2023 Hong Kong Web3 Carnival highlights a bright industry outlook, possibly entering an era of application explosion

Author: Bing Venture

In the past week, the 2023 Hong Kong Web3 Carnival was grandly held at the Hong Kong Convention and Exhibition Centre, attracting over 10,000 Web3 practitioners from China and the broader Asia-Pacific region, including more than a hundred projects covering various sectors such as infrastructure, DeFi, NFT, social, and GameFi.

The Bing Ventures team, a pioneering crypto investment and research institution headquartered in Singapore, not only participated in this content-rich industry event but also collaborated with the innovative AI-driven blockchain aggregation media Followin to host a conference and cocktail party themed "Web3 Reimagined."

The event invited guest representatives from NFTScan, BuilderDAO, DeSynProtocol, Animoca Brands, GBV Capital, Hex Trust, Blockchain Alchemy Group, The Spartan Group, Alchemy Pay, Bitrise Capital, and BlockTempo. They shared exciting insights from different perspectives as entrepreneurs, VCs, and media representatives during two themed roundtable discussions, conveying the pulse of the industry and providing valuable takeaways for the audience.

Here are some highlights from the event.

Six Investment Themes Not to Miss in 2023

Bing Ventures partner Wayne delivered a keynote speech titled "Top Investment Themes for 2023" during the event. He pointed out that in the second half of 2023, technological innovation will be the main driving force behind market recovery. Based on this judgment, he introduced what they believe to be the six most promising investment themes for this year.

In the Web3 infrastructure and application sectors, Wayne noted that censorship resistance and multi-chain architecture will be core competitive advantages. "Specifically, we believe that areas such as social protocols, data storage projects, and wallet projects may see the emergence of more solutions that enhance censorship resistance and user privacy, such as IPFS-based distributed storage and multi-chain wallets. This trend aligns with the core philosophy of the Web3 ecosystem and is one of the important investment directions we believe in."

The second narrative Wayne shared was the integration of DeFi and TradFi, highlighting innovative products and directions to focus on, including innovations in collateral mechanisms like off-chain collateral, tokenization of real-world assets, synthetic assets, non-pegged decentralized stablecoins, smart beta, and factor investment products, as well as the Cosmos ecosystem.

When discussing the Ethereum scalability narrative, Wayne mentioned, "Modular hybrid public chains can not only integrate the technical advantages of different L1/L2s to enhance the performance of public chains but also meet the needs of various industries and application scenarios. Therefore, we believe that the future blockchain ecosystem will develop towards modular hybrid public chains and customized Layer 3s to accommodate the differentiation and personalization of user needs. Modular hybrid public chains may become the mainstream choice for the iteration of future Web3 applications."

Bing Ventures focuses on discovering Web3 entrepreneurs and early projects at the forefront of innovation trends, adopting a value investment methodology based on fundamentals and a research-driven investment strategy. Its investment portfolio covers multiple sectors, including DeFi, NFT, GameFi, DAO, and infrastructure.

In the next part of his presentation, Wayne succinctly shared Bing Ventures' insights on investment opportunities and specific development directions in sub-sectors such as DAO collaboration tools, "DID+Social," and GameFi. His keynote speech was insightful and comprehensive, laying a solid foundation for the subsequent discussions at the event.

Bright Prospects for Web3, Entering an Era of Application Explosion

In a roundtable discussion titled "Buidl the Future of Web3," hosted by Followin CBO Andrew Han, NFTScan co-founder Shier Han, BuilderDAO founder Niels Ma, DeSyn Protocol CEO Yuan Lin, Bitrise Capital co-founder Kevin Shao, and BlockTempo co-founder Wego C. shared their judgments and perceptions of the current industry environment as Web3 Builders.

Several guests expressed their recognition of the industry's prospects. BlockTempo co-founder Wego C. stated that although the industry experienced a winter last year, from the perspective of talent inflow and revenue, there has not been a significant slowdown in development, and it is still on the rise.

NFTScan co-founder Shier Han pointed out that as an aggregator of NFT infrastructure across 12 leading public chains such as Ethereum, BSC, and Arbitrum, despite a certain decline in the investment value, trading volume, and transaction count in the NFT market, the underlying data continues to grow. "The number of new NFT contracts added to the platform daily is around 4,000 to 5,000, with each contract corresponding to an NFT Collection, which can contain 5,000 to 10,000 or even more NFTs, resulting in over 2 million new NFT assets added daily."

When discussing the impact of enabling technologies like AI on Web3 sub-sectors, NFTScan co-founder Shier Han envisioned the possibility of using AI to organize objective factual data into low-cost, specialized formatted NFT data reports. DeSyn Protocol CEO Yuan Lin mentioned that there are already teams attempting to use ChatGPT to develop intelligent trading algorithms and strategies, but he has not yet seen related applications in other DeFi areas. However, he expressed great anticipation for breakthroughs and innovations in AI+DeFi in the future.

When discussing industry innovation and interesting projects, BuilderDAO founder Niels Ma introduced the decentralized data protocol db3, which aims to break the data silos in Web3 social networks, and Lens Protocol. He also mentioned that BuilderDAO will focus on providing modular DAO governance tools and will concentrate on incubating in the sectors they are interested in.

Regarding the future trends and advantageous sectors of Web3, NFTScan co-founder Shier Han is optimistic about Layer 3, decentralized stablecoins, and the ZKP ecosystem. He also predicts that there will be some dynamic NFTs emerging in the MA field, creating rare attributes and values that traditional worlds cannot produce based on new algorithms and game theory.

DeSyn Protocol CEO Yuan Lin predicted that Bitcoin may fluctuate between 30,000 and 50,000 in the second half of the year, and the rapid rebound of small-cap coins across various sectors presents investment opportunities for investors to prepare for. Bitrise Capital co-founder Kevin Shao stated that data shows long holders benefit more than short-term holders, and as an investment institution, they hope to provide longer-term support for promising sectors and projects, continuously delivering value to the industry.

Traditional Giants Will Enter Web3, Industry Development Will Be More Stable Under Regulatory Norms

In a roundtable discussion titled "What's Next for Digital Assets and Web3?" Blockchain Academy Group co-founder and CMO Yanyan Liang hosted a discussion with Animoca Brands' digital asset portfolio head Josh Du, GBV Capital partner Christian Ng, The Spartan Group investment manager Calvin Poon, Chiron Partners managing partner Albert Chang, Hex Trust platform and infrastructure head Aaron Baideme, and Alchemy Pay ecosystem head Robert McCracken, delving into various topics including risk management and regulatory trends.

Regarding risk management, the participants agreed that the various risk events of 2022 provided a valuable lesson for institutions, reminding them to deepen their due diligence. Hex Trust platform and infrastructure head Aaron Baideme mentioned that they focus more on enhancing risk management capabilities from a technical perspective, regardless of whether there is relevant regulation, and he believes this is the charm of blockchain; once the relevant algorithms are set, it can protect the interests of users without government oversight.

In terms of the advantages and disadvantages of DeFi vs. CeFi and TradFi entering the Web3 space, the participants believed that DeFi offers users more choices and is more inclusive, free from restrictions like bank account openings, and is rich in innovation. It will coexist alongside CeFi and shine in specific use cases, while DeFi can promote broader globalization in finance and assets, similar to what has been largely achieved in the transportation sector.

Regarding promising sub-sectors, several guests discussed opportunities in consumer applications, including custody solutions, GameFi, social media, and content creation. Animoca Brands' digital asset portfolio head Josh Du stated that Animoca is very focused on consumer applications, which include not only gaming but also fashion, music, and education.

For example, TiniTap, an educational application invested in by Animoca last year, enables teachers to monetize content from the moment courses are published through the integration with NFTs, rather than waiting for years, empowering both teachers and students. He also mentioned that creating AAA games takes a long time, and GameFi is still in its infancy, but as high-quality games gradually complete their initial development, we will see more high-quality GameFi projects enter the public eye.

Alchemy Pay ecosystem head Robert McCracken added that the entry and exit points for Web3 users, such as exchanges, will be an important sector to watch, as it relates to whether Web3 applications can truly reach the masses. Other guests noted that regardless of market conditions, DeFi protocols will continue to be used and attract inflows from investors seeking returns.

Regarding the outlook for digital assets in the next 3-5 years, the guests believe the market will experience a major bull market and a major bear market. In the absence of fundamental research, retail investors will continue to dominate market trends. Regulation will gradually come into place but will not be perfect. Blockchain technology will see more adoption, and more institutions will support crypto payments. More traditional giants will find their points of integration with blockchain technology and enter the Web3 space.

The Web3 Reimagined event concluded successfully after a lively cocktail party, becoming one of the high-quality peripheral activities during the Hong Kong Web3 Carnival. Bing Ventures also stated that it will promote industry dialogue and communication through more similar events in the future, as well as empower startups. Let us look forward to a brighter future for the industry!