Looking Through The (Crypto) Winter Fog - TOKEN2049 Singapore 2022

hello everyone great to see you today so um I mean obviously we are through the crypto Winters right and there is a lot of uncertainty and I think what's very important is uh that we look through what's the next wave the key scene that is going to drive the next wave of innovation right and especially in terms of institutional adoption uh we are very positive of on the future of what's going to happen and we have identified actually five themes that are really going to drive the adoption going forward all right um one is really around the diversity of the token assets what we think is if you think five years ago there was only Bitcoins and then smart contract came and then nft came the next wave is going to be real life assets real world things that are going to be illiquid and not compatible on the traditional financial sector that's one second we think that people will use it instead of traditional financial institutions especially in emerging markets in some of those markets actually crypto penetration is going to be higher than the trotify penetration so real life usage is starting start eth under merge he's created actually the first you know productive assets at large scale from Asset Management point of view that will mean that more than 10 billion of yield is going to be distributed to us at managers so that will see a lot of flow from incidental funds fourth we really also see the convergence of Trot 5 C5 and defy what it really means is going mainstreams it's really no one cares about small communities anymore everyone is moving to the space last one uh where we see most of the investor money going in is really around sustainable business model what we're seeing is people don't care anymore about how big is the time it's still important but the second question is is it sustainable let's go through some of those Trends one by one what's very interesting is if you look at the diversity of crypto assets right when you look at five years ago it was just Bitcoins and all the Bitcoin forks and the whole series was replacing money right but then the Innovation comes through there was defy that came dubs nft right smart contract and all of those created much more diversification all right going forward what we are going to see is much more real world asset specifically tokenizing eLiquid things illiquid things that are not supported by the traditional Financial system similarly stable coins are also something we are very positive about it's essentially the fundamentals to replace inefficient traditional Financial systems for tokenizing assets right what were really the most bullish about is eLiquid assets why just because non-liquid assets are the one that traditional Financial system cannot solve it's very hard to replace the NASDAQ right but what you can do is to actually tap into the whole lot of assets which could be real estate private debt private equity which are not addressed by the NASDAQ so how do you basically tokenize that is actually one very very important point right and tokenization of those assets will provide clear opportunities very different value proposition right it could be one fractionalized fractionalizing means allowing uh private and smaller individual to purchase the assets such as LP of private debt or private Equity but it will also be uh tokenized to create more liquidity while thinking about Arts was thinking about IP rights or think about digital or physical IP bonds all of those could be tokenized and we believe that this will be the next wave of uh innovation similarly on the second Trend it's all about replacing the financial system and how is it more efficient look everyone has talked about you know who is actually using it on day-to-day basis so on this chart you see on two access one is the penetration of banking and as you know it's especially low in developing country because of the inefficiency the second axis is the crypto penetration what's really interesting is that in some of those countries such as Vietnam Philippine and Nigeria crypto penetration is starting to be at the same level as banking penetration so what we believe is the replacement of chartify and the use of crypto for day-to-day usage we'll start with the emerging market that will be very very important second it's not just about usage it's about how do you create value on day-to-day basis and we've all talked a lot about remittance you know which how inefficient it is but not only remittance it could be about loans especially in in those like high interest area right it could be about wealth management it could be actually around creating a pool of Workforce right and Bridging the supply and demanded Workshop between emerging and develop one it could also be about payments all of those are super inefficient in some of those geography and crypto is going to disrupt all of that third point which is very important is from an asset management point of view is is going to be the Catalyst of creating an asset class adopted by traditional asset managers right and that is because it actually inheritally has a huge supply right so it's actually you know the second largest crypto assets and then that asset we can look at it as a smart contract but the way a lot of asset managers look at it too it's actually becoming a deflection array productive assets and that productive asset used to generate close to 10 billion per year right 10 billion per year it's more profitable than half of the s p company in this world it's actually a huge asset class right and those 10 billion historically was used to pay the crypto miners and you needed to have Hardware you needed to have specific um technical skills in order to capture this fees but now it is accessible to anybody it is accessible to anybody who can stick which means that if you have money and you find a professional staking delegator which happened all the time right you can capture this yield right and it's becoming actually one of the most interesting things that the Assam manager are talking about and there is much more infrastructure capitals the second thing which is important is from a mandate point of view a lot of asset managers don't want to invest in things that are not ESG compliant it's very difficult for them they have risk committee investment committee Etc the fact that it become a Eng comp plan asset is also going to be a very big catalyst so from adoption point of view right from Asset Management point of view we believe that actually um there is a huge room and the first Catalyst of that is going to be the POS is searching the the right we're observing is you know what's the sign of mainstream adoption mainstream adoption is when it's not a niche technology anymore it's when all the institutions and all the users are using it on day-to-day basis without realizing that using it on day-to-day basis it's not about C5 has a C5 Community D5 has a D5 community and you have these old dinosaur on the truck fight guy observing is that the Frontiers are becoming blurry for instance track five business are actually being taken more and more by the crypto Community right as if you can tokenize an asset why can't you tokenize stocks why can't you tokenize Equity why can't you tokenized bonds if you start to do that and you are cheaper more efficient and install and have in instant settlement then you can actually replace some of the systems right so there is a risk of traffic players eating and being eaten by D5 players on their own plate similarly what we're seeing is the Robin Hood and the revolute of the world the fintech players are also trying to have a crypto offering and it used to be very simple it used to just be crypto exposure right but you cannot reach all it's not a real asset you cannot buy nft with it but more and more The Next Step they will build real crypto wallet on that they will be able to exchange coins between your wallet and metamask right and that's going to create another Pool of users lastly who also see track 5 players moving to the space right obviously you know they have more concern about AML and kyc but if you look at the number of investment that someone like uh Goldman Fidelity or Morgan Stanley are making in the space especially on the custodian security space is actually quite impressive right and a lot of those use cases are already deployed on the 2B basis not consumer facing but really trying to disintermediate the inefficient system that was built in the 70s so that's also something that is um that is going to be to be very interesting to watch lastly when we think about the future right and what will stick through the bear Market the winter what's going to be really really important what we believe is is really the quality of the business and the sustainability of those business models people ultimately are very very passionate about the trend But ultimately two questions will come one is it big enough second can it make money third is it scalable and a lot of those Solutions through the winter will not survive because it's unsustainable or is it because it doesn't have the right infrastructure right so what we're really excited about that few things over there right um we can talk a lot about those but specifically if I pick some of those uh D5 with sustainable yield is something that we find it very interesting especially when interest rates are raising and basically you also see a lot of those unsustainable things collapsing what you will see is the one who survive will be sustainable and not only used among the small community of crypto users but also for a large audience the second thing we're really excited about is Triple A games coming to the space right and we see a lot of traction everyone has a secret studio somewhere either investing or building uh nft for AAA games right and this is just inheritant to the game cycle because creating a game is hard it's like creating a movie It Takes years but crypto is just something that is a few years old so how can you expect very Triple A game at the moment catching up with those Metro Studios so the day Triple A game with Mary with again items in Ft that would be something revolutionary right other things that we're really excited about is the application of this technology for real life use right I won't name all of those but that include you know social network that includes IP products art you know music but also everything around personal identity right today your data are not monetized as everybody knows but the day you can own it and start potentially either monetizing or keeping it by yourself is going to be also revolutionary right so in conclusion I think we are going through the times tough times right liquidity is not going good Market is not looking good but if you really look at the fundamentals and the emerging use cases that all industry players are building so it could be crypto players fintech or truck type players you will see that the usage and the potential for this intimidation is just tremendous so let's go through it and we'll come up stronger out of the Winter thank you very much