Connect with us

Fintech

Singapore Fintech Report 2021: Blockchain Dominates Singapore’s Fintech Scene

Published

on

Singapore’s fintech industry continued its momentum in 2020 on the back of new regulations, fintech initiatives from regulators themselves and the introduction of the city state’s very first digital banks, according to the Singapore Fintech Report 2021 produced by Fintech News Singapore in partnership with Alibaba Cloud.

The Singapore Fintech Report 2021, released in January 2021, which can be downloaded here, looks at the state of the fintech industry in Singapore, highlighting the key developments made in 2020 that are set to shape the industry for the year to come.

Advertisement

The report indicated that 2020 was a fruitful year for Singapore’s fintech startups which continued to grow and attract funding. Fintech investment in Singapore reached US$346 million in 2020, representing 6.2% of all that was raised in Asia.

The sector continued to mature and consolidate with several acquisition deals taking place last year including the purchase of robo-advisory fintech Bento by Grab, and the merger of insurtech player Singlife with Aviva Singapore.

The year also saw the granting of four digital banking licenses. Two digital wholesale bank licenses went to Ant Group, and a consortium comprising Greenland Financial Holdings, Linklogis Hong Kong and Beijing Co-operative Equity Investment Fund Management, and two digital full bank licenses were awarded to the Grab-Singtel consortium and tech giant Sea.

These four digital banks will not have traditional brick and mortar branches but will market their services and operate almost exclusively online. They are expected to shake up the banking industry by applying cutting edge technology to serve financially excluded population. Singapore’s digital banks are set to start business from early 2022.

In 2020, Singapore showed its commitment to open banking with the Monetary Authority of Singapore (MAS) and the Smart Nation and Digital Government Group (SNDGG) launching the Singapore Financial Data Exchange (SGFindex). The infrastructure makes use of Singapore’s National Digital Identity (SingPass) to allow citizens to obtain their financial information from different financial institutions and government agencies.

Leveraging SGFinDex, Singaporeans can consolidate all of their finances through financial planning services offered by financial institutions as well as through MyMoneySense, a free financial planning digital service offered by the Singapore government.

Singapore Fintech Report 2021: Blockchain takes center stage

One fintech vertical that has risen to prominence in Singapore is blockchain and cryptocurrency, which now dominates the local fintech scene.

Out of the 430 fintech startups identified in Singapore, 19% operate in the blockchain and cryptocurrency vertical, making it the biggest segment, ahead of payments (16%), investments and wealthtech (14%), and regtech (11%).

2020 saw the city state show support for the sector with the launch of a new S$12 million blockchain research program. The Singapore Blockchain Innovation Program aims to accelerate the development and adoption of the technology, and will engage close to 75 companies to conceptualize 17 blockchain related projects within the next three years in sectors starting with trade and logistics, and supply chain.

The year also saw the Payment Service Act (PSA) come into effect, requiring cryptocurrency businesses to obtain a license from MAS to comply with anti-money laundering/combating the financing of terrorism (AML/CFT) regulations. Singapore’s new legislation has been praised for providing regulatory clarity on the emerging asset class and industry, and could potentially lure companies in the space into setting up shop in the city state.

Singapore Fintech Report 2021: Overview of MAS’ payments modernisation efforts

In the payments space, Singapore continued to modernize its payment infrastructure in 2020, with a main area of focus being interoperability and real-time transactions.

MAS said in November 2020, that starting from February 2021, eligible non-bank financial institutions in Singapore will have direct access to PayNow and FAST, the country’s retail payment platforms, through a new API payment gateway.

From a customer’s perspective, this means that e-wallet users will soon be able to make funds transfers between bank accounts and across different e-wallets. Currently, most e-wallets can only be topped up via credit or debit cards, and funds cannot be transferred between e-wallets.

Singapore has also been working with neighboring countries to connect retail payment infrastructures. In December 2020, MAS announced that the linkage between Singapore and Thailand’s national faster payment systems will officially go live in mid-2021. The project, which has been in the works for three years, will connect Singapore’s PayNow system with Thailand’s PayPrompt to make cross-border payments cheaper and faster.

MAS managing director Ravi Menon has said that the regulator was interested in working with other central banks in the region to expand the linkage across Southeast Asia.

Singapore Fintech Startup Map 2020

Download the full Singapore Fintech Report 2021 here

Print Friendly, PDF & Email

Source: https://fintechnews.sg/47131/studies/singapore-fintech-report-2021-blockchain-dominates-singapores-fintech-scene/

AI

Cardano Partners With Chainlink for DeFi Smart Contracts Development

Published

on

During a period of major corporate and institutional interest in the crypto industry, nearly 5,000 new tokens have emerged in the last 12 months, averaging over 10 new coins per day, new data shows.

Cryptocurrency Boom of 2021

As can be observed on CoinMarketCap’s homepage, the number of existing cryptocurrencies has recently surpassed 12,000. This is well over the approximately 7,100 coins recorded by the site in September of last year, meaning that at least 4,900 new digital assets have been created in the last 12 months alone.

This represents the largest YoY surge in the absolute number of cryptocurrencies since Bitcoin’s inception. During this time, the digital asset industry achieved a total market cap of over $2 trillion.

Interest in crypto creation is largely driven by Bitcoin’s price gains in the past year, as well as increasing institutional involvement in the space.

As household names like Elon Musk and Jack Dorsey show support for the industry and its possibilities, both creative and financial interest continues to be drawn into the space. This further bolsters the markets, inspiring developers to work on their own cryptocurrencies to avoid missing out on potential gains and demand.


ADVERTISEMENT

Furthermore, digital assets have garnered high interest as an asset class for hedging against inflation – especially during the economic crisis created by the coronavirus pandemic. While September of 2020 saw stock markets plunge, cryptocurrencies mostly held their value. This may have inspired even more creators to start investing and developing in the emerging asset class.

Is This a Good Thing for Crypto?

Through increased interest and technological development is crucial to the crypto industry’s growth, an ever-growing number of coins may be counterproductive or even dangerous.

For example, SEC chair Gary Gensler is only more skeptical of the space due to the vast number of tokens in existence. Recognizing that there is no room for thousands of different currencies, he plans to further regulate the industry to protect investors before some of them inevitably collapse.

Indeed, many of these tokens seem like dangerous investments – if not outright scams. Over $25 million were lost to crypto scams among Australians only in the first half of 2021

SPECIAL OFFER (Sponsored)

Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to get 50% free bonus on any deposit up to 1 BTC.

You Might Also Like:

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://coingenius.news/cardano-partners-with-chainlink-for-defi-smart-contracts-development-4/?utm_source=rss&utm_medium=rss&utm_campaign=cardano-partners-with-chainlink-for-defi-smart-contracts-development-4

Continue Reading

AI

Cardano Partners With Chainlink for DeFi Smart Contracts Development

Published

on

During a period of major corporate and institutional interest in the crypto industry, nearly 5,000 new tokens have emerged in the last 12 months, averaging over 10 new coins per day, new data shows.

Cryptocurrency Boom of 2021

As can be observed on CoinMarketCap’s homepage, the number of existing cryptocurrencies has recently surpassed 12,000. This is well over the approximately 7,100 coins recorded by the site in September of last year, meaning that at least 4,900 new digital assets have been created in the last 12 months alone.

This represents the largest YoY surge in the absolute number of cryptocurrencies since Bitcoin’s inception. During this time, the digital asset industry achieved a total market cap of over $2 trillion.

Interest in crypto creation is largely driven by Bitcoin’s price gains in the past year, as well as increasing institutional involvement in the space.

As household names like Elon Musk and Jack Dorsey show support for the industry and its possibilities, both creative and financial interest continues to be drawn into the space. This further bolsters the markets, inspiring developers to work on their own cryptocurrencies to avoid missing out on potential gains and demand.


ADVERTISEMENT

Furthermore, digital assets have garnered high interest as an asset class for hedging against inflation – especially during the economic crisis created by the coronavirus pandemic. While September of 2020 saw stock markets plunge, cryptocurrencies mostly held their value. This may have inspired even more creators to start investing and developing in the emerging asset class.

Is This a Good Thing for Crypto?

Through increased interest and technological development is crucial to the crypto industry’s growth, an ever-growing number of coins may be counterproductive or even dangerous.

For example, SEC chair Gary Gensler is only more skeptical of the space due to the vast number of tokens in existence. Recognizing that there is no room for thousands of different currencies, he plans to further regulate the industry to protect investors before some of them inevitably collapse.

Indeed, many of these tokens seem like dangerous investments – if not outright scams. Over $25 million were lost to crypto scams among Australians only in the first half of 2021

SPECIAL OFFER (Sponsored)

Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to get 50% free bonus on any deposit up to 1 BTC.

You Might Also Like:

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://coingenius.news/cardano-partners-with-chainlink-for-defi-smart-contracts-development-3/?utm_source=rss&utm_medium=rss&utm_campaign=cardano-partners-with-chainlink-for-defi-smart-contracts-development-3

Continue Reading

Fintech

Emprendedoras – Las líderes que cambian el mundo en la era digital – LIBRO

Published

on

Emprendedoras

Recientemente se ha publicado el libro de Teresa Alarcos sobre casos de éxito de mujeres emprendedoras en la era digita. Teresa Alarcos es conferenciante y cuenta con más de veinte años de experiencia ejecutiva en diferentes industrias, instituciones culturales y fundaciones: Vivendi Group, Lycos Europe, Yoigo, Eli Lilly y Ono-Vodafone. Estudió Management en UCLA-Anderson, IESE, Esade, IE, Harvard, y es graduada y diplomada en el IC-A. Actualmente es consejera independiente de varias compañías. Fundadora y presidenta de la W Startup Community, es líder de un chapter de Singularity, y miembro de la red internacional de consejeras Women Corporate Director. Forma parte de la red de Business Angels de Harvard Club y del Consejo Asesor del Real Colegio Complutense de Harvard. Impulsa y dirige el primer Estudio Emprendimiento digital femenino ( Instituto de las mujeres y ONTSI) Le apasionan y es especialista en temas de género, ecosistemas globales; ESG /ODS y buen gobierno corporativo.

FintecNews.org se ha reunido con Teresa para una entrevista para hablar de las emprendedoras y de su libro.

FintechNews (FN): en el mercado de las startup, ¿Cuál la la parte de este mercado cubierto por mujeres?

Teresa Alarcos (TA) Según el último informe publicado por el WEF la industria del emprendimiento es de 2,8 billones de euros que crece al 30% anual. En España el último dato es que la inversión en startups superó por primera vez los 1000 millones de euros alcanzando los 1300 millones el pasado año, por la Revista El Referente. El emprendimiento innovador entre founders y cofounder mujeres llega según distintas fuentes (www.wstartupc.com ) al 15-17%, y solo mujeres founders 5%. Hay un claro gap de inversión frente al cual debemos tomar acción y crear unos Planes de emergencia para activar el emprendimiento diverso  que es fuente de bienestar y crea riqueza en la sociedad.

FN: hoy en día se habla mucho de diversidad. Crees que es un tema importante de verdad?

TA: Si, hombres y mujeres juntos viendo y creando soluciones en equipo, colaborando y  co-creando, compartiendo  ideas complementarias. Es la sociedad que emerge es hablar de valor económico , de diseñar una sociedad igualitaria donde se tienen en cuenta a la otra  mitad del talento.

FN: ¿Qué índices de éxito hay en las startup de mujeres?

TA: 15-17% según nuestros datos, ahora realizaremos un nuevo estudio y veremos el impacto de la pandemia. La mujer emprendedora es una mujer emprendedora en serie 1 de cada 4, internacional, ha vivido en varios países, y ha trabajado en corporaciones 10-15 años de media. Es un emprendimiento oportunista, no ocupacional.

FN: ¿Qué le aconsejaría usted a una chica que quisiera ser emprendedora?

TA: Perseverar en su propósito. El camino hacia el objetivo es una línea quebrada y no una línea recta. Buscar un equipo, alguien complementario; ir a una aceleradora y conseguir mentores. Esa es la base, y por supuesto que sea algo que cubre una necesidad de clientes. Probarlo sin que esté perfecto para mejorarlo y conseguir es mínimo producto viable, para ir a buscar financiación. En fin, es todo un reto.

FN: ¿Cuántos casos de éxito de mujeres emprendedoras se cuentan en su libro?

TA: En el libro se habla sobre qué está pasando en el mundo en temas relacionados con la disrupción, de estrategias de acercamiento y puentes entre ecosistemas y corporaciones,  sobre cómo crear una startup, y finalmente los 21 casos de startups representan a las pioneras  de los 5 continentes en materia de AI, ML, Blockchain, Crispr, robótica, realidad aumentada, realidad virtual etc. Todos son casos alineados con los ODS de Naciones Unidas. Realmente son casos de alto impacto, muy invisibles y difíciles de encontrar, que ayudan y aceleran un cambio a bien de la sociedad, y revolucionan industrias enteras.

¿Mis favoritos? Son todos. Os invito a leerlo. Os va a inspirar seáis hombres o mujeres. Lo podéis encontrar en la casa del libro y en Amazon y cualquier librería.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://www.fintechnews.org/emprendedoras-las-lideres-que-cambian-el-mundo-en-la-era-digital-libro/

Continue Reading

Blockchain

Designing internet-native economies: a guide to crypto tokens

Published

on

One of the big, frequently discussed ideas of crypto is that it enables creators and communities to build their own internet-native economies. A key component of these economies is tokens, which got a bad rap during the ICO (initial coin offering) boom a few years ago. Yet tokens are the fundamental unit of value in crypto economies. They are (as has been argued by others too) a breakthrough in open network design, because they are a mechanism for incentivizing open network participants, including users, developers, investors, and service providers.

But what IS a token exactly? At the simplest level, tokens are just code that lives on a global peer-to-peer network called a blockchain. But unlike other forms of money, they’re digitally native, programmable, and secured by one’s crypto wallet and private key. Cryptocurrencies are just one type of token. 

There are two main categories of tokens: fungible (e.g., interchangeable) and non-fungible (e.g., unique). As more creators and communities build their own crypto economies, fungible tokens will be used to exchange goods, store value, and make collective decisions. Meanwhile, non-fungible tokens (e.g., NFTs) will be used to create new business models centered on collectibles, rewards, achievements, and more — giving people a sense of identity, status, and belonging.

The gaming industry knows this well. Games like Fortnite leverage fungible tokens (VBucks) and non-fungible tokens (skins, cosmetics, emotes, etc.) to create a rich internet-native economy. In 2020 alone, consumers spent approximately $54B USD on in-game purchases for virtual goods like livestock in FarmVille, skins in Fortnite, and extra lives in Candy Crush. But this is just the beginning of what’s possible. 

All the best crypto protocols, social apps, online communities, and marketplaces will need to deeply understand the interplay between fungible and non-fungible tokens to create their own internet economies. But why do we need internet-native economies in the first place?

The limits of traditional economies

Most traditional economies weren’t designed with the internet in mind. As a result, modern economies have a number of issues:

  • Lack of access. Globally, about 1.7 billion adults are unbanked. This limits the ability for people to start businesses, fund projects, and take entrepreneurial risks.
  • Inefficiency. High fees on credit card transactions and remittances as well as high interest loans make it difficult for low-income communities to participate in the economy.
  • Opacity. Banks operate under complex structures that make it difficult to understand their financial health and the risks they’re underwriting. Citizens are relegated to trusting that the government will preserve economic value through monetary policy, capital controls, and FDIC insurance; we’ve seen how this hasn’t always worked for us in the past.

These limitations reduce economic growth and amplify inequality. As more economic activity moves online, we need internet-native tools for building productive economies. Many people don’t have a bank account but do have a mobile phone with internet access.

This is where cryptonetworks come in. They provide the cryptographic (e.g., security without a third party) and economic building blocks for modern forms of production, distribution, trade, and consumption.

Let’s start by going deeper on fungible vs. non-fungible tokens.

Fungible tokens

Traditionally, money has served three primary purposes:

  • medium of exchange to facilitate trade
  • store of value to preserve wealth over time
  • unit of account to provide a standard measure of value

Economies invest money into productive assets like factories, scientific research, technology development, public infrastructure, etc. to drive economic growth. To make life enjoyable, consumers also purchase relatively “unproductive” goods like flat-screen TVs and high-end purses or sneakers.

Cryptoeconomies follow a similar dynamic. Money is circulated through an issuance policy, and reinvested along a spectrum of productive and unproductive assets. For example, the code running the Bitcoin network is scheduled to issue 21M bitcoins, rewards miners for securing the network, and allows bitcoin to be transferred directly between parties for various use cases. In the Ethereum network, money is represented by the ERC20 standard for fungible (i.e., interchangeable) tokens. Meanwhile, goods are represented by the ERC721 standard for non-fungible (i.e., unique) tokens — these are more commonly referred to as NFTs. (There’s also the ERC1155 semi-fungible standard but for simplicity let’s focus on ERC20s and NFTs.)

In addition to serving as a form of internet-native money, the programmable nature of ERC20 tokens enables three other use cases: equity, utility, and governance. Many tokens are a combination of each. Let’s take a closer look at these use cases as we go deeper into the taxonomy of tokens.

Equity tokens

Equity tokens are fungible tokens that represent ownership in an asset or a pool of assets. These tokens are used to incentivize participants to provide a scarce resource to a network. In cryptonetworks, scarce resources include capital, developers, customers, creators, and computing power.

When designing an equity token system, it’s helpful to think through the following questions:

  • What is the scarce resource our protocol needs?
  • Who has this scarce resource?
  • How do we incentivize them in a positive-sum way?

An example of how a protocol uses equity tokens to incentivize stakeholders to provide a scarce resource is Uniswap, a decentralized exchange for swapping tokens on the Ethereum network. Traditionally, centralized exchanges use a matching algorithm to determine which orders get executed; it’s a black box, with no transparency, auditability or community ownership. But with Uniswap, which is powered by open-source smart contracts, anybody can independently verify how their order will be executed. Since Uniswap’s goal is to offer the best execution price for token pairs on the Ethereum network, they need to incentivize liquidity providers (LPs) to deposit these tokens into pools that people can trade against. 

The protocol incentivizes LPs by giving them a proportional share of trading fees for any pool they’re an LP in. When an LP deposits a token pair into a pool, the protocol issues “pool tokens” to the LP, which gives them a pro-rata share of trading fees.

In this case, LPs are incentivized through equity tokens (e.g. pool tokens) to offer their scarce resource (e.g. capital) to improve the network.

Utility tokens

Utility tokens are fungible tokens that unlock functionality in a smart contract or off-chain system (like a Discord community). Utility tokens are difficult to enforce off-chain, so they tend to be most valuable when their functionality is enforced purely on-chain, through smart contracts.

When designing a utility token system, it’s helpful to think through the following questions:

  • What is the core problem we’re trying to solve?
  • Who are we solving it for?
  • How do we help them solve it in a positive-sum way?

Some example use cases of utility tokens — and their resulting cryptoeconomies — include:

Automated and trust-minimized loans

Until recently, it wasn’t possible to perform trading strategies — like shorting and leverage — in a decentralized/trust-minimized way because traditional exchanges require a centralized counterparty to take on credit risk and provide services like clearing and settlement. To enable decentralized lending on blockchains like Ethereum, protocols require traders to deposit tokens into a smart contract as collateral to unlock the ability to take out a loan. Tokens used as collateral for decentralized loans are an example of a utility token because they unlock automated functionality in a smart contract.

Compound is an example of a lending protocol building this on Ethereum. To take out a loan, you need to deposit one of the approved collateral tokens voted in through governance. Today, this includes tokens like ETH, DAI, USDC, BAT, and UNI, among others. By depositing collateral, you unlock the ability to take out a loan. Traders use Compound to take out leveraged long positions on ETH. For example, they’ll deposit ETH as collateral, borrow a stablecoin like USDC or DAI, and buy more ETH. You could do something similar for a short position. If interest on the loan isn’t paid on time or the value of the underlying collateral decreases a certain amount, automated bots called Keepers are incentivized to liquidate positions by receiving a cut of the transaction fee.

Access to a community

A common problem in online community building is fostering a sustainable community, one that limits spam, ensures members have skin in the game (vs. drive-by commenters), and incentivizes community members to make the overall community desirable to join over the long-term.

Friends With Benefits is an example of a tokenized Discord server for people interested in the intersection of art and crypto. To gain access to the Discord server, you are required to hold 60 $FWB (their token) in your crypto wallet. Today, that’s around $500. The relatively high barrier to entry serves as a “proof of work” to limit the spam that usually comes with public Discord servers. On the other hand, the token also serves as a coordination mechanism. If $FWB fosters a vibrant community, it will drive up demand for access to the community, which could increase the price of $FWB and make the existing community members’ holdings more valuable. 

As more communities become tokenized, I think we’ll see best practices like vesting schedules and lockup periods implemented to ensure long-term incentive alignment.

Equity tokens incentivize participation in a protocol, and utility tokens unlock functionality in a protocol while easing coordination among participants. But how do protocols actually govern themselves, so that all these activities can occur seamlessly and transparently? For that, we turn to governance tokens.

Governance tokens

Governance tokens represent percentage ownership over voting rights. It’s difficult for most community members to keep up with the latest developments for specific protocols, so most protocols allow token holders to delegate their votes to trusted representatives.

When designing a governance token system, it’s helpful to think through the following questions:

  • What are the public goods that should be governed by our community?
  • How should governance tokens be issued?
  • How do we design the governance system to be fair, flexible, and transparent?

Let’s go over some example use cases for governance tokens.

Parameter settings and upgrades

Cryptonetworks are powered by smart contracts. These smart contracts execute logic responsible for things like calculating interest rates in a lending protocol, implementing an automated issuance policy for a stablecoin, or determining the exchange rate for token swaps. 

When a smart contract is first deployed to the Ethereum network, it may contain admin privileges for certain parties to limit the risks of vulnerabilities. Once the smart contract has been tested enough in prod, admin privileges are usually removed to ensure the core team can’t update the protocol at will.

However, many times the protocol still needs upgrades and improvements. In Uniswap, $UNI holders can vote to turn on a protocol fee switch to redirect 0.05% of trading fees to $UNI holders instead of LPs. In Compound, $COMP token holders can vote on the collateral ratio for new tokens.

Recently, the community for a DeFi protocol called Yearn proposed one of the most sophisticated decentralized governance systems to date. The proposal suggests letting $YFI holders elect committees for specific domains like budget control, development roadmap, and investment strategies.

As all of the above examples show, fungible tokens are a great tool for exchanging goods, storing value, and coordinating online communities.

However, economies, companies, and protocols need business models to fund their growth. Additionally, people need tools to build relationships and feel a sense of purpose. That’s where NFTs come in.

Non-fungible tokens (NFTs)

At a high level, NFTs are unique digital tokens stored on a blockchain. We’ve seen a lot of activity and excitement in this space, but to focus on the bigger picture here, people value virtual goods for six main reasons:

  • Identity and belonging
  • Status
  • Personal meaning
  • Relationships
  • Collecting
  • Superpowers

Let’s take a closer look at how each applies to NFTs in crypto economies.

Identity and belonging

Identity and belonging are fostered by a sense of shared history and storytelling. Religious groups are masters at creating a sense of identity and belonging.

CryptoPunks are a quasi-religion within the crypto community. By owning a CryptoPunk, you signal that you value a historic artifact. You signal that you’d rather hold this artifact and be part of the CryptoPunk community than sell it for a massive bag. HODLers signal their identity by changing their profile picture to their CryptoPunk. Some even remove their CryptoPunk profile picture once they sell to signal this lost identity.

Status

Status is driven by price and scarcity. Whether it’s a Louis Vuitton bag or a Lambo, status signaling is a core part of human nature. On social media, status usually comes from follower counts and engagement metrics such as likes, shares, retweets, etc. These metrics are really just virtual currencies that live in a company’s database. But they’re inefficient because it’s difficult to convert likes and followers into cash. As a result, business-savvy creators use social media as lead generation for their actual businesses like a branded e-commerce store, merch drops, courses, etc.

But what if you could directly redeem likes for money?

I believe crypto-native social apps will create a new form of “non-fungible likes” that feel like the badges and in-game items in video games. For example, Snap’s Spotlight program pays creators for popular content. But it’s an opaque process. 

Instead, crypto-native social apps can allow consumers to vote on their favorite content, reward top-voted creators with NFTs, and allow these NFTs to be redeemed for a percentage of a prize pool. The process would be community-driven and independently verifiable because it’s done on-chain through crypto tokens and smart contracts. 

Today, top creators are rewarded with inefficient virtual currencies (e.g., likes/follows) and cash from a centralized platform. In the future, creators will build a new form of status through these community-driven NFTs which they own through their private key and can directly redeem for money.

Personal meaning

Personal meaning is driven by sentimental value and customization. Many people have a baby toy, trophy, or ring that means something special because of the story behind it. The fasting app, Zero, gives users badges to reward certain milestones like 24-hour fasts or 5 consecutive days of intermittent fasting.

Similarly, crypto protocols can issue NFTs to commemorate milestones and achievements based on on-chain activity. For example, Rabbithole partners with leading DeFi protocols to create quests that people can perform to receive a special NFT and/or protocol tokens. This helps protocols with customer acquisition while giving people a fun way to onboard into crypto by performing on-chain quests for special NFTs.

Another example is Uniswap’s v3 protocol. Whenever a liquidity provider (LP) deposits into a pool, the protocol transfers the LP an auto-generated NFT based on a number of factors like which pool they deposited into and at which range in the liquidity curve.

Over time, I believe the internet-native version of a trophy case and a walk-in closet will be collections of NFTs that commemorate important on-chain activity.

Relationships

In Japan, business people exchange gifts to build trust and signal respect. On Twitch, viewers send tips and buy gifts to signal their affinity in hopes for a shoutout. In cryptoeconomies, tips and gifting could become a core primitive for building relationships online.

Web 2.0 was about social graphs — follows, likes, comments. Web 3.0 is about social + economic graphs — NFTs you buy, projects you invest in, social tokens you earn. Company profiles on Crunchbase are an early example of economic graphs. For most startups, you can see who funded them, how much they received, and when the funding round took place.

Since all transactions on cryptonetworks are settled on-chain, we’ll be able to build rich economic graphs into social apps, online communities, and marketplaces. We’ll have a crypto-native version of Crunchbase for creators, communities, and all sorts of creative projects. At Mirror, we display these economic relationships for tokenized crowdfunds that have supported creative projects like novelsnewsletters and creator residencies.

Although there certainly is a risk of over-financializing relationships, many people have talked about the tight bonds developed through these economic graphs.

Another way NFTs can enable new types of relationships is through peer-to-peer credentialing. Today, the main source of credentialing comes from a college degree, what companies you worked at, social media clout, and references. These are inefficient forms of credentialing: they either aren’t very specific, or they cost a lot of time and energy to become legible (in the case of references).

But what if you could send a “Top Backend Engineer” NFT to the best backend engineers you’ve ever worked with? Or a “Very Helpful VC” NFT to a board member? The benefit of these badges being NFTs is that you can prove they came from a specific person and that it’s scarce (e.g. you’ve only ever given out three of these). I’d much rather hire someone based on referrals from people I respect than a fancy degree.

I believe NFTs like these will enable new types of relationship graphs which we can use to build better recommendation systems for job postings, content, dating apps, and much more.

Collecting

Whether it’s Beanie Babies or Pokemon cards, collecting taps into our innate desire for status and competition. For crypto projects, the key is to make collections legible. NBA Top Shot does this with their Showcase feature. They provide simple tools for creating collections and displaying them on your profile page:

One idea we’re excited about at Mirror is a “digital bookshelf.” What if instead of liking content, you could collect it by buying it at different price/rarity tiers (e.g., gold, silver, bronze) — and then display your collection on your public profile? NFTs enable creators to offer digital goods at different price points, as Chris Dixon mentioned in his post “NFTs and a Thousand True Fans,” which can lead to better monetization over time. 

In addition to helping creators improve how they monetize, which many have already talked about, I believe NFT collections will also usher in a curator economy.

What if Spotify listeners voted on playlists and top curators received a mix of cash and Spotify stock? What if Pinterest compensated top pinners the same way they compensate top engineers?

As more digital media becomes an NFT by default, I believe curators of top songs, videos, newsletters, podcasts, and more will be able to bundle their NFT collections and earn royalties based on licensing and engagement. An entirely new curator economy will be born.

Superpowers

A long time ago in a metaverse far away, the gaming industry realized one of the most effective ways to monetize is by giving users “superpowers.” These include things like skipping levels and improving abilities to win the game faster. 

Dating apps, which are consistently some of the highest grossing apps in the world, follow a similar approach. Superpowers in dating apps include more swipes and increased visibility, which leads to more matches. 

LinkedIn also follows this approach by giving premium subscribers more searches and advanced analytics, which can lead to finding a job faster or hiring the right candidate.

In crypto, NFTs can be awarded to power users to give them special capabilities like being a moderator in a popular community. So why do it as an NFT? The benefit is that the NFT owner can’t be rug pulled by a centralized entity. Instead, a smart contract will execute the terms based on independently verifiable logic. 

Depending on the governance mechanism, the community could decide who gets to be a moderator, what privileges they have, and what qualifies as grounds for removal. Instead of a centralized entity deciding who gets “superpowers” and who doesn’t, the community decides.

***

To summarize, cryptonetworks enable secure, transparent, internet-native economies. The fundamental unit of value in these economies are tokens. Fungible tokens can be used for money, equity, utility, and governance. Meanwhile, non-fungible tokens are digital assets that enable new business models and can give people a sense of identity, status, and belonging.

There are still challenges to realizing cryptoeconomies everywhere, such as high transaction fees and clunky onboarding, but over the past decade crypto has gone from a fringe activity to something that more institutions, technologists, and entrepreneurs have started to take more seriously.

In the previous decade, we’ve seen cryptocurrency, cryptofinance (DeFi), and cryptoart. Soon, we could have cryptosocial networks, cryptocommerce, cryptofirms, and more.

When thinking about how to design cryptoeconomies, I often think of this quote by Vitalik Buterin, cofounder of Ethereum: “To me, the goal of crypto was never to remove the need for all trust. Rather, the goal of crypto is to give people access to cryptographic and economic building blocks that give people more choice in whom to trust.”

The next decade will be about using these economic and cryptographic building blocks to design a new generation of transparent and equitable internet-native economies.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://www.fintechnews.org/designing-internet-native-economies-a-guide-to-crypto-tokens/

Continue Reading
Esports4 days ago

How to start a Private Queue in CS:GO

Esports3 days ago

Can You Play Diablo II: Resurrected Offline?

Esports5 days ago

Here are all of CS:GO’s Operation Riptide skins

Esports4 days ago

How to complete all week one missions in Operation Riptide

Esports3 days ago

Failed to Enter Game, Character Could Not be Found: How to Fix Error in Diablo II: Resurrected

Esports4 days ago

Valkyrae says YouTube is working on gifted members and a feature similar to Twitch Prime

Esports2 days ago

Fall Guys achieves Guinness World Record for most downloaded PlayStation Plus game ever

Esports4 days ago

Valkyrae says YouTube is working on gifted members and a feature similar to Twitch Prime

Esports4 days ago

Initial reactions to the Worlds 2021 group draw: How does each team stack up against the field?

Esports5 days ago

Pokémon UNITE APK and OBB download links for Android

Esports3 days ago

Microsoft’s The Initiative brings on Crystal Dynamics to help develop its Perfect Dark reboot

Esports4 days ago

CS:GO Riptide Case: Full List of New Skins

Esports3 days ago

How to check Diablo 2: Resurrected server status

Esports5 days ago

Some players unable to claim Pokémon UNITE mobile pre-registration rewards due to new error

Esports3 days ago

Best Stats for the Druid in Diablo II: Resurrected

Blockchain4 days ago

United States Infrastructure Bill Brings Cardano Billionaire to Washington.

Esports5 days ago

How to redeem Operation Riptide’s rewards in CS:GO

Energy5 days ago

Carbon Nanotubes Market size worth $ 20.31 Billion, Globally, by 2028 at 17.27% CAGR: Verified Market Research®

Cyber Security4 days ago

Apple bans Epic Games from App Store

Esports3 days ago

Failed to Enter Game, Character Could Not be Found: How to Fix Error in Diablo II: Resurrected

Trending