No 269 - Tokenisation Framework for Evolving Web2 to Web3

We are still at the era of Web 2.0 today, but the trend towards Web 3.0 has emerged. The differences between Web 3.0 and Web 1.0 can be identified by comparison in multiple aspects. This article focuses on the business model, underpinned by the relationship between bits and value.

Given Hong Kong, Japan and Singapore are the Asian countries and regions outside of China representing the highest standard of digital currency, in comparing their similarities and differences in digital currency plans, we can not only understand the relationship among retail CBDC, stablecoins and e-money, but also understand the division of labor between the public sector (mainly the central bank) and the private sector in the digital currency ecosystem.

In recent years, people’s attention to the privacy and security of personal data has increased much significantly. This article will discuss the issue from the perspective of identity management, mainly including four aspects: First, what are the problems remaining with traditional identity management solutions? Second, what is decentralized identifier (DID)? How to technically implement it? Third, what are the bottlenecks in the development of DID? Fourth, what kind of breakthroughs can blockchain technology and DID jointly make?

The “creator economy”, a hot topic among NFT applications, describes a new market that is led by creators during the process of income generation and customer relationship maintenance. Traditionally, creators rely on distribution platforms to access users, but the Creator Economy seeks to challenge this norm.

This document expands the scope of cryptoassets, defines the classification standards of cryptoassets and discusses how to treat cryptoasset exposures around the three key pillars of the Basel Framework – minimum capital requirements, supervisory review and market discipline.

We can see from this that the development of the current NFT market focuses more on business operation rather than technology. Even though the capacity of the bottom-layer blockchain and the NFT standard have not yet reached the production grade, products can be launched to the market with high-quality IP resources and an operating model that meets target customer’s needs.

This article includes three sections: 1) a general introduction about ETF, as the reference for understanding Bitcoin ETF, 2) discussion on two major designs of Bitcoin ETF and the challenges they face, and 3) summary of key obstacles in obtaining SEC’s approval on Bitcoin ETF products.

NFT’s success in its business model provides a new way to interact with digital assets. Digital assets, as a type of data factor, are standardized as tokens through smart contract standards such as ERC-721 and possess programmable financial or business attributes.

In cross-border payments, digital currencies refer to CBDC and global stablecoin that have stable value and can perform the basic functions of money (that is, medium of exchange, unit of account, and storage of value), instead of cryptocurrency such as BTC which is mainly for speculation. How should we understand CBDC and global stablecoin? Why can they be used to enhance cross-border payments? What regulatory principles and implementation strategy should we adopt when applying them in cross-border payments? We will discuss these three questions one by one in this article before sharing our suggestions on China’s policymaking.

Constant product automatic market makers (AMM) such as Uniswap have achieved great success in the crypto asset market. However, they are also troubled impermanent loss. Some projects attempt to enhance the Uniswap model such as introducing oracle quotations to lower impermanent loss. But there is no commonly recognized improvement plan yet.

Impermanent loss is a critical issue faced by liquidity providers in automatic market making (AMM). However, there are many specious arguments about the quantification of impermanent loss. We will clarify these arguments and discuss its hedging strategy based on the quantification of impermanent loss.