In the rapidly evolving world of blockchain and decentralized applications, Agoric stands out as a beacon for developers looking to transition from Web2 to Web3. But what exactly is Agoric, and why is it making waves in the developer community? In this exclusive interview with Diego Lizarazo, Director of Developer Relations at Agoric, we delve deep into the heart of Agoric, its newly launched components library, and the vast opportunities that await Web2 developers in the Web3 realm.
What is Agoric?
Agoric is a layer 1 Proof-of-Stake (PoS) public blockchain and smart contract platform that delivers a safer, more familiar platform for accelerated development and deployment of decentralized applications. Agoric empowers over 14 million JavaScript developers to pioneer Web3.
Agoric component’s library recently launched. What is it and what is the library’s primary purpose?
We have created the components library to meet the Web3 developer community’s ongoing need for rich, reusable, open-source components to help speed up application development. The purpose of this library is to create a one-stop shop that holds everything a developer needs to begin assembling code across the interchain, including an introduction to Web3 programming, in-depth guides and tutorials. Developers with previous JavaScript knowledge will find learning Agoric’sHardened JavaScript framework straightforward. Within the library, developers can access useful resources such as a lending protocol, an LP stop loss contract, smart contracts for interacting cross-chain, NFT drop and auction mechanisms, and an on-chain governance committee.
Why is there such a discrepancy between the Web2 developer community and the Web3 developer community?
There is a stark difference. According to the Electric Capital’s Developer Report, there were 21,000 monthly active crypto developers in 2022, compared to the outstanding 14 million monthly active JavaScript developers working in Web2. Another major issue facing the industry is interoperability, or the capacity of various blockchain networks to communicate. Currently, the interchain consists of approximately 60 zones actively connected by the Inter-Blockchain Communication protocol (IBC), and all have their users, applications, and economies. However, for Cosmos to become the internet of blockchains, applications built on the interchain must cooperate. Building an application that takes action across multiple blockchains requires highly programmable smart contracts that handle asynchronous execution. Agoric has designed the components library to equip developers with plug-and-play resources that will allow them to start building and encourage more developers to enter the Web3 space.
Why should Web2 developers consider joining Web3? What opportunities exist here?
The realm of Web3 is exciting for traditional Web2 developers to explore without the constraints and saturation of the sheer numbers of developers already operating in Web2. An emerging space with lots of potential for career growth, developers can work across a number of new innovative spaces including decentralized finance, interoperability and cross-chain interaction, and smart contracts.
Agoric is well-positioned to provide Web2 developers with an ideal starting point for their Web3 journey as the library provides developers with plug-and-play resources to begin building and participating in new opportunities right away. However, onboarding Web2 developers requires speaking to them in a language that they can understand – initiating dialogue is crucial in achieving this. The components library aims to invest time and resources in this Web2 developer audience so that they can join the Web3 community and begin transferring their skills and building. This ongoing support is crucial in the onboarding process as developers are navigating a new and complex space.
Where can developers learn more about this?
Agoric is committed to supporting developers interested in learning more about Web3. We have set up regular developer office hours (Wednesdays at 9 am PT / 16h UTC) and offer hands-on technical support through our Discord channel. In addition to this, Agoric is working with Chainboard Academy to run boot camps, which incorporate a mentoring focus and peer-to-peer learning to offer developers the ability to build, test, and deploy their dApps on the Agoric chain. If you are interested in learning more, you can join the community of developers building apps for the interchain on our components library homepage.
In this insightful interview, we had the opportunity to engage with Johan Hörmark, the Digital Bonds Platform Project Manager at SEB. Johan provided a comprehensive overview of SEB’s new digital bond platform, which leverages blockchain technology to revolutionize the banking sector.
The platform, known as so|bond, is utilized for primary issuances, safe-keeping, and managing events such as dividends/coupons and redemption. The blockchain serves as the ultimate record of bond ownership and employs smart contracts to manage events and corporate actions. This innovative approach introduces a new level of transparency, allowing investors to track and reconcile their positions in real time.
Can you provide an overview of SEB’s new digital bond platform and how it utilizes blockchain technology in the banking sector?
The digital bond platform is used for both primary issuances as well as safe-keeping and managing the events dividends/coupons and redemption. The blockchain is used as the ultimate record of who owns the bonds and utilises smart contracts to manage the events/corporate actions taking place. It also introduces transparency in the sense that, as an investor, you can track and reconcile your position in real time.
What are the key benefits of using blockchain technology in the issuance and management of digital bonds?
Blockchain technology gives us the possibility to introduce instant settlement, atomic swaps, transparency and immutability. This can facilitate a reduction in risk and cost within our industry.
How does the so|bond platform streamline the process between issuers, investors, and banks, and what improvements does it bring to efficiency, security, and cost-effectiveness the interest-bearing feature of CBDC affect the effectiveness of monetary policy?
Compared to current processes, the so|bond platform streamlines many of the processes involved in the issuance of bonds. We see the platform as evolving over time to bring efficiencies into the market. Introducing a CBDC that can be used in securities settlement and other payment flows (e.g. coupons, redemptions) will add even more efficiencies. However, this depends on the central banks’ decision to issue CBDC that is usable in the so-called wholesale scenarios such as in securities settlement.
The platform is built on a low energy cost protocol called Proof of Climate awaReness. Could you explain how this protocol encourages sustainability and minimizes the environmental footprint?
The core idea is that participants joining the network as sealers (the nodes that propose transactions to the network) have to disclose their environmental footprint of their IT infrastructure according to a set calculator that takes into account many factors, including the energy mix of data centres and the recycling of hardware at the end of its life. The lower the environmental footprint, the more of the native token Climate awaReness Coin (CRC) the node runner is rewarded with.
In the beginning, we see the Proof of Climate awaReness protocol (PoCR) as being more of an inspirational effort that encourages sustainability and plots a direction towards more energy efficient blockchains. Perhaps most importantly, there is built-in accountability. The node operators have to disclose their environmental footprint, and you don’t want to be worst in class for obvious reasons. However, should the network grow and CRCs one day hold attributable value in monetary terms, it would serve as an additional incentive to lower the environmental footprint.
What are some of the challenges, benefits, and opportunities associated with the platform, including legal and regulatory concerns?
The project of building the platform has, to a large extent, been a legal challenge, primarily in finding a jurisdiction where it is possible to issue Digital Bonds. Alongside many Digital Bonds recently, Luxembourg was ultimately chosen since the regulatory regime allows for a so-called Central Account Keeper role permitted to use DLT to run the network of securities accounts where the bond can be safe kept.
Furthermore, to get all the bond documentation in place, which was new to everyone, required a lot of effort and learning. The development of the tech platform was sometimes overshadowed by the legal work required, even though much effort has been put into the technology and designing the processes.
How do you see the future of blockchain technology and its impact on the financial sector, particularly in terms of digital or tokenized assets?
Blockchain can have a profound impact on the financial sector, but this doesn’t have to mean that current participants (incumbents) are replaced by smart (DeFi) contracts. The trust and safety in the existing financial infrastructure are likely to be replicated in these new networks but in novel ways. There is also the fact that assets tend to be held and managed on the most cost-efficient infrastructure in the long run, and if blockchain becomes superior to what we have today, assets should start to move there.
Can you discuss the potential expansion of digital asset classes on the so|bond platform and how it might shape the financial landscape?
There are no projects that can be disclosed publicly at this stage.
What role does the introduction of a reward token system play in the platform, and how does it incentivize participation and sustainability efforts?
Initially, the reward will play a minor role in the platform. It should be seen as an attempt to set out a direction of development for other networks going forward, reflecting the project’s inspirational efforts. In this context, we would also emphasize the transparency achieved when node operators disclose their environmental footprint of the IT infrastructure used to run the network . That being said, should the network become successful and grow, with more assets located there, are located there, there is a possibility that the rewards tokens, known as Climate awaRaness Coins, could be attributed a value and further incentivise participants to optimise their environmental footprint.
Could you elaborate on the platform’s approach to transparency, faster processing, and operational simplifications, and how it aligns with the future direction of the financial services industry?
The platform is a public permissioned type of blockchain. This means that anyone that knows this address can in real-time reconcile their position against the blockchain. Going forward, this enables participants to reduce lead-times and simplify operational steps.
Can you share any insights or lessons learned from the launch of the digital bond platform and its implications for the broader adoption of blockchain technology in capital markets?
There needs to be further clarification, harmonisation of rules and regulations for the broader adoption of blockchain technology. Currently, we manage the bond under Luxembourg law and the compatibility with other jurisdictions has to be analysed country by country, which is very time-consuming. The importance of common standards should not be underestimated. For a network to become successful and grow in terms of participants and assets, and to consequently attain the necessary liquidity, it needs to reach critical mass. This can only happen if we collaborate and create common and open standards. Therefore, we have decided to make the platform open source, allowing anyone to connect and contribute to further improvements.
Johan Hörmark’s interview sheds light on the transformative potential of blockchain technology in the financial sector, particularly in the issuance and management of digital bonds. The so|bond platform exemplifies how blockchain can streamline processes, enhance efficiency, security, and cost-effectiveness, and even encourage sustainability through its unique Proof of Climate awaReness protocol.
Blockchain technology has been a game-changer, fueling the rise of decentralized applications and introducing novel concepts like Web3, NFTs, and the Metaverse. Leading this significant transition is BNB Chain, a platform dedicated to creating cross-chain/multi-chain infrastructure and interoperability. They aim to lay the groundwork for the next 1 billion Web3 users, making it effortless for Web3 Gaming, NFTs, and Metaverse dApps to scale.
In our exclusive interview today with Walter Lee, Web3 Gaming Growth Lead in BNB Chain Innovation, we delve deeper into the strategies BNB Chain is employing to reach this ambitious target, their plans to bridge the gap between decentralized technologies and traditional users, their approach to keeping transaction fees affordable, and a sneak peek into some upcoming updates and features. We also touch upon BNB Chain’s competitiveness in the rapidly evolving blockchain space and their unyielding support for the development of decentralized applications (dApps). Keep reading to discover their innovative strategies, upcoming developments, and insights on the future of Web3.
BNB Chain aims to reach 1 billion users. What strategies are in place to achieve this ambitious goal?
BNB Chain provides cross-chain/multi-chain infrastructure and interoperability to lay the foundation for the next 1 billion Web3 users making it super easy for Web3 Gaming, NFTs and Metaverse dApps to scale.
To accommodate a large number of users, BNB Chain will improve performance and scalability. In addition to its storage network BNB Greenfield, it has optimized its infrastructure by implementing layer 2 solutions including opBNB into BNB Chain’s modular stack. Its EVM-compatibility means that it will be a value-add to the network and handle increased transaction volume and user demand
Performance improvements including its Layer 2 solutions such as opBNBis able to hit around 4K TPS. Also, it has an estimated 90% reduction in gas fees at $0.005. This creates a responsive and low latency environment for users.The gaming industry is huge and growing at a rapid pace, there are an estimated 3 billion gamers out there and there has been a lot of growth for web3 gaming on BNB Chain in recent times. Hence, we believe that Gaming will be one of the key verticals for BNB Chain to achieve 1 billion users!
How does BNB Chain plan to bridge the gap between decentralized technologies and users who still rely on consistent, centralized relationships and identities?
Web3 technology is not exactly a revolution for existing industries, it is in fact a market expansion. BNB Chain understands that existing users cannot be disrupted instantly. There has been observable maturity in the development growth in the web3 space to bridge this gap, starting from the user journey. For most dApps, there has been a move away from “forcing” users to connect to a blockchain wallet. Instead, dApps could leverage social logins to generate wallets attached to the social identity and assets would be automatically dropped into the linked wallet. Users would then be empowered to make their own decisions in terms of managing the owned assets.
For developers, BNB Chain’s goal is to provide the best and most extensive infrastructure for true web3 developments. For example, BNBGreenfield, which is a decentralized storage platform designed to revolutionize the data economy by utilizing the power of decentralized technology for data ownership and management. Built within the BNB Chain ecosystem, this platform introduces a decentralized approach to data management that seamlessly integrates with BNB Smart Chain (BSC).
Features include:
Native integration of data permissions and management logic onto BSC as exchangeable assets and programmable smart contract programs.
Providing of developer-friendly API and performance equivalent to popular Web2 cloud storage solutions;
Comprehensive incentivization of all participants of the network to ensure high-quality service and a sustainable ecosystem
Compared to other decentralized storage services like IPFS, Filecoin, Arweave, and Web3.storage, Greenfield offers several advantages. It is designed to be highly scalable, cloud-native, and compatible with both Web2 and Web3 standards. It provides strong performance and reliability regardless of the amount of data being stored. The integration with BSC and the EVM environment allows for fully programmable capabilities and a wide range of use cases.
Overall, the web3 industry is still very young so there will be continued innovations that will aid users and developers in adding benefits and features to various industries such as in Finance and Gaming.
Can you tell us about BNB Chain’s transaction fees, and what measures are in place to keep them affordable for users?
BNB Chain’s transaction fees have been one of the lowest in the industry, starting off at around 5 gwei. In recent times, BNB Chain’s validators have opted towards reducing that further in order to encourage competitiveness, which will result in positive ecosystem growth. As of April 2023, BNB Chain’s gasfeeshavefurtherreducedto3gwei, and that is around a few cents per transaction.
On top of that, BNB Chain has recently launched the testnet for opBNB, which will further reduce the gas fees by around 90% to $0.005! This should be very exciting for both developers and users, opBNB is expected to launch into the mainnet in Q3 this year.
Can you discuss any upcoming updates or features that users can look forward to on BNB Chain?
opBNB – The opBNB Testnet is live and we are calling on testnet Validators and dApp Builders to trytheTestnetand provide feedback.
opBNB represents our commitment to ensuring a seamless and efficient experience for users, developers, and projects on BSC. This development is part of our ongoing mission to bring the power of blockchain to everyone while embracing and driving forward innovation.
opBNB is BSC’s answer to the scalability challenge that has limited the mass adoption of blockchain technology. As an Ethereum Virtual Machine (EVM) compatible layer 2 chain, opBNB solution is based on Optimism OP Stack to further enhance BSC scalability while preserving affordability and security.
Optimistic Rollups was proposed to reduce the computational load on the main chain by executing transactions off-chain and only posting transaction data on-chain as calldata. This approach drastically improves scalability by bundling multiple transactions together before submitting them to the main chain.
The mix of BSC’s strong ability and opBNB’s dedicated new features, which includes making data access easier, improving the cache system, and adjusting the submission process algorithm to allow simultaneous operations (also known as batcher), allows OpBNB to push the gas limit up to a whopping 100M. This is a big jump from Optimism’s 30M (source: link). Thanks to these new features, OpBNB can handle over 4000 transfer transactions each second and keep the average cost of a transaction below 0.005 USD. By harnessing the power of Optimistic Rollups, opBNB moves computation and state storage off-chain, alleviating congestion and driving down transaction costs.
BNB Greenfield – The BNB Greenfield testnet is live and the community is calling on testnet Validators, Storage providers (SPs), and dApp Builders to jointhedecentralizedstoragetech stackto shape the future of data ownership in Web3.
BNB Greenfield is an innovative blockchain and storage platform that seeks to unleash the power of decentralized technology on data ownership and the data economy. It is a decentralized, open-source storage chain with BNB as its token.
With a focus on facilitating decentralized data management and access, Greenfield aims to revolutionize the data economy by easing the storing and management of data and linking data ownership with the DeFi context of BNB Smart Chain (BSC).
Greenfield, a decentralized storage chain using BNB tokens is now Live, marking asignificant milestone as it implements core features outlined in the whitepaper. Developers can explore various features like account creation, data storage, access control, cross-chain communication, storage provision, node validation, and staking.
Greenfield aims to offer the fastest data service among decentralized storage solutions with cost-effective features, comparable to Web 2 cloud storage. This sets the stage for widespread adoption.
A native relayer links BSC and Greenfield, enabling BSC Dapps to integrate with Greenfield using a simple SDK and minimal development. Upon Greenfield mainnet launch, thousands of Dapp data sets will be available, fostering rapid ecosystem growth and easing data-related innovation compared to other chains.
Users will have control over their data, meaning they can decide who can access it and set the access fees. This broadens ownership from assets to data.
The BNB token’s use will extend to large-scale data storage and trading, which will enhance its value over time
What sets Greenfield apart from existing centralized and decentralized storage systems are its three key components:
Data Ownership: Users own the data and can grant permissions either manually or programmatically.
EVM Compatibility by Integration with BSC : It allows Ethereum-compatible addresses to create and manage both data.It natively links data permissions and management logic onto BSC as exchangeable assets and smart contract programs with all other assets.
High Performance Rich API/SDK: It provides developers with similar API primitives and performance as popular existing Web2 cloud storage. The performance is comparable to commercial cloud as well.
Hackvolution – BNB Chain are inviting all developers, researchers and scientists to participateintheonlineHackvolutioneventthat seeks to redefine and empower the next-generation of dApps with the potential of opBNB and BNB Greenfield.
Whether you are interested in Infrastructure, DeFi, Gaming, or AI, this hackathon provides the platform to explore, innovate, and make a lasting impact. This is your chance to demonstrate your creativity, technical skills, and entrepreneurial spirit as you work alongside a vibrant community of like-minded individuals.
The hackathon is supported by industry leaders such as COMBO, CyberConnect, Hooked Protocol, AlibabaCloud, GoogleCloudand Ultiverse. Generous rewards, including cash prizes, marketing packages, participation in the BNB Chain’s Gas Grant program, and discounted access to essential tools and services, are up for grabs.
It’s an exciting chance for dvelopers to gain recognition, network with industry experts, and propel their project to new heights.
How does BNB Chain plan to stay competitive as the blockchain space continues to evolve and new players enter the market?
BNB Chain is one of the most up to date and extensive infrastructure technology. A good example would be the launches of zkBNB and opBNB, as well as the fully decentralized storage layer, Greenfield. With an extensive infrastructure, developers and users get to build and experience Web3 in the best ways possible, building the strongest advantage of BNB Chain our large and fast growing community.
BNB Chain has more than 3 million in our social communities, and over 1500 dApps. This vibrant range of products and community size are the key contributions for over 1 million daily active on-chain users in this current market.
As “BNB” actually means “Build N Build”, we believe by continuously building with developers and community through support provision and engagements respectively, BNB Chain will continue to be a dominant ecosystem in the web3 industry.
How does BNB Chain support the development of decentralized applications (dApps)?
BNB Chain recognizes the importance of the community and hence, we have been constantly engaging developers and users. We understand that developers are our pillars for growth, and there are many challenges in developing Web3 products, so BNB Chain has been providing various supports including but not limited to:
Marketing collaborations and support – BNB Chain plays an active role in bringing useful information and knowledge of its Web3 dApps to the community
Grants – For projects that are in need of funding, BNB Chain offers theBuilders’ & Gas Grants. The Builders’ grant aims to encourage projects to bring value and growth to the ecosystem, while the gas grant helps projects to run growth campaigns by offering grants based on gas fees incurred by the on-chain transactions
DeveloperPrograms– the industry is ever-changing and the BNB chain is agile in its program creation and implementation to help developers in the space. One of the most popular programs would be the Kickstartprogram, where providers of various essential web3 services such as on-chain wallet development and security audits are able to list and get connected to new developers. This helps start-ups in web3 navigate and develop their projects effectively
There’s no doubt that BNB Chain is making significant strides in propelling the mass adoption of blockchain technology, particularly in the realms of Web3, NFTs, and Metaverse. The platform’s cutting-edge features such as opBNB, BNB Greenfield, and upcoming initiatives like Hackvolution, promise to revolutionize not just the world of blockchain but the larger digital ecosystem as well.
BNB Chain’s commitment to remaining agile in the ever-changing tech industry, their comprehensive support to developers, and their dedication to building a robust, active, and vibrant community all testify to their potential for continued growth and success. As the blockchain space continues to evolve, we look forward to seeing more innovative developments from BNB Chain and its dedicated team.
Zimbabwe’s Central Bank launched gold coins in July as part of efforts to help curb surging inflation amid a slump in the country’s currency. The move sparked interest in whether gold could serve as a safe haven investment during a market crisis.
Based on Zimbabwe’s development, Blockchain.News recently had a conversation with Collin Plume, the President and CEO of Noble Gold Investments, regarding whether gold could be a safe haven investment that investors should rely on during turmoil times.
The global pandemic raging for over two years has created unemployment, supply chain problems, and more that disrupted economic growth. With the rise of inflation, the US dollar has lost its value and purchasing power. But on the other hand, gold has increased its purchasing power because its value tends to rise with the price of goods.
In light of pandemic worries, rising debts, market downturns, business failures, and mounting inflation realities in regard to economic policies coming out of central banks and other regulators, investors have appeared to rush to invest in gold to secure their financial positions.
Meanwhile, several crypto companies are facing bankruptcy, while many tech firms (such as Klarna, ClickUp, Lacework, Bolt, PayPal, among others) recently announced massive layoffs of employees. But questions remain about how investors can protect themselves from the risks of the ongoing financial crisis.
In the current times of financial instability and turmoil, investors seek opportunities to protect their assets and values.
Inflation Hedge
Asked whether gold is a good investment, Plume said YES. While this can be demonstrated by Zimbabwe’s recent gold adoption, generally, gold is viewed as the ideal hedge against inflation. This is because fiat currency loses its purchasing power when things become more expensive, but gold tends to be priced in those currency units.
Plume explained: “Although the gold market can’t do anything about economic inflation on a macro level, it’s easily the best hedge against inflation for an individual’s investment portfolio”.
Nowadasy, gold’s uses and the demand for physical gold have increased. According to Plume, “Gold’s industrial uses are steadily growing (gold is used in electronics, cars, biotechnology, and even on Mars) while its global supply is quickly shrinking, so its value is guaranteed to go up over time.”
Geopolitical and Economic Instability
Gold also provides investors with a safe haven during economic and political instability. The precious metal has often taken the role of an inflation hedge and a portfolio stabilizer during turbulent financial markets.
The gold market rose above the $2,000 an ounce level in March for the first time since August 2020, in response to Russia’s invasion of Ukraine in late February. Geopolitical uncertainty has increased the attractiveness of the precious metal for investors seeking a safe haven for their funds.
Prices have since retreated, declining by around 6% year-to-date, and have struggled to regain ground above the $1,800 an ounce level where it started the year.
This year, gold is getting investors’ attention following Russia’s invasion of Ukraine. Sanctions against Russia have already taken the commodities market for a wild ride, fueling concerns of stagflation — a combination of high inflation and slow economic growth — both of which is positive for gold.
In July, Zimbabwe’s central bank started selling gold coins to the public to help protect people’s savings against the country’s runaway inflation and offer an alternative to the widely used US dollar.
Zimbabwe still remembers the country’s economic collapse under the late Robert Mugabe, who ruled for nearly four decades.
Hyperinflation forced the nation to abandon the Zimbabwe dollar in 2009, and it opted instead to use foreign currencies, mainly the US dollar. During the worst of the crisis, the government stopped publishing official inflation figures, but current statistics put the inflation rate at 89.7%.
Gold Tokenization
Despite physical assets like gold, silver, among others, having weathered countless financial storms throughout history, Gold might still need alternative trading platforms to help democratize access to gold using modern technology through tokenization.
Investment in physical gold has many advantages, but it has a few drawbacks. The main challenges that investors face in the investment of physical gold are issues associated with accessibility, storage, security and ability to resell on a regulated market.
While Gold is considered a safe bet, buying it is often a challenge for retail investors. For example, an average person will need to pay the costs associated with gold acquisition, trust an intermediary, and have a storage solution.
In recent years, the excitement surrounding cryptocurrency has been attracting precious metal buyers away from their traditional investments as they dipped their toes into the crypto pool. But with the recent digital asset market crash, that seems to be changing. Many investors are returning to gold to tame the prevailing financial winds in the crypto markets.
Yet, cryptocurrency like Bitcoin is in a tough year because of the recent market crash. Major Cryptocurrencies, including Bitcoin, and Ethereum, have plummeted, triggered by inflation and Fed’s interest rate hikes.
For the long term, blockchain technology is increasingly being used to address all these constraints in today’s internet era. Blockchain enables the tokenization of gold and other commodities. The technology allows users to invest in digital gold, therefore helping to resolve various issues tied to physical gold ownership.
Gold as Key Portfolio of Investment
Gold’s performance moves independently and has low correlation with other assets such as stocks, real estate, commodities, bonds. The precious metal may therefore help serve as a return diversifier within a broader multi-asset portfolio.
Therefore, based on the above analysis, gold is a good investment that investors can use to hedge and diversify their portfolios. However, according to Plume: “Some people believe gold is just for older investors, or they don’t understand the use for it. Many bullish investors focus on the hottest, newest assets, and while gold may not offer the same spikes in value as Tesla or crypto, it also doesn’t bring the same risk of loss as they do.”
Investors are advised to hold around 5-10% of their portfolio’s value in a form of gold, whether physical bars and coins, or digital coins, or instruments such as gold ETFs (exchange-traded funds), to diversify their holdings and potentially hedge against crashes in the value of cryptocurrency, stocks, and bonds.
Gold aligns perfectly with the investment mantra of “not putting all your eggs in one basket” — providing a safety net against events that may plummet the value of popular investments like cryptocurrency and stocks.
“Like any good financial advisor, we highly recommend using gold to diversify your portfolio. Gold is a low-risk, easy-to-access wealth-building tool that can balance out the volatility of other investments like tech stocks or cryptocurrency. It yields the best return when held over a longer period of time, but many younger investors just don’t know about it yet!”, said Plume.
Working out has become a trending conversation on social network platforms. Exercise, especially indoor-style, is influencing lifestyle amid a wide range of COVID-19 lockdowns globally.
Blockchain.News spoke to Keith Rumjahn, CEO of OliveX and Founder of DOSE token, to explore the potential development of a move-to-earn business model and how cryptocurrency shapes the virtual fitness and sports industry.
Riding a bicycle is more than just a fun physical activity nowadays as the connection between fitness facilities and personal mobile devices is about to introduce users to a new chapter in the virtual world.
Move-to-earn: Dustland Rider
OliveX, a Hong Kong-based fitness startup company founded by CEO Keith Rumjahn in 2017, demonstrated their latest upcoming product, Dustland Rider, in a recent press event in Hong Kong. It provided an alternative way to encourage the public to get into the crypto space by simply riding a bicycle.
By completing specific missions by linking users’ mobile devices, a so-called move-to-earn (M2E) approach and it’s application mechanism so that users can enjoy their fitness achievements in exchange for earning token rewards.
Specifically, the company designed a series of scenarios with immersive stories and missions for users to experience while exercising. Users would need to tackle some challenges in this virtual game to win points or tokens; for example, users might be rewarded a unique golden yellow sports suit if they complete riding 100km in the game.
Tokens would be able to purchase additional equipment or upgrades to characters in the game or be traded on the secondary market.
The company said their Dustland Rider would go live soon, expecting to roll out by the end of September or October of this year.
OliveX is a gamified fitness ecosystem to enhance the workout experience through game design techniques and play-to-earn mechanisms, according to its whitepaper.
Prior to launching the Dustland Rider, the company rolled out another similar move-to-earn audio fitness application to the market in 2021, called Dustland Runner, a survival theme-based fitness game.
The official whitepaper reads that Dustalnd Runner is the first proof of workout audio game, allowing players to earn some native token or even gain Non-fungible tokens (NFTs) or other monetary incentives through physical running in daily life. In addition, its NFT, named Kettlemine, can be minted on the Polygon chain, followed by earning more DOSE tokens by burning Kettlemine NFT.
CEO of OliveX and Founder of DOSE Token Keith Rumjahn Rumjahn
In an exclusive interview with Blockchain.News, Keith Rumjahn Rumjahn, CEO of OliveX shared his journey of running a startup business.
“One of the reasons I founded this company is that I realised some data apps could sell out our exercise data to other commercial companies. As a user, however, we lost our ownership of data ourselves, not aware of (our data) being sold, and even we do not get any benefits or cashback from it,” said Keith Rumjahn.
OliveX’s Keith disclosed that some well-known data-driven service platforms would purchase or utilise these users’ movement data to enhance the purpose of their sale, such as deploying more rental vehicles to a specific area where more people exercise.
On the other hand, the higher traffic acquisition costs for tech giant platforms such as Google or Apple dominating the market is another reason why Keith Rumjahn intends to establish a decentralised platform by himself.
When asked how to differentiate and make the brand more unique to maintain its advantages among competitors, Keith Rumjahn said understanding the gaming lifecycle and the rate of retention among users are critical to designing gaming products, as users typically intend to look for more stylish or trending products within a short period, said Keith Rumjahn; bringing innovation and a fresh product idea would be key elements for OliveX to differentiate their products among competitors.
The sense of business and industry knowledge helped Keith Rumjahn to equip a sensitive awareness to meet customers’ needs. The Canadian Chinese basketball coach and software developer said users normally enjoy the diversity of sports, as some of them would participate in multiple sports within a period of time. The company would develop more types of sports, including Boxing or Yoga, to expand the “portfolio of game, so that users might have more options to choose their own favourite sports.”
Nevertheless, the 37-year-old executive said he hopes the public to build up a regular exercise habit in the long term, “I hope the public would be able to build a healthy lifestyle and regular exercise habit, no matter whether playing our game or not in the future,” which is much more important objectives to him personally while leading the company to keep being competitive among competitors.
The company was acquired by Animoca Brands in 2017 and is a spin-off of the parent company. Over 27% of its shares are owned by the leading gamification platform.
Initially, the former fitness app developer was running a business of establishing smart mirrors. This interactive device can track body movement for analysing body figures with fitness centres before entering the crypto world.
Yet, the pandemic of COVID-19 crushed many fitness centre operations, resulting in massive downsizing or even termination of those fitness centres, forcing OliveX to transform itself again.
Meanwhile, the Hong Kong-based company discovered the potential development in the crypto space later on and declared to list on the National Stock Exchange of Australia (NSX: OLX) in Australia in 2020 and launched its Initial Public Offering (IPO).
The Australian-listed company has been raising over $2.6 million between 2017 and 2018 over the last three rounds, according to Fobes.
Furthermore, the company realises the potential business development in the crypto and virtual economy. Senior management decided to expand their footprints in the virtual space.
DOSE Token
Gamification could be an easier way to convince sports lovers to get into virtual sports in the Metaverse who do not become familiar with cryptocurrency. A recent survey by ChianPlay suggests that 75% of investors join the crypto space because of GameFi.
Unlike other traditional or developed fitness applications in the market, OliveX launched its native token or called DOSE for its M2E in 2021, which can be traded on at least three major crypto exchange platforms, including OKex and Gate.io and KuCoin, at a $56 million fully diluted market Cap currently, according to data platform provided by CoinMarketCap.
Keith Rumjahn said their launching of Initial Coin Offering (ICO) is even earlier than their main competitors, including STPEN, Solana-based move-to-earn apps.
DOSE is the major trading medium within its ecosystem, allowing users and investors to unlock items, purchase NFT or join special events and game modes, according to its whitepaper.
In explaining why OliveX listed their own native token-DOSE, rather than adopting other mainstream or benchmark tokens, Keith Rumjahn Rumjahn said DOSE as an Ethereum-based token, “we wish to build our own specific token in terms of fitness,” adding that “adopting those mainstream or benchmark tokens might be hard to maintain its balance of internal economy (of the game)”
“Many games (developers) would generate their own tokens to each different game but might not be connective to each other. DOSE token would connect all the products instead, including Dustland Runner and Dustland Rider,”
Subject to the character of the volatility among tokens in the crypto market, Keith Rumjahn further explained that that would be more difficult to peg with their products if they adopted other tokens. A consistent token would be necessary to maintain the stability of the product price and their “in-game economy.”
Keith Rumjahn believes the external and floating price of its token in the market would not undermine the company’s performance, adding that he would not set any targeting price for DOSE as the milestone for the long-term achievements.
DOSE reached its all-time high at $0.4051 on Nov 3 in 2021. As per the time of writing, DOSE was trading at $0.01133 with a 24-hour trading volume of $481,789, according to CoinMarketCap.
OliveX offers different kinds of trading services, including staking and swapping.
Subject to recent crypto winter influenced by the collapse of LUNA and UST, most of the leading benchmark tokens sank from their all-time-high,
Regarding risk management, Keith Rumjahn said the company has the expertise in managing risk and the tools of treasury governance for financial operations, whether in the stock market or the crypto market. The company is confident in avoiding liquidity risks from the crypto market, backed by Animoca Brand’s liquidity pool, especially to strengthen its liquidity when necessary.
As a result, the fitness-based company could concentrate its resources on game development, “Our capital is mainly used for operating the game, rather than putting them for investment-purposed,” added Keith Rumjahn.
Building a virtual fitness centre in Metaverse
The fitness-based company also shows its ambition by entering into the Metaverse. OliveX enjoys a 12X 12 land plot on the Sandbox, where the company is establishing a virtual entertainment and even virtual Sales space, according to the official whitepaper.
By introducing strategic partners, including Stages Cycling, TRIB3, and TRAX among others, the company is aiming to bring digital fitness experience and NFT collectables to the Metaverse community.
Through partnerships with some local fitness brands, the company believes that would be an effective way to attract sports lovers to join the Metaverse, who are outsiders of this industry.
OliveX intends to overseas market in the long-term, including Japan and South Korea by recruiting local operation teams for community management.
Outlook towards virtual industry development in HK
Developing blockchain-based startups in Hong Kong is challenging in terms of legal and regulatory challenges. Keith Rumjahn suggests local regulators should optimise policies, allowing more open-mind and crypto-friendly regulations in the city.
In terms of investment, that would be great to allow companies to invest in crypto-related industries or startup companies in terms of licensing so that more capital from the top-end might penetrate to the bottom-end side of the business.
Working out has become a trending conversation on social network platforms. Exercise, especially indoor-style, is influencing lifestyle amid a wide range of COVID-19 lockdowns globally.
Blockchain.News spoke to Keith Rumjahn, CEO of OliveX and Founder of DOSE token, to explore the potential development of a move-to-earn business model and how cryptocurrency shapes the virtual fitness and sports industry.
Riding a bicycle is more than just a fun physical activity nowadays as the connection between fitness facilities and personal mobile devices is about to introduce users to a new chapter in the virtual world.
Move-to-earn: Dustland Rider
OliveX, a Hong Kong-based fitness startup company founded by CEO Keith Rumjahn in 2017, demonstrated their latest upcoming product, Dustland Rider, in a recent press event in Hong Kong. It provided an alternative way to encourage the public to get into the crypto space by simply riding a bicycle.
By completing specific missions by linking users’ mobile devices, a so-called move-to-earn (M2E) approach and it’s application mechanism so that users can enjoy their fitness achievements in exchange for earning token rewards.
Specifically, the company designed a series of scenarios with immersive stories and missions for users to experience while exercising. Users would need to tackle some challenges in this virtual game to win points or tokens; for example, users might be rewarded a unique golden yellow sports suit if they complete riding 100km in the game.
Tokens would be able to purchase additional equipment or upgrades to characters in the game or be traded on the secondary market.
The company said their Dustland Rider would go live soon, expecting to roll out by the end of September or October of this year.
OliveX is a gamified fitness ecosystem to enhance the workout experience through game design techniques and play-to-earn mechanisms, according to its whitepaper.
Prior to launching the Dustland Rider, the company rolled out another similar move-to-earn audio fitness application to the market in 2021, called Dustland Runner.
The official whitepaper reads that Dustalnd Runner is the first proof of workout audio game, allowing players to earn some native token or even gain Non-fungible tokens (NFTs) or other monetary incentives through physical exercise in daily life. In addition, its NFT, named Kettlemine, can be minted on the Polygon chain, followed by earning more DOSE tokens by burning Kettlemine NFT.
CEO of OliveX and Founder of DOSE Token Keith Rumjahn Rumjahn
In an exclusive interview with Blockchain.News, Keith Rumjahn Rumjahn, CEO of OliveX shared his journey of running a startup business.
“One of the reasons I founded this company is that I realised some data apps could sell out our exercise data to other commercial companies. As a user, however, we lost our ownership of data ourselves, not aware of (our data) being sold, and even we do not get any benefits or cashback from it,” said Keith Rumjahn.
OliveX’s Keith disclosed that some well-known data-driven service platforms would purchase or utilise these users’ movement data to enhance the purpose of their sale, such as deploying more rental vehicles to a specific area where more people exercise.
On the other hand, the higher traffic acquisition costs for tech giant platforms such as Google or Apple dominating the market is another reason why Keith Rumjahn intends to establish a decentralised platform by himself.
When asked how to differentiate and make the brand more unique to maintain its advantages among competitors, Keith Rumjahn said understanding the gaming lifecycle and the rate of retention among users are critical to designing gaming products, as users typically intend to look for more stylish or trending products within a short period, said Keith Rumjahn; bringing innovation and a fresh product idea would be key elements for OliveX to differentiate their products among competitors.
The sense of business and industry knowledge helped Keith Rumjahn to equip a sensitive awareness to meet customers’ needs. The Canadian Chinese basketball coach and software developer said users normally enjoy the diversity of sports, as some of them would participate in multiple sports within a period of time. The company would develop more types of sports, including Boxing or Yoga, to expand the “portfolio of game, so that users might have more options to choose their own favourite sports.”
Nevertheless, the 37-year-old executive said he hopes the public to build up a regular exercise habit in the long term, “I hope the public would be able to build a healthy lifestyle and regular exercise habit, no matter whether playing our game or not in the future,” which is much more important objectives to him personally while leading the company to keep being competitive among competitors.
The company was acquired by Animoca Brands in 2017 and is a spin-off of the parent company. Over 27% of its shares are owned by the leading gamification platform.
Initially, the former fitness app developer was running a business of establishing smart mirrors. This interactive device can track body movement for analysing body figures with fitness centres before entering the crypto world.
Yet, the pandemic of COVID-19 crushed many fitness centre operations, resulting in massive downsizing or even termination of those fitness centres, forcing OliveX to transform itself again.
Meanwhile, the Hong Kong-based company discovered the potential development in the crypto space later on and declared to list on the National Stock Exchange of Australia (NSX: OLX) in Australia in 2020 and launched its Initial Public Offering (IPO).
The Australian-listed company has been raising over $2.6 million between 2017 and 2018 over the last three rounds, according to Fobes.
Furthermore, the company realises the potential business development in the crypto and virtual economy. Senior management decided to expand their footprints in the virtual space.
DOSE Token
Gamification could be an easier way to convince sports lovers getting into virtual sports in the Metaverse who do not familiar with cryptocurrency. A recent survey by ChianPlay suggests that 75% of investors join the crypto space because of GameFi.
Unlike other traditional or developed fitness applications in the market, OliveX launched its native token or called DOSE for its M2E in 2021, which can be traded on at least three major crypto exchange platforms, including OKex and Gate.io and KuCoin, at a $56 million fully diluted market Cap currently, according to data platform provided by CoinMarketCap.
Keith Rumjahn said their launching of Initial Coin Offering (ICO) is even earlier than their main competitors, including STPEN, Solana-based move-to-earn apps.
DOSE is the major trading medium within its ecosystem, allowing users and investors to unlock items, purchase NFT or join special events and game modes, according to its whitepaper.
In explaining why OliveX listed their own native token-DOSE, rather than adopting other mainstream or benchmark tokens, Keith Rumjahn Rumjahn said DOSE as an Ethereum-based token, “we wish to build our own specific token in terms of fitness,” adding that “adopting those mainstream or benchmark tokens might be hard to maintain its balance of internal economy (of the game)”
“Many games (developers) would generate their own tokens to each different game but might not be connective to each other. DOSE token would connect all the products instead, including Dustland Runner and Dustland Rider,”
Subject to the character of the volatility among tokens in the crypto market, Keith Rumjahn further explained that that would be more difficult to peg with their products if they adopted other tokens. A consistent token would be necessary to maintain the stability of the product price and their “in-game economy.”
Keith Rumjahn believes the external and floating price of its token in the market would not undermine the company’s performance, adding that he would not set any targeting price for DOSE as the milestone for the long-term achievements.
DOSE reached its all-time high at $0.4051 on Nov 3 in 2021. As per the time of writing, DOSE was trading at $0.01133 with a 24-hour trading volume of $481,789, according to CoinMarketCap.
OliveX offers different kinds of trading services, including staking and swapping.
Subject to recent crypto winter influenced by the collapse of LUNA and UST, most of the leading benchmark tokens sank from their all-time-high,
Regarding risk management, Keith Rumjahn said the company has the expertise in managing risk and the tools of treasury governance for financial operations, whether in the stock market or the crypto market. The company is confident in avoiding liquidity risks from the crypto market, backed by Animoca Brand’s liquidity pool, especially to strengthen its liquidity when necessary.
As a result, the fitness-based company could concentrate its resources on game development, “Our capital is mainly used for operating the game, rather than putting them for investment-purposed,” added Keith Rumjahn.
Building a virtual fitness centre in Metaverse
The fitness-based company also shows its ambition by entering into the Metaverse. OliveX enjoys a 12X 12 land plot on the Sandbox, where the company is establishing a virtual entertainment and even virtual Sales space, according to the official whitepaper.
By introducing strategic partners, including Stages Cycling, TRIB3, and TRAX among others, the company is aiming to bring digital fitness experience and NFT collectables to the Metaverse community.
Through partnerships with some local fitness brands, the company believes that would be an effective way to attract sports lovers to join the Metaverse, who are outsiders of this industry.
OliveX intends to overseas market in the long-term, including Japan and South Korea by recruiting local operation teams for community management.
Outlook towards virtual industry development in HK
Developing blockchain-based startups in Hong Kong is challenging in terms of legal and regulatory challenges. Keith Rumjahn suggests local regulators should optimise policies, allowing more open-mind and crypto-friendly regulations in the city.
In terms of investment, that would be great to allow companies to invest in crypto-related industries or startup companies in terms of licensing so that more capital from the top-end might penetrate to the bottom-end side of the business.
Hong Kong-based start-up PANGU, a metaverse agency appointed by Sandbox, is helping clients to enter into the metaverse by providing asset creation and branding consultation services. The company said it is building various business models, including the play-to-earn (P2E) model for clients to support its growth.
Kenny Ng, the founder of PANGU by Kenal (left) believes the Metaverse would be the tendency of the future; and Zero Chung (right) thinks that providing customied solutions to clients is key advantages of the company.
Interior designer in the Metaverse
Stepping into the office located at Kowloon Bay, Eastern Kowloon in Hong Kong, a mini botanical garden has been set up at the base’s main entrance. Agave americana, more commonly known as Century Plant, and other various potted plants are growing under the care of the owner. The vibe of the working environment and its inspirations also come from the green belief.
PANGU, the visual design production company established as its affiliate of the Kenal Group, has hired over 20 staff and still rapidly expanding. Kenny Ng, Founder of PANGU by Kenal, established his team around eight months ago. Ng shared his experience with Blockchain.News, “just like other start-up companies, we are gradually expanding our scale, starting from building up our products with designers, then developing business and marketing teams at the following stage.”
Furthermore, the company plans to establish community management in the long term, PANGU’s Ng shared his ongoing business plans to Blockchain.News.
This company has connected with the Sandbox since last November in 2021 and was just appointed as the official TSB Metaverse agency in April, which is rare for HK-based startups in the global market. According to PANGU, the agency raised its capital independently followed by grants from Sandbox’s “game maker fund”, which aims at connecting with the next generation and the tendency of web 3.
These services support its business growth by providing a one-stop solution, including land purchase with development, offering marketing strategy, digital assets creation and branding collaboration for clients from online to offline.
Kenny Ng, Founder of PANGU said:
“As an agency of (the Sandbox), we wish we are able to provide complete solid service with own our resources, instead of outsourcing works to other parties, which is not practical. So, that would be our direction in practice.”
“Our partnership (between Sandbox and clients) is more like property developers, and we play our role as the builder and property management unit as a contractor, offering consultations for clients on how to develop their own lands and promote their branding through online and offline activities,” Chung added.
Projects such as Metagreenor clients from Standard Character are part of their key clients, these corporate firms have entered into the Metaverse through the Sandbox. In the project of Metagreen, PANGU said they are mainly responsible for purchasing land and its development, non-fungible token (NFT) creation, but also partnerships from online to offline, including partnerships with NFT gallery, NGOs and running other community channel management, such as Discord.
The founder told Blockchain.News that “in this early stage of the Metaverse, most clients are still discovering and exploring what they can do after investing in these virtual lands. Some clients prefer to shape a revolutionized image and identity in the virtual space, while some clients prefer to promote their branding traditionally,” adding that “we are working together with clients to find out a potential and possible (virtual) identity by helping them to build its ecosystem in this space.”
The Chief strategist suggests customized design and creative solutions for various clients would be one of the advantages for the company to remain competitive in the industry, as the company is not just serving local customers but serving globally.
P2E Development
Meanwhile, inspired by environmentally sustainable beliefs, the company also transformed itself into a game developer, trying to bring different scenarios to this virtual space.
Earlier this month, the game developer virtually launchedan NFT drop project, connecting with a gamification-based metaverse space. Featuring ecology conservation and environmental sustainability, the company is introducing a gamification-based platform for players to explore another virtual world– Ecoland.
The Ecoland is a diversified ecosystem, featuring environmental and educational theme interaction for players, according to PANGU. The company said its assets creation is fully designed from scratch by itself. Their voxel characters are unique with high quality.
Operating through the Play-to-Earn (P2E) model, the platform has associated with the Sandbox, players can earn SAND tokens or win some exclusive NFTs after completing several missions in the game in exchange for upgrading their equipment and tradings.
In addition, the gaming platform also wishes to escalate its landscape in the Metaverse, bringing more interactive ways in different scenarios, such as “Play to learn”, to deliver educational messages to players by completing some mini-games in the space. “We are also cooperating with several environmental NGOs, so we will donate serval amount to NGOs we cooperate with when customers buy specific NFTs from them. These objectives would help us fulfil social responsibility obligations,” Chung added.
Regarding crypto adoptions, PANGU said currently it would only use tokens for necessary transactions or trading among campaigns during the execution stage, such as paying gas fees during the minting of NFTs. “The company might use tokens in the future as the incentive for staff, encouraging them to stay tuned in the crypto space,” Ng added.
Previously, the company participated in the event the Artaverse, to increase its exposure to the industry.
PANGU discloses the company is expanding regional and overseas markets during Q3 and Q4 this year.
Promising Potential Value in the Metaverse
According to the latest researchfrom McKinsey & Company, the study suggests the preliminary value of the Metaverse it creates in the space could grow up to $5 trillion by 2030.
E-commerce would be the largest driving force, which takes up to $2.6 trillion, followed by virtual learning ($270 billion), advertising ($206 billion) and gaming ($125 billion) sector.
Meanwhile, the blockchain-related application and scenarios on the Metaverse are still expanding.
Author of “Snow Crash”, Neal Stephenson, who created the term “the Metaverse” nearly 30 years ago, has recently announced a new project named LAMINA1, according to online media outlet Decrypt.
The project was described as a “free metaverse”, a blockchain-based network for building the open Metaverse. “We’re going to have all the facilities of a full layer one (blockchain) to help support and encourage the creators who want to build with us. That is my and Neal’s strategy—align everything around getting the best thing built and getting everybody all the tools they need to build what they want,” Vessenes explained.
Imagination of Virtual Land
The land issue in Hong Kong remains one of the most challenging issues in the city. With limited space and high demand, physical land has become one of the rarest resources for housing, real estate and other property developments.
Since the arrival of Metaverse and virtual lands in recent years, the bond and chemistry between these two topics have the caught attention of investors who wish to join the virtual space instead of trading physical land. More local entities or corporate firms in Hong Kong, as a result, foresee the potential benefit and investment opportunities in the Metaverse. However, these firms still need a builder’s help to construct the Metaverse infrastructure.
Apart from projects coordinated by PANGU, more local firms, such as Telcom operator PCCW and local railway operator MTR, also shared optimistic views by joining the Metaverse space, aiming at raising their awareness and exposure in the virtual space. Meanwhile, Yahoo and Meta, formerly named Facebook, have also announced to launch of a metaverse connection in the city in the hope that to reserve the old style and image of the city.
To old investors in the digital currency ecosystem, exposure to various forms of scams, frauds, and exploitation will not come as something new, as they must have learned over time that the digital currency ecosystem is filled with such negative occurrences.
New investors, particularly those who started with Non-Fungible Tokens (NFTs), may not understand the growing rate of exploitation bedevilling the ecosystem at the moment.
According to data from blockchain security firm, Slowmist, the first four months of 2022 saw as much as $52 million in losses in NFT-related hacks, a figure that surmounts the $7 million recorded throughout the whole of 2021.
While the bulk of data available to firms like Slowmist is those featuring well-publicized NFT projects, it is undoubtedly true that many more NFT holders are experiencing personalized exploitations on a daily basis.
To many following big-name projects like Bored Ape Yacht Club (BAYC), it will be recalled that the prestigious NFT brand has faced at least two different exploitations this year alone, the latest leading to the loss of over 200 ETH from Bored Ape owners. That the exploitation in the NFT world is growing is no longer debatable. CryptoMarketsBeat spoke with several industry veterans on the worrisome trend to know its root causes and possible ways investors can protect themselves.
NFTs Are an Attractive Ecosystem for Exploits to Thrive
Hackers and cybercriminals often follow anywhere there is money. While exploitation generally takes many forms, all of them are successful on the premise that there is a big financial catch. The emergence of NFTs came with the underlying goal of extending the utilities of Ethereum, and by extension, blockchain technology.
In the image above, the CoinMarketCap aggregator, the top collections, and the floor-price column show projects like Bored Ape can only be snapped up by investors with more than 88.5 ETH (approximately $137,638.74 at the time of writing). Snapping up one Bored Ape through an exploit in any form will come off as a big payday for the exploiters.
“Many NFT projects emerged on the wave of hype when piles of money were injected into this industry,” said Dyma Budorin, CEO of Hacken, a cybersecurity and audit firm. Budorin surmised that the bulk of the attacks on blockchain and NFT protocols could be linked to the misguided desire to follow the money in space.
With money being a very good attraction in space, hackers have come to understand that they can easily exploit protocols because many do not pay due diligence to their security infrastructure.
“Most common hack scenarios involve social engineering and the usage of various scripts to steal private keys or other credentials to access the critical infrastructure point,” said Andrey Pelipenko, CTO of Roach Racing Club, “On top of that, hackers seek vulnerabilities in the smart contracts that accumulate funds, so using proprietary smart contract solutions that are not tested adequately, especially those coming from inexperienced developers, is a poor solution” which consistently predispose NFT projects to attacks.
What is Bad for the Goose is also Bad for the Gander
Suppose the big NFT projects are the Geese in this context and the Ganders’ smaller ones. Experts agree on the fact that all these projects are collectively victims of these scams.
“I bet you’ve seen news headlines about NFT hacks containing a name of a big project, such as OpenSea or Bored Ape Yacht Club, just because these projects are the most famous ones and accumulate the greatest volume of assets. Small projects and individual NFT creators and buyers also fall victim to hacks,” Budorin added.
A new perspective was brought into the discourse by Dr. Dmitry Mikhailov, CSO of Farcana Gaming Metaverse, who noted that attacks are necessarily not targeted at individual collectors or NFT projects alone. He said users of big marketplaces like OpenSea are also highly susceptible to various forms of cyber attacks.
While not referring to one particular platform, Dmitry believes “such marketplaces are often developed too fast to provide the proper level of cyber defence. Vulnerabilities are caused by insufficient attention to security issues: lack of two-factor authentication, lack of readiness for phishing, and DDoS attacks.”
As it is now obvious, irrespective of the form that projects take, they can easily be exploited if the appropriate safeguards are not put in place.
Curbing Growing NFT Exploitations
Despite the fact that the broader NFT world is still being unravelled, there are a number of ways that the experts we spoke to believe can be adopted to wade off the activities of cybercriminals across the board.
While the first of the major recommendations in accordance with Dmitry is to educate NFT investors on the major causes or reasons why they fall prey to attacks, Budorin advocates close “cooperation with trusted cybersecurity vendors,” a move that will enable projects “to undergo smart contract audits and consider running a public bug bounty program.”
These recommendations have been vetted by other experts and are generally known to prevent crucial hacks in the short history of the NFT ecosystem. In all, Pelipenko advocates that investors should always do their own due diligence before injecting funds into any project, no matter the hype.
“We always recommend Doing Your Own Research (DYOR) before taking any actions: it’s a must-do in the crypto space. It is important to understand that, unlike the non-fungibles from the GameFi sector, most NFTs are just collectables without any specific utility. NFTs are risky assets, yet, most people still tend to fall for hyped projects without doing any deep research first,” he said.
The Light at the End of the Tunnel
Along with the broader digital currency ecosystem, the NFT space has a lot of bright lights at the end of the tunnel as investors are becoming more vigilant, and developers are doing their due diligence to ensure protocols are as secure as possible before launch.
Aside from the bearish correction in the industry, Venture Capital firms are injecting liquidity into security protocols like CertiK to bootstrap the security outfits tasked with safeguarding the ecosystem of tomorrow.
From current trends, scams may persist, but the growing awareness will largely tame their spread in the near future.
Blockchain.News recently had a conversation with Mr. Vincent Chok, the CEO of Hong Kong-based First Digital Trust, a technology-driven financial institution powering the digital asset industry, to help explore whether the cryptocurrency can be considered a viable addition to pension funds.
Bitcoin as Game Changer against inflation for retirement
The global economic crisis is taking a toll on some of the major pension funds around the globe. They are either struggling to make payments for the monthly stipends, as agreed or having little funds to sustain a robust pay scheme.
Speaking to Mr. Chok in an exclusive interview, Chok told Blockchain.News that the issue of inflation has eroded the harvest of retired workers:
“In many countries, inflation is higher than what a pension will yield, where you’re earning 1-2%. It is better to invest in alternative assets in a diverse way, where you can buy property, Bitcoin, and access more. Pensions are long-term, and inflation hits hard-earned money, eating away at the value of money.”
Many users are tired of the traditional pension plans in many countries due to bureaucracy and many processes associated with accessing such funds. This has led to more agitation for a better alternative. Many employees are now looking to use cryptos like Bitcoin to save up for their retirement.
Pension funds in most countries are significantly underfunded, which has led many to attempt to make up the shortfall between plan assets and obligations through investments. This illustrates the potential adoption of digital assets if more pension funds continue to add exposure.
While this is a move from the status quo, many global pension funds appear not to be in a hurry to explore this option.
Growing Interest in Alternative Finance
Yet, several pension funds are looking for a change in the exploratory stage. Interest in investing in Bitcoin is growing in the industry. Firms are working to make it more accessible, as studies indicate that small allocations into crypto can yield favourable results.
In a comprehensive survey of almost 800 institutional investors across Europe and the US, 36% of respondents said that they are currently invested in digital assets, while 6 out of 10 believe digital assets have a place in their investment portfolio. Bitcoin continues to be the preferred digital asset with more than 25% of respondents holding the cryptocurrency.
A significant number of pension firms are increasingly investing in cryptocurrencies.
Bitcoin investment by Houston Pension Fund proved that cryptocurrency is not just appealing to individual investors. In October last year, the Houston Firefighters’ Relief and Retirement Fund (HFRRF) made a $25 million investment in Bitcoin and Ether, marking major news that a U.S. pension fund had put crypto directly on its balance sheet. Of course, $25 million was only a drop in the bucket compared to the $5.5 billion in total assets held by the fund – more precisely, representing just 0.5% of its portfolio.
The U.S. pension investment trend appears contagious as there is rising institutional demand from banks, hedge funds, private companies and even family offices in Europe and the rest of the world.
According to Chok, there is greater interest in and adoption of digital assets as a new investable asset class. The executive said there’s a lot of interest from companies to set up pension plans for employees, plus a lot of interest from banks to include digital assets and crypto into digital pensions.
Mr. Chok suggested that pension funds are often forgotten about but are an investment plan that everyone must have, usually by law. Governments force people to set up their pension accounts, put their money in, and then forget about it. Yields and returns of these investments aren’t lucrative.
“Bitcoin pension plans are for younger generations of people who can make tiny contributions that empower them to have far more diverse portfolios,” he said.
The Bitcoin retirement pensions not only help to provide education but also offer new opportunities than a mere 1-2% yield offered by government pension plans, Mr. Chok explained.
“We see this having the biggest impact on younger generations, who will start to think about their future, their retirement, through the easy accessibility of wealth generation mechanisms,” Mr. Chok stated.
The Bitcoin pension plan gives more hope that younger generations can set themselves up for the future while enabling them to learn about diversifying portfolios and various wealth channels that are accessible and which young people can participate in, he elaborated.
“Pensions are a boring topic as people aren’t talking about this at dinner. But these new programs – The bitcoin pension plan – enable people to be more willing to learn and provide greater awareness of access to capital, and greater financial inclusion. We’re proud to be able to offer and educate people on new opportunities for wealth generation,” Mr. Chok told Blockchain.News.
Risks Involved
Yet, Mr. Chok acknowledged that such enormous achievements and benefits offered do come with shortcomings. For instance, since Bitcoin is speculative and highly volatile in its current state, some entities and individuals believe its long-term investment case is weak.
In March, the Department of Labor, raised serious concerns about the prudence of a fiduciary’s decision to expose a 401(k) plan’s participants to direct investments in cryptos. The department, which regulates 401(k) plans, cautioned retirement plan managers to be judicious when it comes to cryptocurrencies.
However, The Internal Revenue Code (Code) and the Employee Retirement Income Security Act of 1974 (ERISA) do not explicitly prohibit the use of crypto as a 401(k)-investment option.
Mr. Chok told Blockchain.News that in July last year, BnkToTheFuture.com, the largest online investment community of professional investors investing in blockchain, fintech and Bitcoin companies, launched a retirement for investors seeking to incorporate crypto as part of their retirement portfolio and inheritance planning.
Despites its volatility, Bitcoin is also attracting attention from institutional investors. More large US pension funds are beginning to consider the unregulated asset as a potential asset class. The announcement by Fidelity Investments, the nation’s largest provider of 401(k) retirement plans, about launching Bitcoin as an investment option, raised significant curiosity among market participants.
The global Fidelity Investment is another major large retirement services platform that has started offering a Bitcoin 401(k) product. By this, the company is providing employees with a saving for retirement opportunity to add up to 20% of their pension balance to Bitcoin.
Despite the risks, at least one major employer – MicroStrategy business and software services company – has signed up to offer Fidelity’s new product to its employees.
In June last year, a small 401(k) provider called ForUsAll started allowing consumers to allocate up to 5% of their retirement funds into cryptocurrency.
Of course, the potential for significant wealth accumulation is the primary benefit of investing in cryptocurrency, plus there are other benefits.
Retirement plan sponsors are looking to provide the service based on customers’ demand. Offering cryptocurrency under a 401(k) plan would also relieve employees of the burden and headaches of holding and trading cryptos for themselves.
Empirical data shows that crypto components have the ability to significantly increase the yield of a pension fund portfolio, though such enhancement of yield comes at slightly higher risk levels.
According to Mr. Chok, “It’s not about putting 100% of your retirement fund into digital assets. It simply has a balanced portfolio. If you have 5% in crypto for example, a non-inflationary asset, and it appreciates over 30%, this will still have a huge impact on a portfolio without putting a dent on it if something were to happen to your chosen asset. So, the potential for upside is significant.”
“If you lost everything, it’s 5%. it won’t hurt your portfolio. You still have an account comparable to standardized government pensions.”
The executive said that the increase in risk can be mitigated by adding an actively managed crypto-component to the portfolio rather than a passive investment product.
Crypto Retirement Portfolio Outlook
Bitcoin is certainly an alluring investment opportunity because of the potential to make substantial profits. Nothing explicitly prohibits plan fiduciaries from offering the crypto under a retirement plan.
Employees and retirees can invest in Bitcoin through their IRAs as there is no legal prohibition against doing so. However, such employees and retirees should evaluate the risks and obtain professional advice through their preferred trading platforms while making such investments.
A study shows that 90% of surveyed central banks worldwide are exploring the future issuance of central bank digital currencies (CBDCs). Blockchain.News interviewed industry experts to find out the outlook of Hong Kong’s digital currency and its potential adoption.
The outlook of e-HKD
In a recent discussion paper published by The Hong Kong Monetary Authority (HKMA), the local regulator reached out to the public to consult the development of retail central bank digital currency (rCBDC) or the digital Hong Kong Dollar (e-HKD). The discussion paper lists a wide range of issues and a dozen of key questions covering a wide range of issues:
The potential benefits and challenges of e-HKD
The balance between privacy and illicit activities prevention
Interoperability with the existing payment system
Considerations in terms of legal, design and policy perspectives respectively
The level of participation by the private sectors.
The role of e-HKD
The rCBDCs can be divided into two-tier distribution models: the wholesale interbank system and the retail user wallet system, according to the e-HKD technical whitepaper.
The wholesale CDBC is used for transfers between the central bank and commercial banks or other institutions, while the retail CDBC is used for transfers between commercial banks and the general public for retail transactions, Professor Chew Seen-Meng, Associate Professor of Practice in Finance and Associate Dean (External Engagement) of the Chinese University of Hong Kong (CUHK) explained.
Regarding retail CBDCs, a doubt that could arise among the public could be why does the market still need another digital payment tool among other diverse options in HK?
Chew, the former economist for the Singapore office of the International Monetary Fund (IMF) and Morgan Stanley, acknowledged that “it is true that there is no urgent need for a digital HKD.”
However, “having an e-HKD could make our lives even more convenient by eliminating the need to carry physical notes and coins around and enables virtually all payments to be made by just tapping the mobile phone” in the long term, Chew said.
Moreover, “the transmission mechanism of monetary policies from the HKMA can become more efficient through the e-HKD,” Chew added.
Furthermore, the scholar believes digital currency could provide a faster and more convenient way to transfer value by supporting more economic activities potentially if the digital currency is accepted as a medium of exchange by the public in the long term.
Currently, a plethora of payment platforms has already captured the market.
E-wallets with Peer-to-Peer (P2P) payment functions are becoming mainstream in Hong Kong.
In e-commerce alone, digital wallets are expected to account for 40 % of the city’s online transaction value by 2025, overtaking credit cards, according to the 2022 Global Payments Report by the US financial technology company FIS.
In an exclusive interview with Blockchain.News, Etelka Bogardi- Partner of Asia lead of Global Payments and Fintech Practice, Norton Rose Fulbright Hong Kong, told Blockchain.News that “one of the primary design considerations should be interoperability with existing systems.”
Bogardi, a Hong Kong-based financial services regulatory lawyer and the former Senior Counsel to the Hong Kong Monetary Authority, suggests the regulator should aware of the effect of the e-HKD on banks and any potential disintermediation effects, given Hong Kong’s status as an international financial centre and the large presence of the financial sector.
Meanwhile, Chew also shared a similar view and added that “the administration needs to fully ensure and secure before e-HKD is launched.”
“Unless e-HKD can address some pain points of the current e-Payment services or is much more convenient than the existing e-Payment options, it would be hard for e-HKD to be embraced by the public among the plethora of retail payment options in Hong Kong,” Etelka added.
Through the paper, the HKMA reiterates that “the purpose of developing e-HKD is not to replace existing payment methods” but to “avoid creating a closed-loop payment system, which impedes payments made between e-HKD users and users of other payment systems.”
The rCBDC is expected to provide connectivity among other payment service providers, for instance, cross-platform payments to be conducted efficiently.
Token-based or Account-based?
The balance between privacy protection and data access is another crucial consideration among systematic issues. The discussion paper mentioned that the key design feature of e-HKD to consider is whether it is issued token-based or account-based.
According to the paper, the token-based would allow more anonymity in payments between various parties, protecting against abuse of individual data by commercial entities. Still, it could be risky to facilitate illicit activities.
The account-based approach, on the other hand, would “require the recording of balances and transactions of rCBDC holders. This approach would rely on the ability to verify the identity of the account holder and could help comply with AML/CFT requirements.”
Both approaches require a ledger to complete transactions with distributed ledger technology (DLT) and tokenization, which could be structured to trace users depending on the degree of anonymity and access of information to parties.
However, Prof. Chew said that the traceability of digital currency from the regulator indicates that small retailers such as taxi drivers might be reluctant or not interested in changing their behaviours or habits of transactions due to taxation concerns.
“Since the e-HKD’s value will be controlled by the HKMA, it is already a kind of stablecoin. To the extent that the HKMA is able to maintain the stability of e-HKD’s value through algorithms or its forex reserves, the risk of the e-HKD plummeting in value should be quite small.”
The regulator said the “full anonymity is not plausible,” e-HKD should comply with existing law and ordinances. Its legal mandate and legal tender status would logically align with the currency system.
“Overall, whilst there would need to be some work done to accommodate an e-HKD in the existing legislative framework of currency issuance and related issues, these are not insurmountable obstacles. Some of the more technical legal issues raised relate to the application of effective AML controls and data privacy laws. In that sense, the discussion around having a two-tier issuance and distribution structure is very beneficial,” Etelka explained.
Global adoption of CDBCs
Over the past two years, the global market was trapped by uncertainties amid the COVID-19 pandemic.
Amid the turmoil, the increasing demand for raising cross-border payments efficiency and the emergence of cryptocurrencies, such as stablecoins and other tokens, also gave rise to regulatory challenges, pushing global governments to update their currency policy in response.
According to the latest report published by the Bank of International Settlement (BIS), 90% of surveyed central banks worldwide are exploring the issuance of central bank digital currencies. The financial institution added that around two-thirds of central banks surveyed would take issuing retail CBDC into account in the near future.
The Bahamas became the first sovereign nation to issue CBDC since 2020, called the “Sand Dollar”, as the pioneer in adopting a new form of currency, driven by its geographical and the cost of delivering currency on its land.
“In countries with a weak currency or underdeveloped financial system, and a large unbanked population, the CBDC is more useful and can be more easily adopted by its citizens,” Chew explained.
Yet, the SAND Dollar’s potential benefits did not live up to its expectation.
A report from the IMF indicates that the island nation’s adoption of the SAND Dollar is merely less than 0.1% of the currency in circulation.
The issue of financial inclusion continuously troubles this Caribbean nation. World Bank defines financial inclusion as the access of individuals and businesses to valuable and affordable financial products and services for their financial that need to be delivered responsibly and sustainably. The Bahamas is also desperately to improve its cybersecurity for its digital currency.
Bogardi believes Hong Kong’s market enjoys a unique position with a well-developed retail payment landscape:
“Issues of financial inclusion are perhaps not as relevant as other jurisdictions who have chosen to press ahead with CBDCs (e.g. Bahamian Sand dollar). As a result, it is correct that the focus of the HKMA’s exploration of the e-HKD is as a conduit to fuel digital innovation in Hong Kong, and to help position it for potential challenges from new forms of payment means such as stablecoins.”
Regionally, China has been conducting a wide range of digital Yuan (e-CNY) pilot tests since 2020, developed by the People’s Bank of China (PBoC).
The administration rolled out a massive pilot test during its Beijing Winter Olympic Games and currently, the e-CNY app is one of the most downloaded apps in the country. The app has recorded over 83 million downloads through iOS and Android systems so far.
“In China, electronic payments have been dominated by Alipay and WeChat Pay for several years now. The central government is keen to introduce the e-CNY to maintain control of the monetary system before private firms like Alibaba and Tencent become too influential in the country’s payment system. Since it is a large country, it has to do many pilot tests in numerous cities so that citizens can familiarize themselves with the e-CNY before it is officially launched, and this of course will take some time, “Chew said.
On the other hand, experts suggest geopolitical factors, such as war, might also accelerate the progress of CBDC issuance.
While the objective of introducing the CBDC among other countries or regions could be different, the HKMA has disclosed that “it is inclined towards the Coins-approach under which e-HKD would be solely issued by one single authority” in the long term.
By adding that, looking for tasking agent banks to handle all customer-facing activities relating to the distribution of e-HKD.
“If the technology is ready, the HKMA can consider doing some pilot tests in several stages to let Hong Kongers try out the e-HKD on their mobile phones so that they can familiarize themselves with it and learn about its usefulness,” said Prof. Chew.
The HKMA has reiterated that it has not yet decided on introducing the e-HKD.
