Last week, The Kairon Labs team attended the HK Web 3 festival at the Hong Kong Convention and Exhibit Center. This event is jointly launched by Wanxiang Blockchain Lab and HashKey Group, and hosted by W3ME – showcasing the latest developments in the field of web 3.0 technologies. The aim is to bring together developers, entrepreneurs, investors, and other stakeholders in the industry to share ideas and explore the future of Web 3, and its current impact on our economy. It is a unique opportunity for attendees to learn about the latest trends and developments in Web 3.0.
The festival features a range of talks, pitch presentations, workshops, and panel discussions by industry experts, covering topics such as blockchain, decentralized finance (DeFi), and decentralized applications (dApps).
One of the panel discussions included some of the biggest liquidity providers in the industry, including John Cahill of Galaxy Digital, Xin Song of GSR Asia, Yoann Turpin of Wintermute, Amy Zhang of Fireblocks, and of course, Kairon Labs’ very own CTO and Co-Founder Mathias Beke. The panel discussed “Liquidity providers in a post-FTX world.”
FTX being one of the biggest exchanges in crypto, caused a huge uproar in the market after its collapse back in 2022. The effect is significant enough to create fear, mistrust, or FUD amongst traders, web 3 enthusiasts, and investors. A few months after the fact, we now face a new challenge: What changed and what needs to change in order to prevent the same thing from happening?
“It wasn’t a failure of blockchain technology, but it was more a failure of centralized finance… Credit risk is a big exposure that we have. Extension of credit lines is important, (as well as) access to credit” says Xin Song, General Manager of GSR, to which the audience agreed.
“We are seeing more exchanges trying to create transparency… We are getting much more assurance from exchanges compared to pre-FTX events, (as) counterparty risk is a big one we need to keep a close eye on,” assured Mathias, Co-founder of Kairon Labs.
“Proof of reserves post-FTX was a big thing… Exchanges previously were not so open to implementing changes in terms of solving off-exchange problems, but we are seeing a difference in that,” replied Amy Zhang of Fireblocks.
While the discussion continued, the panel also warned against services that pattern the same business model that FTX does. The market is also pushing toward transparency of transactions, strict regulations, and sanctions for all those who might commit a similar crime. Multiple organizations also took a step forward to show their keen support for change, starting with their own self-imposed audits and tracker nodes.
As Centralized Finance (CeFi) took a tumble over this event, more and more users shifted towards Decentralized Finance (DeFi) as an alternative. But though DeFi seems to promise a better solution ahead, we are still advised to start with caution.
“… What DeFi represents is a strong backbone of what crypto is about… The problem is there is no real framework so everybody can do what they want and, (we), as liquidity providers, can (only) ensure we are using protocols that are properly audited. We are still hesitant to deploy large amounts of money on bridges, as lack of framework means flaws are prevalent.” Mathias added.
“I think history has taught us to not put a lot of money in DeFi. It remains a dark horse. There are still not many DeFi users. (but) We see it as a positive thing in terms of financial inclusion.” says Yohann of Wintermute.
As the panel comes to a close, everyone agreed that though Web 3 is advancing at a rapid pace, with new technologies being introduced almost every week – the market is still mainly at a very early stage of development. Lots of changes are still needed in order to achieve the future that web3 envisions for everyone. A place where people are less scared and more secure with their transactions, and at the same time, assured that barriers to success, credit risk, and bank-imposed policies are no longer a hindrance to financial inclusion.
“I strongly believe in everything happening in the DeFi derivatives space. In general, in order for crypto to grow, we are in a chicken or egg situation. We need regulation to form a framework to allow the space to grow and bring in a new inflow of money” – Mathias Beke, Kairon Labs.
Credits: This entire panel discussion is covered by Bullish Team, and is sponsored by HashKey Pro.
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