GCR

Our founder Joyce Yang was at the Asian Blockchain Summit in Taipei on July 2/3rd. This was arguably one of the most interesting and best conferences this year since the market picked back up, with many folks from North America, China, Korea, Japan and Southeast Asia all coming together. A number of the whales from China came, along with the largest exchange founders such as those from Bitmex and Binance.

The highlight of the conference was definitely the debate between Nouriel Roubini and Arthur Hayes, which was held off the record. While the polling results have shown that Arthur won the debate, Nouriel is still quite bitter about it. But truly, if you were actually present and listened to the entire debate, the answer was crystal clear. 

Nouriel claimed that cryptocurrencies were not scalable, not private, and not secure, but he addressed them in almost an uncivilized and comedic manner, through personal attacks and dismissive condescending statements. He bashed on the current state of scammy, retailed focused crypto market, while completely failing to recognize how nascent this space is and any of the good actors that are trying to build in this space. He lauded how China’s Wechat and Africa’s MPesa has already achieved the scalability and speed in payments, while ignoring the issue of privacy. On the other hand, Arthur came prepared and made his points logically and clearly. He emphasized that Bitcoin and cryptocurrencies give people another choice, and that’ll be increasingly valuable as societal digital transformations put us under more surveillance.

In partnership with the conference organizers OBITO.IO and BlockTempo, we have also interviewed Arthur Hayes with a number of other key execs, which we will release soon.

Along the way and through our conversations with different projects and communities, we are seeing an enlarging gap taking place between the East and West. This is observed through the pace of development among the local exchanges and projects, and also the direction in which they are developing towards. Companies are taking their own flavors of the blockchain to build something suitable for their audience, and that has resulted in very different product offerings in the market.

We are seeing this trend in areas such as blockchain tools and Defi. In the case of blockchain tools, for example, in Korea, given the ongoing push for real case adoption and gaming, we are seeing the rise of blockchain agnostic tools such as Bifrost and Supertree. Bifrost claims to be the first and only middleware platform between Dapps and protocols. The company builds permissioned versions of public chains and offer the option to have DApps to scale up and scale down in the amount of public/permissioned blockchain infrastructure. Supertree, on the other hand, uses meta-blockchain technology such as ETH, EOS, for game developers. It is developing a platform that combines the systems of the centralized and decentralized platforms for initial stable operations, but once nodes are secured, it will be changed to a fully decentralized dApp.

In Defi, we met with a native stablecoin that’s coming out of China. Dforce is launching this month a synthetic indexed USD stablecoin protocol and unlike Defi folks that are building on top of Ethereum, Dforce aims to build an integrated platform for blockchain-native DeFi and monetary protocols serving as back-bone infrastructure for DeFi. 

While many projects are interesting, the question that we want to emphasize is, that how can they achieve global adoption beyond their own jurisdiction? And do any of them really need global adoption? When we see the evolution in the last few years, we do come to recognize how being early in multiple markets will become a lasting advantage for the projects that have launched in the last few years.

On the exchange side, we are seeing increasing clarity and sophistication of data offered in this previously opaque space. Alameda Research has introduced a dynamic dashboard ( link: http://bit.ly/2XQBVS8) for real exchange volumes. The trading firm tested each exchange on six different criteria and it estimates that it trades 5% of all global crypto volume.  One stat says  “spot” trades of actual digital assets and derivatives, like bitcoin futures—trades $38 billion in real volume a day, and 87% of that happens on Asian exchanges, with just 9% happening on U.S. venues. Alameda also believes more crypto volume is real than Bitwise’s report’s claims. For OKEx and Huobi, which were founded in China, Alameda estimates about 70% of their transactions are authentic. 

We’ve also heard from sources that Huobi has laid off all of its US staff, whereas Coinsuper, a large exchange in China, has also laid off 70-80% of its staff from the bear market. One thing to caveat here though, in China, unlike the startups in the US, it is not atypical to fire a large number of employees given poor employee labor protection and traditionally unsophisticated management culture. Chinese firms scale up and down pretty rapidly all the time. And in case you haven’t been paying attention- Vietnam is now the 7th largest country by crypto trading volume. 

Other companies that we thought were super interesting and to keep an eye out for in Asia: Tagomi (US-based prime brokerage service but ramping up in Asia aggressively), Coinflex (physical futures and growing), Sparkpool (Ethereum mining pool in Hangzhou with over 25% of hashpower) and Starkware.

Disclosure: we don’t have any affiliation with any of the companies named above except Starkware, whom we’ve just started consulting with this month.