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Shi Xingguo Talks with Jack Kong: Hong Kong's Web3 Opportunities and FTX's Long-term Impact in the Encryption Winter

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There is opportunity in danger, but there is no chance

Original source and author: Huoxun Finance

On the evening of November 14th, the thirteenth episode of the fifth season of Guanhuo Langya Bang was broadcast, and the owner of the pavilion Mr. Shi Xingguo (member of the China Computer Federation Blockchain Special Committee, founder of Hyperchain, winner of the National Science and Technology Progress Award, former chief engineer of the Internet Laboratory of the Institute of Software, Chinese Academy of Sciences) in this issue is Jack Kong (Na The founder of Nano Labs, a listed company on Starq, has ten years of experience in the industry, and successfully incubated leading companies such as the first stock in the blockchain industry and the first stock in the Metaverse). The two big names jointly discussed Hong Kong's latest "Policy Declaration on the Development of Virtual Assets in Hong Kong" and the problems exposed behind the FTX liquidity crisis, as well as hot topics such as the new public chain economic model and NFT.

Regarding Hong Kong's "Declaration" that ignited the Chinese Web3 circle, Jack Kong said that he and Hong Kong government officials and Web3 academia I have communicated with professionals and entrepreneurs, and everyone’s views are very positive. "The current policy allows us Chinese, especially Chinese from the mainland, to have a place to start a business." He suggested that Chinese Web3 entrepreneurs register their companies in Hong Kong and use the organizational form of the company to pay attention to Hong Kong's future policies at a very low cost. Variety. He said: "Generally speaking, for Chinese Web3 entrepreneurs, Hong Kong is the only place that can compare efficiency with mainland China and compare the legal system with Europe and the United States. Therefore, it is recommended that entrepreneurs start from Hong Kong in the future. Then go to Singapore for exchanges and development, and then go to the United States to try to scale up.”

Regarding the topic of Hong Kong, Shi Xingguo said that this declaration is enough to ignite Recalling the expectations of himself and his peers for the future of Hong Kong, he is most concerned about the digital Hong Kong dollar in this declaration, as well as the Hong Kong government's understanding of Web3 itself. "Considering the freely convertible nature of the Hong Kong dollar itself and its peg to the U.S. dollar, I feel that the digital Hong Kong dollar has a lot of room for imagination." In addition, what pleased him most about the promulgation of the "Declaration" is that The Hong Kong government's positioning of Web3 itself is because it clearly regards Web3 as an opportunity and trend, and affirms the status of virtual assets in the future financial infrastructure. "The attitude of the Hong Kong government will help the industry to establish order faster in the early stages of development. Such an order will prevent bad money from driving out good money, and to a certain extent, will allow the stigmatized virtual asset industry to regain market trust.”

In the discussion of the FTX liquidity crisis, Jack Kong believes that this will exacerbate the bear market performance in the short term, but in the long run it will undoubtedly give more impetus to the encryption industry: "This will prompt many exchanges to announce Proof of your own assets, the industry will develop in a healthier direction in the future. The more pragmatic the financial infrastructure, the more solid the foundation of the entire industry, the stronger the explosiveness of the industry.”

For the new track opportunities of Web3, Shi Xingguo said he is optimistic about three directions: the first is the combination of physical rights and digital collections or NFT; the second is private domain traffic operation; the third is It is the community building of the brand, or the ecological construction of the brand.

【Highlights of this issue】

1. How can Web3 Chinese entrepreneurs seize this opportunity in Hong Kong?

2. What are the characteristics of each active Web3 entrepreneurial region in the world?

3. What warnings does this crisis of FTX bring to the encryption industry?

4. Judging from the current development process of the metaverse, which part of the infrastructure development do we need to overcome the most?

5. Is there a more suitable economic model and business logic for the new public chain?

6. Which new track opportunities are you optimistic about in Web3?

7. What is the ideal NFT business model?

8. How should Web2 enterprises enter Web3?

[Interview Record] (deleted)

Section 1: Web3, Metaverse

【Shi Xingguo】

The Financial Secretary of Hong Kong recently issued the "Policy Declaration on the Development of Virtual Assets in Hong Kong", officially becoming a bridgehead of global virtual assets In contention. Coupled with Hong Kong's recent frequent release of friendly signals towards the Web3 industry, many Web3 practitioners feel excited and encouraged.

The manifesto sets out the Hong Kong government's policy stance and approach to develop a vibrant virtual asset industry and ecosystem in Hong Kong, and introduces pilot programs including In 2022, Hong Kong Financial Technology Week will issue non-homogeneous Token (NFT), green bond tokenization and digital Hong Kong dollar.

In terms of supervision, while the Hong Kong government is stepping up preparations for the new virtual asset service provider licensing system, it is also willing to contact the global virtual asset industry and invite relevant exchanges Explore business opportunities in Hong Kong.

You were also in Hong Kong when the declaration was released. Interpretation of Encryption New Deal" was very popular, the live broadcast lasted for 5 hours, and the broadcast volume of the whole network was nearly 500,000 times.

What changes have you experienced in Hong Kong? What do you think is the future development potential of the virtual asset market in Hong Kong? How can Web3 Chinese entrepreneurs grasp this opportunity in Hong Kong?

【Jack Hole】

I think Hong Kong’s policies are very friendly overall. I have communicated with Hong Kong government officials, Web3 academics, and entrepreneurs, and everyone’s views are very positive. The current policy allows us Chinese, especially those from mainland China, to have a soil to start a business. In the past, it might have been regarded as a street mouse or there would be some objections and criticisms. So far, this problem has been solved.

The second is Although the current policy is very loud, it may take time for the specific rules to be implemented.

For some financial trading institutions, there may still be many difficulties and obstacles to be resolved during the entire landing process. It will take some time to solve all the problems at any time.

For entrepreneurs, I think all Chinese Web3 entrepreneurs should go to Hong Kong to register their companies, even if DAO is the more cutting-edge future.

Only in the organizational form of a company can we pay attention to changes in Hong Kong's future policies at a very low cost, this is one of them. The second is that if Sino-US relations continue to be tense and uncontrollable factors persist in the future, we feel that the risk of being sanctioned in Hong Kong will be a little lower than in the United States and Singapore.

Of course, this is not to appeal to everyone to give up Singapore. We think Singapore is very good, and the United States is also very good. It's not an either-or question, but each side has its own resources. At present, Hong Kong is more suitable for mainland entrepreneurs.

The third is that in the long run, if a company wants to grow very large, it can only rely on two countries. Either rely on the United States, or rely on China. If you think that the entrepreneurial track has the possibility of scale, you might as well set up a site in Hong Kong first, and maybe you can get close to the water when the Chinese market opens up the new Web3 industry in the future.

The Hong Kong government is very fond of Web3 technical talents. Mr. Shi, as a master of Web3 technology, is Mr. Shi interested in considering visiting Hong Kong? What do you pay attention to in this Hong Kong Declaration?

【Shi Xingguo】

You hit it straight The focus of many people's concerns, including how to cut into this trend of Hong Kong's development.

It is indeed very attractive to establish a Web3 startup company in Hong Kong. Hong Kong itself has the status of a global financial center, and I am more concerned about the development of the industry in Hong Kong. It’s just that in the past few years, Hong Kong’s performance has been quite satisfactory, and its innovation activity has not been particularly outstanding. Before that, I was more worried that Hong Kong might gradually fall behind in the digital virtual asset industry.

However, this declaration actually clarifies the attitude of the Hong Kong government. Although the specific measures need to be further observed, it is enough to ignite me and my colleagues' expectations for Hong Kong's future.

In this declaration, I am most concerned about the digital Hong Kong dollar and the Hong Kong government’s understanding of Web3 itself. At present, I have not seen a specific plan for the digital Hong Kong dollar. Considering that the Hong Kong dollar itself is freely convertible and it is pegged to the US dollar, I feel that the digital Hong Kong dollar has a lot of room for imagination.

However, the final development may depend on the courage of the Hong Kong government. From experience, I am a little pessimistic about the strength of innovation in old money, but the Hong Kong government The progress of this promotion is optimistic.

In addition, what makes me most happy about the promulgation of the Declaration this time is the Hong Kong government’s positioning of Web3 itself, because it clearly puts Web3 Consider it as an opportunity and trend, and affirm the status of virtual assets in the future financial infrastructure.

I think this is a particularly far-sighted plan and view. Since the Web3 sector has always been closely related to the financial sector, the early stage of the Web3 field There are indeed some chaos, but the Hong Kong government's statement this time has actually clearly expressed its attitude of approval, and at the same time it has also proposed very clear regulatory principles.

The attitude of the Hong Kong government will help establish order faster in the initial stage of industry development. Such an order will avoid the situation where bad money drives out good money, and it will certainly To a certain extent, the stigmatized virtual asset industry can regain market trust.

In this declaration, apart from the ceremonial and symbolic move that the Hong Kong government is about to issue NFT, the other two points are very specific, The first point is the Tokenization of government green bonds for subscription by institutional investors; the other point is the creation of digital Hong Kong dollars just mentioned as the "backbone" and pillar connecting legal tender and virtual assets.

This has rarely been mentioned before in major national and regional governments.

The first point is that the tokenization of securities will lower the threshold for ordinary people to access virtual assets, and according to the Hong Kong Securities Regulatory Commission (SFC) Elizabeth Wong, director of licensing and head of the fintech division, confirmed that regulators are considering allowing retail investors to invest directly in crypto assets.

In the second point, Hong Kong itself is a transit point for trade between the mainland and the world, and the Hong Kong dollar is the currency anchored to the US dollar, and Hong Kong is the largest offshore RMB Center, with such unique advantages, it can quickly establish early currency credit.

May I ask Mr. Kong, what are your thoughts on the Hong Kong government's attempts in these two aspects, and how will this affect the financial system of China and the world?

【Jack Hole】

About these We have also talked with the officials of the Hong Kong government and the industry, and they are actually divided into two completely different factions:

One group believes that blockchain or Web3 should combine the original industry to serve the real economy, and its issuance of green bonds is actually a form of serving the real economy. But more advanced Web3 representatives believe that the digital Hong Kong dollar and securities tokenization should be a complete Web3 economy, and the ceiling is even higher.

But I don't think the two are completely in conflict, but in the process of communication, the two factions do have some Collision of opinions. At present, the view of the Hong Kong government may be more inclined to protect investors while combining the real economy.

You also mentioned the question of whether retail investors can open an account, but there are still many problems in the opening of retail accounts by regulatory agencies. Obstacles, when it will be resolved is still unknown. As for the digital Hong Kong dollar, judging from the circulation and liquidity of the Hong Kong dollar, it is very likely to compete with the stable currency system backed by the U.S. dollar in the future. This is also very opportunityful but also tortuous.

【Shi Xingguo】

I feel At present, these imaginations are still in the state of "I have heard the sound of the stairs, but I have not seen anyone coming down". We really have to wait for a lot of details to be announced further before we can know what kind of development the future holds. As you said just now, maybe this is not a matter of one or two policies, and the whole industry needs to be prepared for it.

This is actually a problem that the entire Web3 industry needs to face.

Everyone already has a vision for Web3, but in fact, not only do everyone understand it differently, but all industries are not necessarily ready.

Mr. Kong has recently inspected various active Web3 entrepreneurial regions in the world. May I ask Mr. Kong, during your investigation, which regions have left you with the development of Web3? I am deeply impressed, can you give two or three examples? What are the characteristics of these areas? For example, what track is suitable for entrepreneurs to settle in? Please Mr. Kong share with everyone in front of the screen.

【Jack Hole】

I flew for 3 months this time and went to ten countries and regions, and also communicated with local practitioners.

Let’s start with Singapore, the first stop of Chinese Web3 entrepreneurship.

This is the situation before Hong Kong issued the "Declaration", because Singapore has a trading platform ecology that the United States does not have.

Singapore now can be said to be full of trading platform bosses, but in the United States, the ecology of trading platforms is relatively cautious. It can be said that Singapore has become a gathering place for information. You can meet everyone, all types of projects, and learn all information in just one week.

Singapore will undoubtedly be the center of Chinese Web3 entrepreneurship in the next stage. It is the place with the lowest information gap, where you can quickly learn about Web3 The general information and the latest information on Chinese entrepreneurship, we provide unparalleled efficiency.

But this has also led to the problem of high costs in Singapore. As another financial center in the world, Singapore is not only a gathering place for Web3, but also other high-tech Agglomeration of industries, semiconductors, chips, medical technology, etc. For ordinary entrepreneurial teams, the cost of Singapore's land area comparable to the center of Guangzhou will be many times higher than that of local entrepreneurs.

In this way, many teams whose nominal headquarters are in Singapore but whose actual teams are in Malaysia, Thailand, and Indonesia have also been born.

At present, Singapore is more suitable as an information dissemination center or PR center.

Next is South Korea. At present, the total number of encryption users in South Korea is about 5 million to 10 million, thanks to the higher income of young people and Samsung and other countries The monopoly of high-level enterprises, local young people are keen to speculate in the bull market, which has brought a large number of high-quality users to the encryption world. The conditions of local users are better than those in Hong Kong and Singapore, which has also attracted the attention of many Asian projects. The consortium capital is also interested in Local Web3 development helps.

There is another place in Asia that needs to be mentioned, and that is Vietnam. Young people in Vietnam are equally active, but the quality is not as high as that in South Korea. However, behind Vietnam is the growth rate brought about by industrial transfer. With the boost of foreign investment and consumption, Vietnam’s encryption world also has a lot of opportunities.

In general, for Chinese entrepreneurs, Hong Kong is still the only place that can compare the efficiency with mainland China and the legal system with Europe and the United States, so Future entrepreneurs are likely to start in Hong Kong, go to Singapore for exchanges and development, and then go to the United States to try to scale.

As for where the team is, it depends on your own situation.

Next, let’s talk about the United States. There are four regions in the United States that are suitable for entrepreneurship in the encrypted world. One is New York, which is mainly based on NFT and financial investment, and the other is local Miami, where the government is keen to introduce cryptocurrencies, Silicon Valley, where technology projects and capital gather, and Texas, a power-generating state where miners gather.

Finally, let’s talk about Panama, which is taking advantage of global regulatory dividends, and FTX is also located here. Its currency is pegged to the U.S. dollar, and it is more like Singapore in terms of status. It is not only a tax haven for the rich in the United States, but also attracts entrepreneurs from all over the world with its developed policies and geopolitical regulatory arbitrage space.

This is almost the international pattern under my investigation on this trip.

【Shi Xingguo】

You didn’t mention Japan in your explanation just now. The Japanese Prime Minister made Web3 development a national policy in the middle of the year. What do you think of Japan?

【Jack Kong】

Limited to time, this investigation has not yet had time to go to Japan and London And Dubai, so it's hard to draw conclusions. But I think that compared with South Korea or other countries, Japan's regulatory capabilities will be stronger, and it will be relatively conservative.

Japan is a country with a relatively high quality of citizens and a spirit of ingenuity. In my personal opinion, the development of Web3 in Japan will still be relatively cautious and slow.

【Shi Xingguo】

Understand. Just now you mentioned FTX, so I have to talk about the "reign of terror" that the encryption industry is going through recently. The story of FTX has twists and turns. After Binance gave up the acquisition, FTX is gradually coming to an end. Bitcoin fell below $16,000 to hit the lowest price in two years. According to several foreign media reports, SBF told investors that after the liquidity crisis, FTX’s short position was as high as 8 billion U.S. dollars. If liquidity is not replenished, the platform is on the verge of bankruptcy. Some analysts said: "The situation of FTX this time made investors in the currency circle immediately think of the Celsius and Three Arrows capital incidents that happened a few months ago, so they worried about the recurrence of the liquidity crisis." Regarding the "Lehman Brothers moment" in 2008 The cryptocurrency industry that was born has re-took the "Lehman Road" twice this year, causing catastrophic losses and lessons for the industry.

Mr. Kong, what warnings do you think the crisis of FTX brings to the encryption industry? What changes will this event have on the industry landscape? How do you see the future of the crypto industry?

【Jack Hole】

I think either encryption The industry is still blockchain and Web3, and there will be more room for growth in the future.

So generally this kind of accident usually has two effects.

The short-term impact is definitely negative, and the first to bear the brunt is the sharp drop in currency prices, and users who hold currency will suffer losses;

The second is to attract more cautious attention from the regulator;

The third is that new funds outside the market are more reluctant to flow in .

But in the long run, it is also very beneficial to the development of the industry.

One is to make all practitioners more in awe of finance and leverage, and more in awe of users' assets.

In the long run, this is a very good thing, which will also prompt many exchanges, including Binance, to publish their asset certificates , the industry will develop in a healthier direction in the future.

The more pragmatic the financial infrastructure, the more solid the foundation of the entire industry, the stronger the explosiveness of the industry. This is one aspect.

Second aspect, this incident also indirectly promoted the development of DeFi. In the past two days, the transaction volume of DeFi has increased significantly. It’s just that DeFi is currently limited by issues such as cross-chain bridge security and hacker attacks. If these issues can be resolved, its future development will be very fast.

In general, the crisis in turn must have promoted the progress of transparency in the industry. Having said that, the biggest enlightenment this incident gave us is to be vigilant against leverage. For ordinary people, holding mainstream currencies and waiting for them to rise is the best solution, which is equivalent to using spare money in investment and financial management for fixed investment in funds, but for most people In other words, due to the lack of professionalism in the industry, the more operations, the higher the error rate and the greater the risk of debt.

Second Section: New Public Chain

【Shi Xingguo】

Thank you Mr. Kong for your experience, let’s talk about your company again . Nano Labs, a distributed chip developer founded by Mr. Kong, was listed on NASDAQ in July this year. You proposed that Nano Labs should be the infrastructure of the metaverse, and explained the three-layer structure of the metaverse, including The underlying intelligent network, access layer smart devices, and operation layer blockchain. This simple open architecture requires new hardware and software infrastructure to provide the possibility of economic innovation for future digital natives and new users.

The metaverse industry is still in its infancy, and the metaverse belongs to the field of high technical investment and time-consuming. May I ask Mr. Kong, based on the current development process of the Metaverse, which part of the infrastructure development do we need to overcome the most? What layout moves and future plans does Nano Labs have for this part?

【Jack Kong】

The current fundamental problem of the Metaverse is that the operating cost is too high, Even if there are cross-age applications launched, we can't run at all. The second part is computing power. The existing computing power is not enough to support the explosion of the entire Metaverse in the future. These are the two main contradictions, and of course there are more problems that may be at a finer level.

For many hardware and VR companies, according to the short board theory, if VR is to be done well, it may need more than hardware The many shortcomings of the industry can be filled. As long as one board is missing, the development of the entire industry will be slow.

This is why we see similar VR tracks at this stage, although a lot of money has been invested but there is no splash. Large companies have invested in one or several of them, but the remaining few plates are not long enough, and it will take some time for the entire track to rise.

Our layout in the metaverse is also based on these two points. In the short term, we will focus on solving the problem of high concurrency in the metaverse, and in the long term we will solve it The problem of insufficient computing power in the future, how to develop better chips to serve the metaverse.

Mr. Shi, which part of the infrastructure in the Metaverse do you think needs to be conquered the most? What suggestions do you have for technical breakthroughs in this part? How long do you think it will take for a mature Metaverse product to hopefully land?

【Shi Xingguo】

In fact, I very much agree with the two point. I think the metaverse itself is equivalent to our imagination of a full-dimensional digital society. At present, we have only realized digitization at the information level, and it is still limited to the extremely small-scale asset digitization of digital assets on the blockchain.

Why is it said to be very small?

Some people say that they may think that one trillion or two trillion is already very good, but in fact, compared with Internet companies, it is not enough. The total market value of the top 20 Internet companies listed on NASDAQ has reached 20 trillion. It is not difficult to see that the current digital asset transaction volume and performance on the blockchain are still unsatisfactory.

So we are still far from the metaverse we expect, where people, relationships, rights and interests, and economic activities are all mapped to the digital space.

In my opinion, the processing power of the blockchain as an infrastructure can be compared to the speed of the dial-up Internet era. At that time, only some simple text browsing could be done on the Internet, and even picture browsing was very difficult.

The metaverse we are imagining today is actually equivalent to watching Douyin and chasing dramas on the Internet. There is a gap in performance and traffic between the two, and the current blockchain is far from being able to do this.

From the perspective of hardware, in the early days of the Internet, hardware could not carry multimedia content. A floppy disk in the past could not even hold a photo of a mobile phone today. From this point of view, chips and hardware should also provide more support for the high-performance business or high-throughput business of the Metaverse.

Assuming that if there is no smart phone chip, it is actually impossible for the Internet industry to enter the era of mobile Internet.

From this point of view, the underlying infrastructure of the current metaverse is still far behind, and the threshold for metaverse applications is still too high, and the experience is too poor.

So whether it is blockchain technology or supporting chips and other hardware, we need to work harder.

In September of this year, Ethereum completed the merge merger, and the industry was encouraged, but in fact we feel that this is not enough, because although Ethereum is known as the world computer, in fact, the business processing speed of this world computer is at least It can handle 15 requests per second.

Even so, it still does not prevent Ethereum from becoming the most successful blockchain ecosystem in the world, supporting a market value of about one trillion.

But after the merger, if they want to achieve higher performance, they will have to go through at least five more major updates on their own plans. According to optimistic estimates, tens of thousands of transactions per second can be achieved at that time. From this point of view, if Ethereum is only used as a financial infrastructure, it may be enough. After all, the peak value of VISA transactions per second is almost tens of thousands.

But if we put the application perspective into application scenarios such as Metaverse and Web3, then this processing capacity is still far from enough.

Ethereum’s next upgrade plan is sharding, which is equivalent to starting to move towards a parallel architecture. This direction is correct, and this direction is the only way to achieve this higher business volume.

But technically speaking, in order for Ethereum to achieve parallelism, there are actually several extremely high technical barriers that need to be overcome. My team and I have worked on parallel technology many years earlier than before, so we are very clear about these barriers.

Ethereum is still in the comfort zone of the digital currency market, how much motivation can he have to overcome these barriers? It’s hard to say. Judging from the delays in each new version of Ethereum, I think the Metaverse probably cannot count on Ethereum, the industry leader.

From this point of view, I still think that the metaverse will not be mature for a long time, and we think it will be about three to five years. The reason for this estimate is that parallel technology has begun to mature, and the parallel structure is actually equivalent to the evolution of the Internet from the dial-up era to the era of broadband Internet access.

This evolution is equivalent to providing a highly scalable and high-performance solution for the public chain, and such a solution can carry the business volume of Metaverse and Web3.

Of course, now we are still working hard to further lower the threshold for the use of digital assets. In these aspects, we may need to communicate with Mr. Kong to find solutions from the perspective of hardware and chips. I believe that through the appropriate combination of software and hardware, the timing of the maturity of the Metaverse can be brought forward as much as possible.

In my opinion, the scalability and business of the public chain can basically be said to be the key elements for the next development of the metaverse and Web3 industries.

In terms of the public chain, I also heard such a saying: the business logic of the public chain is that it provides a business environment for various commercial projects, and at the same time collects taxes for all users, then the public chain will be like a country, and Public chain tokens are more like legal currency for tax payment. Then for a public chain, the total value of currency and the total value of goods should be completely corresponding.

But if the public chain wants to maintain a low and competitive cost, it must either have a high enough processing capacity, or the system will issue coins to subsidize miners.

In the early stage of the new public chain, due to the rapid growth of the total value of goods on the chain, the negative impact of additional currency will be almost offset. However, when the new public chain encountered an obvious development bottleneck, the total amount of currency and the value of goods began to be out of balance. If the new public chain continues to issue more to retain miners, it will dilute the currency value. If it reduces additional issuance, it will increase costs. It is not conducive to the development of blockchain.

I wonder if you agree with this view? Do you think the new public chain has a more suitable economic model and business logic?

【Jack hole】

I also pay attention to the new public chain, but everyone’s style of play is surprisingly unified-declaring that their TPS is much higher than Ethereum.

In fact, Ethereum is an ecology, it is not a TPS, it is not just a technology, so it is very difficult to rely on a certain technology to compete with the ecology.

At this time, the financial ecology of Ethereum pays attention to security. For the new public chain, it has nothing to do with the fee rate, but the stability of the system, so I personally think that at this stage of the financial blockchain, Ethereum may continue to maintain its leading position.

As for other new public chains, no matter what economic model it is or how high its TPS is, it cannot surpass Ethereum in a short period of time, because it is determined by the security attributes of financial needs , and Ethereum has formed a strong ecological decision, not technology.

And I think the opportunity of the new public chain does not lie in the economic model, anyone can do the economic model, whether it is the economic model of halving 21 million coins or maintaining a certain inflation every year models, and even introduce staking and other playing methods, but there is great imitability between each model, so the core of the new public chain lies in what future users need.

Now everyone is staring at TPS, but users don’t care much about TPS. Users care more about the experience on the new public chain.

From this perspective, the competitive advantage of the new public chain should not be that it is better than Ethereum in certain aspects, but what can this chain really bring to users? For example, the metaverse may be born in a new public chain, which is the core of competitiveness. At least in terms of business logic, the new public chain should not talk about technology, but what kind of services can be achieved through technology and what kind of needs can be satisfied. need.

Does President Shi have any suggestions for solving this problem?

【Shi Xingguo】

From the perspective of business logic and economic model, the biggest feature of the public chain itself is that it has economic incentives.

When the assets on the chain are not rich, using this method can attract enough active users. But as far as the so-called obstacles and contradictions such as additional issuance and economic models are encountered on the public chain, in my opinion, this is because the current economic models on all blockchains are difficult to do refined things.

In real finance, many financial institutions can divide these assets very finely according to the real assets, in terms of liquidity differences and differences in use costs, and then Then use a complex set of financial instruments to keep them running smoothly.

But on the blockchain, everyone mainly uses tokens to make corresponding economic models, but the asset and liquidity of the token itself cannot be distinguished at all. For the asset part, we generally hope that the return is as high as possible, but for the liquidity part, we hope that its value fluctuations are as small as possible, but from the perspective of economic laws, these two expectations are completely contradictory.

But what carries these two contradictory expectations is the same set of rules shared on the same chain in the same market. At the same time, with more and more smart contracts on the blockchain, the operating costs of various businesses have also produced great contradictions.

All businesses share the same set of cost rules on the chain, which means that the handling fee for a large amount of token transfer may only be a few dollars for me. It is not worth mentioning; but if it is a vote for a DAO organization, these few dollars are a huge cost of participation in governance.

Similarly, there are also some fragmented NFTs and game props that are not of high value. The extra few dollars in the transfer cost is almost equal to the possibility of directly eliminating these businesses.

These problems are all due to the limitations brought by the current blockchain architecture which is still a serial architecture, which means that the entire system has one and only one set of rules, which cannot be changed.

This is why Ethereum has aroused great concern in the industry when it was doing merge upgrades. Under the general set of rules, if there is a small problem in any link, it is very likely Facing the ending of upgrade failure and merger failure.

A system can only have one set of rules, which is possible in the early stages of blockchain development and can also meet certain business needs. But later everyone discovered this problem and began to try to change it in various ways. The more common way is to use side chains to meet different costs and business needs.

In this way, both in terms of speed and cost, the diversity is increased, including the focus of Layer 2 discussed some time ago. But this also caused a serious ecological split. The interoperability of assets on each chain encountered great obstacles, and also caused many security incidents caused by cross-chain bridges, with losses amounting to billions of dollars.

In addition to the lack of configurability of the chain itself and insufficient business diversity, assets under the serial architecture cannot directly communicate with each other, and smart contracts cannot directly interact across chains. These technical drawbacks have resulted in the current situation of a relatively single business model of the public chain and extensive business logic design.

If it is a parallel architecture, the chain can easily do a lot of logical sharding in the business, but the underlying data and credits are still integrated, so that it can meet different business forms , and can also be configured on demand, and cross-chain contracts can be deployed, so that businesses with different cost requirements can run on different shards.

In this way, the configurability of cost, frequency, and business can be resolved, and the contradictions just mentioned can also be bridged.

Therefore, only when the infrastructure can support these more complex business logics can the paradox of the economic model of the public chain be resolved, which is the basic technology that can provide such complex support capabilities.

Recently, the industry has also begun to move towards a parallel structure, which shows that the industry has gradually realized the structural problems, and the same is true for Aptos, which has attracted the most attention in the new public chain.

However, the launch of Aptos has disappointed everyone. At the same time, the crypto bear market continues to ferment. Entrepreneurs and former giants of Web3 began to explore new tracks in the Web3 field other than conventional new public chains and DeFi. Kong is always an entrepreneur in the underlying infrastructure of Web3. The Nano Labs you founded is not only a distributed chip provider that provides computing power for the Web3 world, but also focuses on incubation and investment in the fields of blockchain, artificial intelligence, and Web3. Mr. Kong, in addition to the old tracks such as public chain and DeFi, which new subdivided tracks of Web3 are you more optimistic about? What are the exciting layouts of your project on these new tracks?

【Jack Hole】

From the perspective of our chip business, the current financial public chain does not have too much demand for business computing, and users The barriers to entry are also relatively high, so currently we are focusing on the Metaverse and the new infrastructure, computing requirements, applications, and traffic portals that may emerge during the birth of the Metaverse.

It’s like the sectors we invest in include metaverse applications and metaverse traffic portals. In the past, the traffic of the exchange was very large, and it was the entrance of the traditional financial blockchain era. And we believe that NFT platforms will become the traffic entrance of the metaverse in the future.

We emphasize solving existing problems in the layout of infrastructure. For example, as long as there are 100 3D people in the metaverse application, we will get stuck. We will think about how to make 100,000 3D people will not be stuck online at the same time. Then the cost is reduced by a hundred times, and the global transmission efficiency is increased by more than a hundred times, so that the whole world can truly share the same frequency in real time.

If the scale effect is not produced in this way, the efficiency of the metaverse infrastructure will not be reflected. Just like our current dialogue, this actually does not require a blockchain, nor does it need to be based on the blockchain. The underlying metaverse. Only when all users around the world can participate in this process, can the value of the blockchain be truly brought into play.

In terms of development costs, hundreds of people were originally needed to develop a metaverse application, but in the future it may only take a few people to build a metaverse application like a DeFi. The current direction of our efforts.

The third section: NFT

【Shi Xingguo】

This is a vision that we are looking forward to. Indeed, the threshold of the entire industry, whether it is development or user threshold, is very high. High, lowering the threshold must be the key. Based on this, I think it is very meaningful to discuss the new track.

From my point of view, I feel that there are actually quite a lot of pseudo-demand in our industry.

My team and I are working on parallel blockchain technology, so the Web3 field is the business layer for us. We understand what features our technology can provide for Web3, but in fact We don't know much about our client's business.

Fortunately, the blockchain itself is a basic technology, so usually customers will first come to us to discuss their business ideas, and this discussion gives us a very comprehensive Opportunity to learn about industry thinking. So combined with my knowledge in the blockchain field over the years, I am indeed optimistic about some tracks. However, I would like to declare that these tracks are short-term tracks and have the compliance of the Chinese market. These tracks are more suitable for domestic entrepreneurs to pay attention to.

The first is the combination of physical rights and digital collections or NFTs. This direction is recognized by everyone and will soon see results.

This business form is similar to the traditional membership system or points system, but the difference is that digital rights can make it easier to recombine rights, including cross-enterprise portfolios and cross-ecological portfolios. In this way, many equity products will be derived.

Because the business does not require the company to make too many adjustments, the real industry is the easiest to cut in from this direction. For example, some of our customers are already engaged in the business of digital rights tickets for tourist attractions. These digital rights can not only be used in scenic spots, but also can form more types of consumer rights with partners such as hotels and restaurants.

The second area I am more optimistic about is private domain traffic operation.

At present, self-media is very popular, and they are most worried about two things. One is how to maintain the flow of anxiety every day when you open your eyes, and the other is how to realize the flow. There is no particularly ideal solution for these two problems under the current Web2 system, but under the Web3 system, traffic maintenance and traffic monetization are very easy to achieve cross-team collaboration, and the collaboration method is much more flexible and easier than on the Web2 platform protect each other's interests.

The third project I am more optimistic about is brand community building, or brand ecological building.

Because the link between enterprises and users is the brand, over the years, the operation of the brand is basically one-way.

Channels and users have always been passive parties in brand operations, but in the Web3 era, Web3 can provide users with more mutual benefits and more interactive operation methods. It can greatly improve user stickiness and attention.

In the Internet age, attention is the scarcest resource, and Web3 is the best tool for enterprises to maintain attention.

In a short period of time, digital products and NFTs should be the most direct way to express Web3 rights, but right now the most are copyrighted NFTs.

Let's talk about some embarrassments encountered by NFT in actual business.

Apple updated its App Store policy late last month. Apps can allow users to view the NFTs they hold, but prohibit users from using NFTs to unlock additional "features or functions." Apps must not contain buttons, external links, or other features that direct users to purchases outside of the App Store. This means that Apple allows Web3 startups to sell NFT directly and pay directly with Apple Pay. But Apple charges a commission of up to 30% on NFT transactions made through iOS apps.

It can be said that this is an inevitable contest between Web3 rookies and Web2 giants, who has more voice and strength.

It’s just that before Apple’s extensive user base and cultural identity, NFT’s position does not seem to be solid enough, which also explains the necessity of launching Web3 mobile phones, such as Solana.

After all, NFT should not be kidnapped by the giants, which will not only lose its original meaning, but also make the ecology of its creators more chaotic. Moreover, as early as September before, NFT was pushed to the forefront because of 0 royalties.

May I ask Mr. Kong, under the internal and external pressure of royalties, has the business model of NFT reached the point where it must be changed? What is your ideal NFT business model?

【Jack hole】

In my opinion, there are two types of NFT that everyone understands now, one is to combine offline copyright rights, One category includes copyright, etc., and the other is pure online creation. In the long run, NFT is the interaction carrier of the Metaverse.

With the NFT protocol standard, everything in the Metaverse can be traded, not just the copyright itself, but also everyone’s data, which may be the video content of our chat today, Or some aspect of the data is all right.

So as far as I understand it, copyright NFTs are more likely to be icing on the cake. So how can the future NFT serve as an interactive carrier for the Metaverse? I think it will go in two directions.

One direction is the low threshold, because many people can’t understand the speculation of coins, but there are always people who can understand the speculation of NFT. After the threshold for NFT participation is lowered, NFT is likely to become a fragmented finance. Under the influence of time, it will gradually move towards a transaction model similar to AMM. In other words, it is essentially a Token hype.

The other direction is that when NFT carries more meaning of the interactive carrier of metaverse, Taobao, Jingdong, Amazon and various trading platforms of NFT will be born. The other side of the sea and sky. Of course, this requires more data, applications, and entrepreneurs to accumulate a large ecology, a large platform, and trends in the future. This is my understanding.

Of course, I also want to know Mr. Shi's views on the NFT business model.

【Shi Xingguo】

NFT is actually a way to express certain rights and interests in digital form, so it actually maps It can be a work of art, or a voucher or membership certificate, or even a reflection of the physical world's housing development in the metaverse.

So if you want to talk about the NFT business model, it is difficult to describe it in a consistent way, so I will only talk about my ideal NFT business model from the perspective of royalties.

Because NFT is actually very easy to set the scope of copyright use and the way royalties are divided, but there is currently no infrastructure and economic rules that can match it.

Apple is obviously following Apple's own previous fee strategy, treating NFT as a final product or service, ignoring the transferability and recreation of NFT itself, and its The inherent rights and interests and other characteristics have caused many problems.

A copyright NFT, whether it is used as an end use or as an IP asset, its creator, ownership, etc. are actually very clear, which is better than any A traditional representation of copyright is better.

The income and use of NFT copyright are not enough now, for example, its use has not been well tracked, and its income has not been properly distributed . At the same time, the decision-making power of the platform that can handle NFT is a bit too large, even including the possibility of self-stealing.

In fact, this is a typical phenomenon that NFT, a product of the encryption industry, is not acclimatized under the Web2 service provider or service environment.

So these problems will actually be solved in the Web3 era. At that time, the flow and use of each copyright NFT will be clear, and the division standard for secondary creation will also be passed directly. My smart contract to distribute. The rules are at the discretion of creators, distribution channels and users.

The platform actually becomes one of the channels without any privileges. At that time, there will be no more troubles like today.

Back to reality, regarding the NFT business of copyright, its business volume will be several orders of magnitude larger than that of digital currency. The realization of this situation needs to reach the level you just mentioned Internet support of more than 100,000 levels. Including more users, nodes joining, and more asset types joining.

To achieve this, in addition to hardware efforts and popularization, parallel blockchain chains are still a key element.

Recently, Warner Bros. announced that it will launch the HBO series "Game of Thrones" series NFT this winter; Instagram will launch NFT casting and sales functions; Visa also launched a World Cup-themed NFT. Coupled with the previous NBA, Nike and other brands, the NFT trend has begun to spread in the Web2 world.

However, for Web2 companies trying to enter the Web3 world with NFT as an entry point, this move means reaching new audiences, experimenting with new technologies, collaborating to generate ideas, or realizing Completely different goals from the previous business. Many businesses don't know where to start.

NFT brands such as NBA’s Top Shot started with a parent brand, but more projects started small, as memos capturing the trends of the times, Experimental works of art, projects born of inspiration among friends, and later evolved into full-fledged brands, built from the bottom up on a large base community of NFT holders.

This also means that it is difficult for the Web2 world to follow the previous customer acquisition logic to establish a good cooperative relationship with NFT and its community. After the cooperation began, because the NFT community is not homogeneous, they have huge differences in mission, product and organizational structure.

What does Mr. Kong think of the way these traditional Web2 enterprises enter the Web3 world? Do you have any advice for businesses looking to enter the Web3 world with ambition?

【Jack Hole】

I think there is only one way for Web2 to enter Web3, and that is to pay tuition. Any entrant who has not paid the tuition fee will not be able to learn. There is no profitable business in this world.

Because the difference between these two lines is still relatively large, I think that for those with traditional resources, the entry of Web2 into the Web3 industry is actually a icing on the cake, and it may also be the result of stock competition. A magic weapon to win. Because after combining many traditional industries with new technologies, it will indeed have the opportunity to widen the gap with traditional competitors.

But for younger people, young entrepreneurs who do not have ready-made resources at hand may have to do a completely native Web3, that is, they do not need to rely on any traditional world brands Endorsement of Web3.

For example, the big blue chip Boring Ape didn't have any traditional endorsements before, right? So this is a direction with a very high ceiling.

The entrepreneurial directions of these two types of people can be completely different , but the results will also be completely different. Also like a Web2 company, Adidas simply issued NFT and Nike acquired RTFKT, becoming the first global brand to acquire an NFT studio. The results of the two are completely different.

Although Adidas is also popular, it has not formed a lasting effect. NFT only plays a role in brand communication on Adidas, and it does not regard NFT as a main business.

Nike acquired the NFT studio and allowed a more original team to make NFT, and the chances of sustainability and explosiveness in returns will be greater. Of course, there is no one who is right or wrong, but I think it is definitely better to do it than not to do it. It is definitely better to pay tuition early than late, and you have to continue to pay. This is my understanding, how does Shi Zong understand it?

【Shi Xingguo】

Hearing such a statement, I think many companies are going to be overwhelmed. It seems that this tuition fee must be paid that's it. But we still hope that Web2 companies can find better cooperation teams and better consultants, and pay as little tuition as possible.

In essence, it is true that Web3 is not a simple continuation of Web2, so many companies often have no clue when entering Web3, or even just want to make the current business a simple If you want to modify it, you just want to implement Web3, which basically doesn't work.

Because Web3 itself means a complete change in the relationship between you and your users, which means that you must think about how your business is built from the ground up.

It is difficult for us to explain it clearly in a short time, but I think it is the best choice for each enterprise to find experienced and accumulated partners to enter Web3.

For example, Mr. Kong, who has been deeply involved in the industry for ten years, also includes those like us who have been focusing on the research and development of parallel blockchain technology. We have seen many successful projects in the development process. And failure cases, these cases will become the experience that Web2 enterprises can enjoy.