gang：Looking at it from another perspective, I think that if there is a choice, various countries and governments will not support the development of the encryption industry; but now they are facing a prisoners dilemma, and the policies of various countries cannot be unified. , some neutral.
At such a time point, the Hong Kong government fully supports virtual assets and issues a series of policies. Although Hong Kong is backed by the mainland of the motherland and relies more on the ecology of the Chinese circle, I think that in the future, not only in the Chinese circle, but in the entire global encryption industry, Hong Kong will definitely occupy a very important position.
Yu Jianing：Recently, many people posted in Moments that because the policy supports the emergence of USDT and other cryptocurrency exchange shops on the streets of Hong Kong; in fact, these exchange shops are products of non-compliance. What is non-compliance? Its legal logic is that if the law does not prohibit, it is allowed, and anyone can do it. Should Hong Kong be compliant in the future? It must be regulated, and the encryption industry must be brought into regulation. It is unclear what the fate of these exchange shops will be after the license system is implemented on June 1.
Therefore, our conclusion is: Hong Kong is indeed in a state where there is no prohibition or permission, and anyone can do virtual asset-related business, but this relaxed environment will end in June.
Is strict regulation good? We can consider it from two perspectives:
One is a purely entrepreneurial perspective. Previously, exchanges could provide Hong Kong residents with a variety of cryptocurrency transactions without restrictions; after June 1, even after entering the exemption period, there is a high probability that they can only provide Bitcoin, Ethereum, etc. to retail customers and ordinary people. A handful of cryptocurrency exchange services.
The second is from an institutional perspective. In the past, many exchanges did not have a license. Although it was not illegal, it was not compliant, and banks would not be willing to do business with crypto institutions. Hong Kong is currently still an area in the world that is relatively easy to be closed by banks for virtual asset transactions. After June 1, if crypto institutions can be licensed for transactions, the problem of closing accounts will be greatly reduced, because more financial institutions will be willing to provide services.
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Q2
Yanelis: Will Hong Kongs policy support and development of Web3 technology speed up the pace of blockchain technology and the Web3 ecosystem?
Marco：I think theres definitely going to be a positive push. At this conference in Hong Kong, we saw a lot of Web3 practitioners come here, not only investors, but also major project parties. We also saw many customers who have dealt with our wallet business since 2019. Came to Hong Kong. In addition, according to our observation of the data on the customer chain, the transaction volume of their funds on the chain has increased by 10 times in the past year. I think this very intuitively reflects the rapid growth of the encryption industry.
Nick：Under the general framework, the Hong Kong government has formulated a basic framework, what can be done in Hong Kong, and provided financial support to build a cyberport and a technology park, and various colleges and universities have also set up professional talent training for the blockchain; And Hong Kong is connected to the mainland, connecting many Web3 builders.
Before the new policy was promulgated in Hong Kong, entrepreneurs in the mainland and other Asia-Pacific countries were not at an advantage in terms of financing in the financial market and Web3 compared to projects in North America. In the past one or two years, many project parties had to go overseas to seek funds.
In addition, before the policy is implemented, many institutions and investors are afraid to put a lot of money into this market. With the advancement of Hong Kongs compliance process, they are more willing to trust entrepreneurs in the Asia-Pacific region and are willing to give financial support. In the future, whether it is VC, exchanges, or media, they can form a better closed loop in the Asia-Pacific region and help project parties grow better. Hong Kong must be a good thing for project parties or Web3 builders.
Chen Gang：At present, the proportion of digital assets allocated by traditional institutions or Old Money is very small. Last year, data showed that only about one-third of high-net-worth individuals invested in virtual assets, and the average allocation ratio was below 1%. At present, the total market value of encryption is only 1.3 trillion U.S. dollars, while the investable assets of traditional Old Money are about 200-300 trillion U.S. dollars. As long as a part of this money enters digital assets, it will promote the great development of the encryption market.
As a representative of Old Money, we are very optimistic about the development of digital assets in asset allocation, but there are still some core issues that have not been resolved.
One is security. There are frequent security incidents in the encryption market. For example, Jay Chou’s NFT was stolen some time ago. There are still many institutions worried that the events of LUNA and FTX will happen again, and the assets will not be returned. Maybe in the traditional financial field, such as the bankruptcy of Silicon Valley Bank, the Federal Reserve will take the blame for me and ensure the safety of deposits.
The second is liquidity. At present, the liquidity of digital assets may be better than other investment categories, and the global 7*24 hours of non-stop trading; although the current trading volume is not very large, but the future can be expected.
The third is income protection. The income of encrypted assets is not a regular order of magnitude growth (such as 5%, 10%), usually 100%, 200% are very common, but this kind of profitability guarantee is invisible to traditional institutions. In addition, there are also many practical difficulties in daily supervision, audit and fair assessment of net worth, which may be the reason that hinders traditional institutions from entering the market.
Of course, I think that with the expansion of the digital asset ecosystem in the future, more traditional funds will definitely enter the ranks.
Marco：Let me tell you about how we promote the development of Web3 from a security perspective. We also hope that through products and technologies in the future, we can provide a safer asset management tool for all Web3 entrepreneurs and traditional old money.
Cregis is based on MPC (Multi-Party Computing), combined with TEE (Trusted Execution Environment) and SGX sharding management system, sharding the private key of the blockchain address, and building a multi-signature wallet system different from traditional private key wallets . Compared with similar products, Cregis does not host the users private key shards at all during the service process, so the assets of Cregis users are difficult to be lost due to malicious third-party behavior, and the security is superior.
In addition, Cregis also creatively provides a wealth of financial collaboration management functions, allowing users to share signature rights equally and limitedly, to achieve financial approval, smart payment management and other complex financial management behaviors; cooperate with billing statistics, transaction currency statistics, etc. functions, enabling users to obtain an unprecedented collaborative management experience of digital assets.
secondary title
Q3
Yanelis: The changes in Hong Kong’s encryption regulatory policies have also promoted the rapid development of the web3 industry. You are all concerned about and are leaders in the web3 industry, and you also play different roles in the industry. Under Hong Kong’s policies, your platform How did it develop?
Lin：In fact, there are very few compliant exchanges in Hong Kong now. Only spot exchanges will be opened after June, and only a few coins are open to retail investors. The retail market in Hong Kong is also very small, not as high as everyone expected, and it will take time to develop.
At present, the biggest pain point in the encryption trading circle is the banks, especially the thunderstorms of many banks in the United States. The biggest problem everyone faces is deposits and withdrawals. The Hong Kong government is already communicating with some banks, and some good news will be announced by the end of April or early May. If the bank has made great progress, the deposit and withdrawal channels will be smooth.
Hong Kongs status as a frontier city in the encryption circle may remain unshakable for some time to come, especially the tightening of US regulations has put a lot of pressure on the encryption circle. If there is any good news in Hong Kong, it can greatly improve the liquidity of the entire industry.
Nick：Under the Hong Kong New Deal, Metastone, as an institutional VC, hopes to find the best Asia-Pacific entrepreneurs and the most innovative projects in Hong Kong, and will work with entrepreneurs to build the Web3 ecosystem.
secondary title
Q4
Yanelis: Compared with the encryption bear market in early 2019, the venture capital invested in web3 StartUp in 2023 will increase by 3.1 times, up to $1.45 billion. It is also a bear market. We have seen the popularity of the digital asset industry, and many traditional financial institutions and enterprises have also begun to get involved. In addition, from the perspective of the company where the guests work, how to find suitable solutions in the field of Web3 and blockchain? Investment Opportunities?
Marco：Regarding investment opportunities, I would like to Amway ourselves (Cregis Wallet). In May, we will have a major innovation to solve the problem of inability to interact with DAPP caused by the fragmentation of the private key of the MPC multi-party computation. In the past, corporate users may have millions of dollars in their accounts, but they could not generate income. Now they can generate greater value on the chain through our wallets.
Yu Jianing：The track that should not be ignored is the combination of Web3 and AI. Web3 and AI are not in conflict, they are complementary. We believe that AIGC is the core attribute of Web3. Web3 cannot be regarded as the value Internet and user Internet. We must see the way of information creation. AIGC is also the core pillar of Web3. Many people say that if you engage in AI, you will not engage in Web3. This sentence itself is a logical error.
We have made an AI education product called Uweb.AI, which is an AI-based Web3 learning product. For example, you have one coin today, but you don’t know the specific information; you can enter it in our product and get an answer from artificial intelligence, which not only tells you the information, but also tells you how to trade. It is currently in the internal testing stage, and the product is not yet perfect, but it is at least a combination of Web3 and AI, which proves that there are many things that can be done in this track.
Chen Gang：Speaking of Web3, are its investment opportunities only cryptocurrencies? Actually not, it has various investment opportunities. As a traditional family office, we mainly do two things, one is to do macro research, and the other is to select partners.
When we screen our partners, we pay more attention to what they are doing and what they can do for us, so that we can stand on the shoulders of giants. Take Metastone as an example. We investigated a lot of cryptocurrency hedge funds, contacted them for about 8 months, and invested in some projects. During this process, we found that everyones ideas, working methods, and investment values are very similar, so we finally chose them as partners. We hope that the cooperation between the two parties can increase the proportion of digital assets in the asset allocation of traditional institutions.
Lin：We will launch a new product recently, which is the volatility of Bitcoin. Many traders may go long or short. Volatility is easier than simply going long and short, and the winning rate is also higher. Users do not need to judge whether to go long or short. Especially in the context of the current exhaustion of liquidity, the operation of a large player may affect the market. As long as the market fluctuates, the volatility can be used to obtain income.
Nick：From the perspective of primary investment, I think the ZK track must be a hot spot in the market, far better than OP. ZK has two core components, namely the sorter and the integrator. The sorter is to package and upload transactions, and the integrator is to integrate a large number of transactions and form authentication. But ZK also has two problems, one is a centralized sorter, and the other is limited by hardware and algorithms when generating certification. You can also pay more attention to the market, and we are also looking for teams with innovative solutions in this area.
Another thing worthy of attention is the compatibility with Ethereum. Products with better compatibility with Ethereum can reach a large number of user groups at an earlier stage. When investing or participating, you can also choose different projects to participate in from different time distributions in the short-term, medium-term, and long-term.
Finally, there is the problem of homogeneous products. Now there are many products of the same type or extremely high homogeneity in different public chains. In the next round of bull market, there will definitely be some innovative projects or gameplays, and everyone can learn more about the innovations of the projects themselves.
Yanelis: Thank you again for the wonderful speeches of all the guests. It is really full of dry goods. Metastone will also welcome the east wind of Hong Kong policy with all new and old partners, so that more projects can be implemented better. Thank you all guests!
