With one of the biggest crypto events in Asia happening across two days in a row, we bring you the Day 2 highlights of TOKEN2049.
With TOKEN2049 going strong for the second day of the event, we were right back at the Marina Bay Sands Convention Hall, after concluding Day 1 of one of the largest cryptocurrency events in Asia.
We attended the lineup of engaging panels and key speakers from the cryptocurrency space, and here are some our top panel picks for the Day 2 highlights of TOKEN2049.
Islamic Coin: Harnessing The Potentials In Islamic Finance
With Muslim countries such as the United Arab Emirates and Bahrain establishing crypto-friendly areas and regulations, it is not surprising that aspiring entrepreneurial teams will seek to bring the benefits of cryptocurrencies and blockchain in line with Sharia finance laws.
That’s where the HAQQ blockchain, along with its native token, Islamic Coin, comes in. Top on our list as one of the Day 2 highlights of TOKEN2049; Mohammed Alkaff Alhashmi, the co-founder of the HAQQ blockchain and Islamic Coin, and his team has launched the Sharia-compliant network to establish a fair and ethical decentralised financial system that follows the rules of Islamic finance. To remain compliant with Sharia finance rules, the project has seeked approval from the Sharia board, and the team only engages in private sales instead of an initial token offering to avoid collecting money from the community. Furthermore, 10% of any transaction will be donated to charity.
Holders of the token will be able to engage in Shariah-approved activities such as paying zakat or donations, and they will be able to engage with products that are built for the community. At the same time, ethical applications such as Haqq Social and Haqq academy that follow Islamic values will be created for social interaction and education.
Achieving True Mainstream Adoption In Gaming Through Web3
Web3 games are not popular with gamers yet, but what is the underlying reason for the lack of interest? Joseph Young, co-founder and Chief Investment Officer of Decentralized Gaming Ventures, believes the reason to be a result of Web3 gaming companies prioritising token prices, and not the actual gameplay itself.
User acquisition is a key element of Web2 games, and often accounts for more than half of a game’s budget since it is important to retain gamers. On the other hand, the incentives to retain users in Web3 games come in the form of token-based rewards; this ultimately dilutes the value of the token, which leads to a dip in user activity and retention and spirals into the death of the Web3 game.
The answer to resolving this dilemma, says Young, is to bring the focus back to creating real games for gamers. By doing so, this brings gamers who have a real interest in the gameplay mechanics, and not opportunistic users who are only interested in benefitting from the token price. Once the gaming profile for the game has been secured, the game can be upgraded with Web3 functionality that bypasses the current inefficiencies of today’s Web2 games, and usher in a booming Web3 gaming market.
Sreeram Kannan, the founder of the Ethereum restaking protocol, EigenLayer, took to the stage during TOKEN2049 to introduce the functionality and benefits that EigenLayer brings to the Ethereum ecosystem. The protocol introduces the idea of restaking tokens gained from staking ETH natively or with a liquid staking platform to participate in other Ethereum-based services.
What are the key properties of EigenLayer that makes it one of the Day 2 highlights of TOKEN2049? According to Kannan, Eigenlayer is able to hyperscale transactions, keep the cost of transactions low, reduce the latency of transactions, the ability to deploy light nodes to verify the compliance of the layer, and its modularity in customising modalities, fees, and other key functions. At the end of the day, the protocol will be able to help current rollups become faster and cheaper, while being able to transact gas fees with their native tokens.
Connecting Capital Markets And Growing DeFi
Decentralised finance (DeFi) protocols are reliant on oracles to provide real-time price updates, and one such key oracle in the market is Chainlink, a decentralised blockchain oracle network built on Ethereum that provides industry standard price feeds.
Sergey Nazarov, co-founder of Chainlink, feels that the missing link to true DeFi connectedness is in cross-chain interoperability. Chainlink itself has enabled a total transaction value of US$8.5 trillion. But to Nazarov, the main issue is that there are a number of cryptographic plus provable truths needed to make blockchain apps work, and there is no one integrated truth to bring these functions together.
To do so, the final piece of the puzzle would be the integration of cross-chain interoperability. That is what his team at Chainlink Labs hope to bring about through the Cross-Chain Interoperability Protocol (CCIP), which will bring about secure token transfers and cross-chain messages across different blockchains.
Virtual Fireside Chat: CZ
A must-attend event as part of the Day 2 highlights of TOKEN2049, Balaji Srinivasan, author of the acclaimed book ‘The Network State’, moderated the fireside panel with the CEO of cryptocurrency exchange Binance, Changpeng Zhao, who appeared on-screen for the session. To start off, Srinivasan fired off the question to Zhao, or CZ as he’s often known as, with regards to the use case of non-fungible tokens in Binance, and his thoughts on the next trend in Web3.
Addressing both the audience and Srinivasan on-screen, CZ humbly replied that he can only catch trends, not create trends. But with regards to NFTs in Binance, he believes the digital asset should not simply be relegated to the stereotype of expensive images. Interestingly, NFT themselves are not high-volume trading assets on Binance, and they require lesser bandwidth and throughput than cryptocurrencies.
But this would most likely change in the future as more industries such as ticketing and in-game assets benefit from the integration of NFTs. Right now, more applications and use cases need to be built around the digital asset before they can reach mass adoption.
What is the crucial factor to bringing the next 100 million users onboard Web3? To CZ, the obvious answer is the need for fiat on-ramps. A number of traditional financial institutes that provide on-ramp support for users have pulled back amidst the current bear market, and new ones have to enter the field to facilitate the movement of fiat and crypto. He quips that much like how the internet is not available to everyone on the planet yet, crypto too does not need to be universally adopted before mass adoption begins; a 5% to 10% adoption would be sufficient to get the ball rolling.
Fireside Chat: Cameron and Tyler Winklevoss
2023 has been a tough year for the Winklevii. After being embroiled in a duel of words with their former Earn programme partner, Digital Currency Group’s Barry Silbert, the US Securities and Exchange Commission (SEC) then handed them a kicker early this year by attempting to sue both parties over promoting the programme as ‘selling unregistered securities’.
Unsurprisingly, regulatory fairness and the brashness of the SEC was at the top of Cameron and Tyler Winklevoss’ minds as they conversed with their moderator, Balaji Srinivasan. The panel contemplated the relevance of The Howey Test, a favourite tool of the SEC to determine if an asset is a security or not, and its relevance in the digital age.
To the Winklevoss twins, the Howey Test predates the internet since its creation in 1946, and it should be updated to fit the current technological standard of today. At the same time, the SEC has to create rules that regulate the space in a fair manner so that users can abide by the rules and be compliant. Instead, the twins agree that the SEC has become the proverbial boogeyman of the cryptocurrency space, and being sued by the commission has become something of a badge of honour amongst crypto institutions.
With the free-spirited nature and go-get-‘em attitude that cryptocurrency projects embody, both Winklevoss twins ultimately see the digital asset as an ideal asset that embodies the American-styled free-market spirit.
Crypto Exchanges: Challenges and Opportunities Ahead
With the collapse of FTX at the end of 2022, the ensuing chaos left a number of key crypto institutions trampled and broken, while other exchanges like Binance and Gemini either made plans to withdraw from certain market jurisdiction, or found themselves mired in regulatory limbo. But adversity breeds opportunities, and existing exchanges have been quick to fill in the power gap left by the FTX vacuum.
On this Day 2 highlights of TOKEN2049, exchanges like OKX, Bitget, KuCoin, and Bybit, all of whom have been strategising and putting best practices in place to take advantage of the change in power balance. What are some of these practices? Lennix Lai, Chief Commercial Officer of OKX, reiterates that the platform has been turning to publishing their Proof-of-Reserves for greater transparency amongst their user base, all while ramping up their licensing application on a global scale.
On the other hand, Gracy Chen, Managing Director of Bitget, has taken the initiative to raise a US$300 million dollar protection fund for other crypto projects that protects them against counterparty risk, much like an insurance fund does. Ben Zhou, co-founder and CEO of Bybit, is also pursuing the publication of its Proof-of-Reserves while chasing a custody solutions strategy, and Alicia Kao, Managing Director of Kucoin, is ramping up the inclusion of tech and automation to further improve services for their clients plus retail customers.
With the exchanges having their own strategy in place, what is the catalyst that will spark platform growth and activity? Lennix believes that exchanges will have to progress beyond being a mere platform for trading tokens, and instead help their users access Web3. On the other hand, Ben believes that the platform should be a bridge that helps customers get to their destination cheaper and faster, although Grace adds on to that by saying that much like the weather, cryptocurrency exchanges need to understand more about interest rates and how the economic pool flows to the crypto space.
Fireside Chat: Jeremy Allaire
As the co-founder and CEO of Circle, the issuer of one of the largest stablecoin tokens in the crypto space, the audience was hanging on to every word that Jeremy Allaire spoke during his fireside session that was moderated by Haslinda Amin, Bloomberg’s Anchor and Chief International Correspondent, during this Day 2 highlight of TOKEN2049.
For Allaire, what Circle needs to do to encourage further growth is staying compliant with regional and local jurisdictions, along with solving the user experiences that current DeFi protocols still adopt; this involves eliminating the need for seed phrases and confusing terminologies such as gas fees. Moreover, increased regulation adoption is needed for the USDC stablecoin to be accepted globally.
What will be the tipping point for Web3 in terms of mass user adoption? For Allaire, that would be the moment when USDC is integrated into a number of use cases, along with the near erasure of transaction fees for users. With more users in Latin America adopting and using stablecoins, Circle is at least halfway there when it comes to the integration of its stablecoin.
At the end of the day, more developers and startups will be needed to work on projects that drive more utility, both for the stablecoin, and the Web3 and crypto space.
Missed the highlights of Day 1? Check out our summary here.