On the bank of a river, there stood a tall oak near some reeds. The tree was very proud of its strength and size. He often used to make fun of the weak and slender reeds.
One day, as the wind started blowing, the oak said mockingly ‘oh! Reeds you move to and fro even with the slightest breeze'. The reeds kept quiet and continued to sway back and forth. ‘Look at me. I am so strong and mighty. Nothing can bend me’ boasted the tree. Suddenly, the wind turned into a hurricane. The little reeds prevented themselves from getting uprooted by bowing their heads and swaying with the rhythm of the wind. But the oak which stood straight and tried fighting the hurricane wind was soon uprooted and thrown into the river.
As we celebrate international women’s day, and as our world goes through so many changes, sociologically, politically, economically, and ethically, we thought it high time to speak about overcoming adversities, building resilience, and bouncing forward. If we are to relate this topic to our financial industry, where a paradigm shift is happening, we are so entitled to speak about Web 3.0 and some of its financial components.
But it is more than that. Web 3.0 is a natural phase in the evolution of the internet that aims to connect data from businesses, individuals, and machines worldwide to deliver a more connected and intelligent internet. The new experiences that are created, the way transactions are conducted, and the new payment method that we will be using, sit at the crossing between financial and non-financial services. In this context, crypto projects are not just about money per se, but projects that benefit a lot from being directly plugged into the whole ecosystem – this massive value layer created by Web 3.0. Pieces of art, domain names, and video games could make good examples of NFTs, the digital bridges between the physical world and tokens. As Vitalik Buterin, Ethereum Foundation put it at SFF 2021, ‘the future is not financial or non-financial, but mixed financial’. By 2030, 60% of global consumers will have made a transaction using a unit of value other than fiat currency. Also, 73% of global consumer payments will be processed by non-financial institutions on the Internet of Payments. Therefore, both traditional financial and non-financial institutions need to adapt their technology quickly for a market in which users expect more choices in terms of more tailored payments and credit propositions as well as units of value. When the wind blows, do we choose to be the stand-still oak or the resilient reeds? If the latter, then educating oneself on these topics before the transition is crucial.
We have gathered subject matter experts that delve into the Metaverse, DeFi, NFTs, GamiFi, and MetaFi, to briefly present these concepts and reveal the potential behind these concepts in building the next web. Enjoy!
Metaverse – Alice Liv, Co-founder of SecondLive
In my opinion, metaverse in the era of Web 3.0 means that individuals with different on-chain identities can reach out to and communicate with one another in an infinitely rich virtual space and thus creating a parallel universe with deeper interpersonal linkages. Individuals are defined by their behaviours/on-chain data, and all this data is a reflection of real individual characters.
In different spaces like virtual exhibitions, workshops, personal spaces, art galleries, game rooms, concert rooms, and so on, users can play around with avatars. These avatars help creators and users make their content and profit from their creations.
So, SecondLive focuses on facilitating self-expression, social connections, and accumulations of wealth, integrating open data protocols on-chain to show the result as is needed. SecondLive is a diversified metaverse focused on building social networks and supporting creator economic activities. Within the metaverse, users can craft their digital lives - creating their own avatars and choosing spaces to stay and to live.
About Alice: I am a person who likes a challenge rather than a static life. So, I started my own business after graduating from school. Before entering the blockchain field, I also had entrepreneurial experience in fintech. The blockchain space has been a wonderful experience for me, and despite having been through a very painful phase of a bear market, the industry is exciting and loving. There are very cutting-edge technologies in this field, there are constantly changing industry hot spots, and there are many young, talented, and enterprising people. The industry is changing with each passing day. Actively or passively, we must continue to grow and renew ourselves. It's all exciting.
DeFi – Diane Dai, Co-founder of DODO
DeFi is the cornerstone of Web3. The current paradigm of DeFi to build liquidity is AMM + Liquidity Mining. (An automated market maker – AMM is a system that provides liquidity to the exchange it operates in through automated trading.) Uniswap led the innovation of AMM to firstly make the long tail assets have liquidity without centralised barriers. Sushiswap firstly brought the ‘Pool 2 Mining’ solution which empowered the liquidity providers to play a vital role in the DeFi ecosystem. However, the current DeFi is lacking capital efficiency. The cost to maintain liquidity by liquidity mining is high and the liquidity providers (LPs) that DeFi protocols attracted by high APR are not loyal. (The monetary value or reward that investors may earn by making their crypto tokens accessible for loans, taking into consideration the interest rates and any other fees that borrowers must pay, is referred to as the annual percentage rate – APR.)
DeFi in the next paradigm will value more ‘Effective Value Locked’ than ‘Total Value Locked’ with better capital utilisation solutions. With more professional traders and institutional market makers on-boarding DeFi, and with programmable market-making strategies enabled by def infrastructure, a more efficient DeFi space is coming.
About Diane: DODO co-founder Diane Dai is a prolific innovator and thought leader in decentralised finance. Diane was also recently named to Wirex’s 2021 Rising Woman in Crypto power list and Hurun China’s Under the 30s to Watch.
GameFi – Katherine Li, Head of Marketing at ApolloX
GameFi is a portmanteau, coined from the words ‘gaming’ and ‘finance’. The next step in gaming, GameFi mashes DeFi and NFTs with blockchain games. In traditional games where players play to win, GameFi adds a monetary element where players play-to-earn (P2E), and own, in-game virtual assets. This is facilitated by blockchain technology, which proves authenticity and ownership of the assets. GameFi can range from gamification elements like raffle tickets to full-blown NFT games with their metaverses. Thus, it affords both accessibility and diversity, not only to players but also to game developers. GameFi products ideally include good graphics, gameplay, and smooth smart contract execution. Blockchain scalability issues should not hinder in-game interactions. The game’s financial model should also be sound and accessible to encourage mainstream uptake. Today, popular P2E games include Axie Infinity and The Sandbox, among others. Each game has its tokenomics and in-game virtual assets, commonly in the form of NFTs. But take a look again and you will see that GameFi exists anywhere. For example, the ApolloX team is currently building an NFT Lottery Game. Even though we are primarily an exchange, we can incorporate gamification into our products. This Lottery Game would allow players to mint customisable NFTs using our native token APX. The NFTs provide extra monetary perks and have utility as trading fee rebates on our DEX. According to DappRadar, GameFi received over USD 1 bln in funding from venture capitalists in January 2022 alone. Compare this against USD 4 bln in the whole of 2021. GameFi also accounts for 52% of blockchain activity in 2022 so far. To add on, traditional gaming giants the likes of Ubisoft and Roblox, and even entertainment companies, want to enter blockchain gaming. With all these in mind, it isn’t hard to imagine the skyrocketing potential of this industry.
About Katherine: Katherine Li Head of Marketing, ApolloX. Katherine is in charge of the fun side of things at ApolloX. She enjoys being in the thick of crypto’s journey toward mainstream adoption.
MetaFi – Gwendolyn Regina, Investment Director at BNB Chain Fund
Blockchain technology in its purest form is arguably a revolutionary concept, which challenges standardised ideas by proposing more secure alternatives to increasingly important issues such as privacy, transparency, trust, traceability, and finance. While the world develops technology to create new forms of digital assets on the blockchain, what simultaneously develops alongside, are the ideas and innovation surrounding disruptive technology. At the BNB Chain Fund, we see projects and startups building across use cases and categories and a new concept that we think summarises the financialisation of the world today is MetaFi. Combining Meta for metadata, and Fi for DeFi, MetaFi denotes the creation of an all-around infrastructure for everything falling under Web 3.0, from GameFi and NFTs to the Metaverse or SocialFi. As the blockchain ecosystem supersedes a trillion-dollar market, MetaFi is an idea that represents recent innovation, displaying the new singularity and interoperability of networks such as BNB Chain. This has allowed for the rapid acceleration of projects, Games(fi), or Social(fi) media alternatives on the blockchain, to organise and accumulate into a sophisticated, advanced format. The goal of MetaFi is to build and foster a new ecosystem, built on standardised metadata parameters, based around digital assets that empower mass adoption in Web 3.0 and blockchain technology and provide users and players with new use cases. As MetaFi aggregates then presents a universal dimension of accumulated metadata, it will allow for an increase in creativity as well as open a wider breadth of opportunities for developers, including possible digital creations such as: virtual worlds, fan tokens, yield farming NFTs, and NFT marketplaces. MetaFi as an idea, is an accelerator of innovation, as it rewards and preserves for builders on the blockchain, a much more cohesive and skilled set of tools.
About Gwen: Gwendolyn Regina heads BNB Chain (previously Binance Smart Chain) USD 1 bln fund. Launched in 2021, the BNB Chain fund aims to bring 1 billion crypto users onboard, boosting the adoption of BNB Chain and the wider blockchain industry. Her main responsibilities include streamlining processes around deal sourcing, investment strategy, portfolio management and growth. As a part of her role she invests in promising projects in the Web3 and MetaFi space (GameFi, SocialFi, NFTs etc.). Gwen has been speaking internationally for the past decade across Asia, Europe, and the US. She regularly gives keynotes, moderates panels, and speaks at forums about the future of Web 3.0, media and tech, including at global events and podcasts like Unchained, SXSW, ad:tech, Seedstars, Startup Turkey, Channel News Asia, and more.
The concepts we explored briefly are just a small piece of what the new Web 3.0 will look and feel like. There are some other initiatives in this space (tokens, digital assets, programmable money, etc.), plus variations (retail CBDC, wholesale CBDC, etc.), that stress the fact that blockchain technology and cryptocurrencies have started to transform the future (of finance). To help build it, join the conversation.
About Mirela Ciobanu
Mirela Ciobanu is a Senior Editor at The Paypers and has been actively involved in drafting industry reports, carrying out interviews, and writing about innovation in payments and fintech. She is passionate about finding the latest news on AI, crypto, blockchain, DeFi and she is an active advocate of the need to keep our online data/presence protected. Mirela has a bachelor’s degree in English language and holds a master’s degree in Marketing. She can be reached at mirelac@thepaypers.com or via LinkedIn.
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