We Glean About the Bright Future of Mainstream Digital Assets?
On the back of several years of massive expansion for blockchain, crypto and non-fungible tokens (NFTs), the digital assets management group IDEG, a member of the CTH Group alongside Web 3.0 infrastructure service pioneer Atlas, has just wrapped up its Institutional Digital Assets Summit in Singapore. Insightful, thought-provoking and engaging in equal measure, the talks and discussions focused on a wide range of themes with critical importance to digital assets’ ecosystems.
But a single thread seemed to unite them all: What are the challenges and opportunities that we need to embrace as digital assets become established features of the mainstream?
Being ready for future opportunities
The summit was kicked off by an address from CTH Group CEO Raymond Yuan, one of the world’s top thought leaders in the blockchain ecosystem. Among the topics that Yuan touched on within a wide-ranging talk on megatrends in Web 3 and digital assets was the principles that blockchain stakeholders must abide by if they are to prevent repeats of credibility-sapping incidents such as the Ronin hack.
Building on what he discussed in a recent article published on CoinDesk, Yuan set out Atlas’ “ISG” (infrastructure, signing authority and governance) formula. It allows blockchains to scale – something that they will increasingly need to do as their widespread application in mainstream activities becomes better understood – without compromising their security or decentralization. If more blockchain architects heed Yuan’s advice, we’ll likely see smooth and sound implementation of blockchains across a range of industries in the years ahead.
Realizing blockchain’s full potential
If Yuan set out how blockchains need to be designed as they consolidate their position in the mainstream, many of the speakers and panels that followed his address shed light on where there‘s exciting potential for new blockchain implementations.
IDEG's Chief Investment Officer Markus Thielen gave a presentation on the institutional adoption of digital assets through the use of fundamental analysis, as protocols with revenue can now be valued on a cash-flow basis. He also introduced IDEG's flagship "All-Weather'' TIMES fund, which allows investors to allocate towards strategies that are perceived to perform well in a balanced market environment.
IDEG’s Managing Director Wang Hao facilitated a panel on NFTs and the metaverse. The participants had a lot to say about the recent flood of investment into NFTs and the vast potential for returns that their integration into a fast-expanding metaverse is creating. They also cast a critical eye over the issues that corporate and institutional investors need to consider as they formulate strategies to engage and expand their user bases on the back of their investments in NFT and metaverse ecosystems.
Echoes of this call for balance in response to mainstream growth resonated in the panel on institutional staking and decentralized finance (DeFi). Led by Kevin Loo, head of investment insights at IDEG, the panel discussed the mixed feelings of institutional investors about involvement in blockchain-based investments: While they can see the benefits of having a stake on the one hand, they are looking for guidance on how to contribute to this young sector.
Unsurprisingly, the Terra and LUNA crash came up as the embodiment of why a headlong rush into any and all forms of DeFi and crypto has to be avoided and better managed if the sector is to prosper in the long run. Above all, the innovative new investment instruments that will continue to emerge need to be built on the lessons learned from cases such as Terra’s LUNA.
Some of the panels focused on established subsectors of the finance world where digital assets are still unexplored territory. For example, the panel on opportunities for family offices and private wealth management, led by Christophe Lee, head of institutional sales at IDEG, highlighted the swell of enthusiasm among smaller firms that manage wealth for individuals to integrate digital assets into their client offerings. Here again, the summit revealed another entry for digital assets into the financial mainstream. In a similar vein, the discussion at the panel on liquidity providers in digital assets revealed just how diverse the range of market makers who are interested in digital assets has become.
The panel highlighting the status of the global regulatory environment addressed the challenge different jurisdictions are facing when it comes to achieving a balance between protecting consumers and driving growth in the digital assets space – the recent terraUSD collapse being a prominent example of how the average consumer is potentially susceptible to project failures and scams. A need for solutions permeated the conversation: One panelist even suggested that the clear message coming out of Davos is that only when the industry overcomes its risk-related growing pains will it enjoy a more prominent position at the mainstream table alongside global institutions. Among the suggestions explored by the panel was whether retail investors that access this asset class through professionals – who can help navigate opportunities and manage risk – are less susceptible to scams.
Partnering with experts
Intermingled with all the panelists and fascinating insights about present and future trends in digital assets was a steady stream of nuanced practical advice for stakeholders from across the blockchain and finance ecosystems.
The thought leadership on show here made it clear that working with experts – who have a track record in successfully navigating the dynamic ecosystems of blockchains – is the surest way to face the challenges, anticipated or unexpected, that will arise as more and more of the mainstream is built on blockchain.
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