We can see that the market value of “bat + meituan + JD + pinduoduo” accounts for 60% of the total market value of the Shanghai Shenzhen 300 index, but the net profit is only 26%. So objectively speaking, the biggest technology companies in the United States are still cheaper than Chinese Internet companies. But we also need to see that, including China, the whole economic activity, more and more profits are concentrated on Internet companies. So, we must make investment to find out where the economic power of the future is.
Next, let’s turn back to the data economy. If the data economy is based on blockchain, it is actually composed of three parts or three elements. If only technology does not have “currency”, it will also lead to the failure to achieve the best effect of blockchain technology.
Blockchain account is a more intelligent account, which has the function of deploying intelligent contract, and can bring all transaction record functions. These are mailbox in PC Internet era and community in mobile Internet era.
Token can not only carry information, but also carry value and contract. Token is generally expressed in stable currency and community currency, and DCEP, which is now issued in China, is also a type.
Assets (stolization + data capitalization)
At present, the total amount of encryption assets is about $1.5 trillion, while the real world assets are about 200-300 trillion dollars. In the future, a large number of traditional financial assets will enter the whole data economy, which is a symbol of whether the data economy will erupt or not, and it is also a blue sea of the future development of data economy. At the same time, there will be data assets that are originally out of balance sheet and then entered into the table in the future.
In addition, the blockchain economy includes the data economy, and must be regulated. I think we may see two (chain) worlds in the next 3-5 years, one is regulated through KYC, which may account for 80%; Another is an anonymous, unregulated world, which could account for 20 per cent. In the current crypto asset world, the ratio is opposite. Therefore, we should focus on the regulated KYC world with great growth potential in the future.
I think that countries like Singapore should take three steps to promote the development of Digital Economy: the first step is to promote the tokenization of payment, the second step is to promote the tokenization of assets, and the third step is to promote the capitalization of data.
1) Token of payment
We will fully realize commercial and personal digital payment, promote the circulation of digital French currency, encourage the development of more stable currencies based on public chain, seamless exchange of sovereign digital currency and community digital currency of more countries, and realize global payment circulation.
In the era of Internet of things + blockchain, token French currency or highly credible stable currency is the core foundation of data finance development;
To realize the seamless exchange of sovereign digital currency and community digital currency in more countries and to realize global payment circulation is a financial solution to deal with “one ball, two systems”.
Blockchain landing application: cross border transfer
Through the rapid rise of usdc and usdt with a total stock of only US $60billion, the daily cross-border transfer has reached $13billion, and has begun to pose a substantial challenge to swift. The key is that the remittance cost is very low, the time is very fast, the process is more monitored and safer.
I don’t think Singapore will affect the stability of the SGD if it issues national digital currency. Because the total issue of the new dollar is 537.3 billion dollars. Assuming that 2% of the total newly issued by Singapore government is digital currency, that is, the size of a usdc, many countries have more than 2% M2 issued each year, so it will not have a great impact on the stability of the new dollar. The Singapore government can try to issue national digital currency.
We can see some typical progress in the payment process of digital currency through some cases:
In March 2021, visa, the international credit card payment network, officially announced that it will gradually let users use the usdc in stable currency to conduct transaction settlement directly on the visa payment network.
In march2021, Tesla CEO Elon Musk announced that it could be paid in bitcoin for the purchase of Tesla vehicles in the United States (Tesla recently sold some bitcoin and made $150million).
In February 2021, MasterCard group, the credit card giant, said it plans to start supporting direct payment in cryptocurrency this year.
In october2020, PayPal, the payment giant, announced joining the cryptocurrency market, allowing customers to use the company’s online wallet to buy and sell and hold bitcoin and other cryptocurrency. PayPal users will also be able to use cryptocurrency to shop at 26million businesses on their network, the company said in a statement.
Prior to that, the mobile payment provider square and robinhoodmarkets Inc., a stock trading brokerage, have also announced that users are allowed to buy and sell cryptocurrency.
In terms of the digital currency of the central bank, the Central Bank of China digital currency (DCEP) has entered the test stage. The central bank digital currency Research Institute has carried out cooperation with major cities, banks and Internet giants in China, and the test scenarios are constantly rich.
It is a pity that we haven’t seen the support of the payment institutions on the Singapore side, but I believe it will soon be seen.
2) Tokenization of assets (STO of legal securities assets is blue sea)
The global digital currency currently has a total scale of about $2trillion, bitcoin of 1trillion, Ethereum of about $300billion, and coin an of 8 and $900 billion. Therefore, in general, it is relatively concentrated and the scale is not large. If the part of the traditional financial assets of $2 or $3 billion is transferred to the blockchain, there is a great space for the growth of blockchain data economy.
Traditional commercial banks, investment banks and asset management exchanges can benefit from sto. In the past, investment banks could make a fortune by issuing stocks and bonds. Now they can make another one, and make another token of stocks and bond assets. Can we complete a part of the issue through token issue when we are going to issue new assets in the future?
We can see some tokenization efforts of traditional financial assets:
In April 2021, coin announced that investors could buy and sell Tesla stock price tokens and coinbase stock tokens in the currency encryption currency transaction.
In October 2018, JPMorgan Chase, the US banking giant, announced that it would use its blockchain platform quorum to “tokenize” gold bars.
In october2020, DBS, Singapore’s largest commercial bank, announced the launch of DBS digital exchange, the digital trading platform. In addition, DBS will announce a token bond in the near future.
In november2019, HSBC Singapore announced the issuance of a 5.5-year public bond worth SGX and Temasek, the Singapore sovereign investment fund, worth about $294million. Of these, new $100million ($74million) is token bonds.
3) The capitalization of data — epoch-making off balance sheet assets value
What is truly epoch-making is the capitalization of data. The current Internet of things technologies, such as the boat SDK of Molian technology, can ensure that the data is real from the acquisition side, and then the trusted data is linked, and it cannot be tampered after the chain is connected. The credibility of data is the basis of the whole digital economy. If the data is not credible, how can we talk about the data economy? There are also technical issues related to the establishment of data privacy law and the implementation of data privacy computing. With the help of blockchain technology, we can adopt such privacy protection technology as Platon, and can confirm the assets and calculate the assets of the people who own the data under the premise of complying with the privacy protection laws of various countries.
The practice of data asset: platform “distributed AI” platform
Data is the core factor of production. Raw data without processing and lack of protection is difficult to produce value because of its portability and easy to copy. Similarly, AI algorithm can be regarded as a special data, which needs privacy protection.
We do not have the ability of general AI at present. Most AI and big data applications are similar to local area network, and can only use split, separated, local and local data; Only with the support of privacy computing can global data be aggregated to do large-scale AI computing across cloud, platform, account and terminal, and give the model training results and application scenarios. The ability provided by distributed AI is similar to that of the original AI, as compared with the single game.
The local platform network, which is launched in Singapore, is already online. They have already started working with one of the top three banks in the United States and one of the top 10 banks in China in the field of “openbanking data open bank”. The privacy computing network they are committed to building is essentially based on the privacy computing capability to support future large-scale and distributed AI operations, which are embodied in data trading market and model trading market, and can also be various separate applications.
Since this year, the volume of NFT market has been in an explosive growth state. Taking opensea, the world’s largest NFT trading platform, for example, in January 2021, the trading volume of the platform was close to $8million, which increased to $90million in February, and exceeded $100million in March. The most famous deal was on March 11, 2021, when beeplenft’s “every days” was sold for $69.3 million.
Sotheby will pay the drop hammer price in bitcoin or eth, the bitcoin or eth, at the special venue of “Contemporary Art Evening shooting” on December 12. The decision made Sotheby the first large international auction house to accept virtual currency as a payment method for real art.
I think the NFT model is worth affirming. It can mark the original source of any work, and the smart wallet of NFT can help all the people to monitor whether there is abuse. In the future, NFT ecological play will be very diverse and interesting, but the super fire heat state in the last two months may not be sustainable for a long time.
Recently, coin an announced that it will be a platform for NFT, and I believe that this piece will develop very quickly in the short term. But NFT is only an application on the blockchain, and it is on the entertainment front page. It does not represent the real blockchain large-scale application. The real blockchain large-scale application I think is defi.
Part three: the largest blockchain application growing arbitrarily: defi
Currently, defi can be considered as a technology represented by two projects, uniswap and compound.
Uniswap is a decentralized trading platform (Protocol) on Ethereum blockchain, which mainly provides liquidity trading services for Eth and erc-20 tokens. The protocol has only 500 lines of code, which is the most user of the defi applications. The biggest feature of uniswap is to replace the order book mode of traditional exchange with the automatedmarketmaker (AMM). In september2020, uniswap issued digital currency to reward users involved in the uniswap deal (i.e. “liquidity mining”).
Compound is a decentralized lending platform (agreement) on Ethereum blockchain, which provides over mortgage loan services for Eth and erc-20 tokens, and is called “decentralized algorithm bank”. Depositors provide their capital to the compound agreement in exchange for the interest that compound generates by investing its capital into the loan. The borrower will mortgage the specified word currency over the compound smart contract to borrow the digital currency supported by the compound agreement. When the borrower needs to retrieve the mortgaged assets, it is necessary to return the borrowed principal and the agreed interest. In june2020, compound issued digital currency to encourage users to participate in the loan of the compound agreement and to provide governance voting rights.
If we use a securities trading system to compare 500 lines of uniswap code and a bank credit system to compare composu, we will find that blockchain is very efficient and simple, and the operation of soft so good has proved that the system is safe and reliable. Of course, defi needs to accept more severe tests and severe challenges than the reliability of BTC 12 years verification, but I believe that defi will finally pass the pass.
These two technologies have helped the market for defi to grow rapidly. As of April 24, 2021, the total size of the defi fund pool has reached $61.1 billion, the daily transaction volume is nearly $10billion, and the daily transaction handling fee income is nearly US $30 million. In fact, during my PPT, this figure has been updated. When I was counting these figures before January, the defi fund pool was 43.5 billion dollars, a week ago, it was $61.1 billion, and by the end of last night, the total lock up was 103.4 billion dollars, and the net lock up volume might be about 70 billion. So I think according to the current development situation, it is expected to end 2021, The total size of the defi pool can reach $500billion, and even have the opportunity to hit $1trillion.
In terms of the number of users, the number of users has also increased from 93061 addresses in early 2020 to 1172208 addresses, an increase of 1159%. By the end of the first quarter of 2021, it has increased further to 1757583 addresses, with users growing by nearly 50 percent.
Let’s take compound as an example to understand the lending and risk control model of defi. First of all, I’d like to say why we should be interested in this matter? Because of the profit, but the current deposit income put in the bank may only be less than 0.1% annually. However, if the money is put into compound, it can get 2.8% to 7% annual return. It is expected that the return should be 5% to 7% annually. But we don’t think it’s true to think it’s true to drop pies in the sky. First, we need to see if there are traps at our feet. So, to study the mechanism of defi, is its underlying assets safe? So let’s start with compound’s wind control.