The Rise of the East and the Fall of the West: The Turning Point in the Fate of Asian Builders

Written by: Chris, COO of @ Chainbase

Original Title: 《The Crypto Landscape Tilts East as Asia's Builders Seize Its Destiny》

From automobiles to smartphones, from chips to manufacturing, Asia's influence on the global economy and innovation stage cannot be ignored. In the development of the internet, the West dominated Web1, China defined Web2, and after more than a decade of development, the turning point between East and West seems to have arrived at Web3.

Cryptographic technology has been global from the very beginning. As a project rooted in the East, Chainbase has always aimed to face its development with a global perspective. However, the real question is, what role will the East play in the next crypto cycle? How should we position ourselves?

Based on this idea, over the past few months, Chainbase has frequently participated in various crypto events and developer gatherings in Hong Kong, Vietnam, Japan, Hangzhou, Shanghai, Montenegro, Stanford, and other places. We have tried to determine our position through these activities—during this process, thoughts about the positioning of the East have gradually taken shape.

Viewing the Industry Landscape from a Developer's Perspective

The sudden collapse of SVB and the tightening of U.S. regulations are two key events in the crypto world in the first half of 2023. Although Silicon Valley Bank does not seem to be directly linked to cryptocurrencies, it is essential to recognize that a significant amount of fiat funds and crypto startup capital flowed into Silicon Valley Bank through SVB.

To curb the spread of risk, regulators launched "Operation Chokepoint 2.0," shutting down two banks that had shown friendliness toward the crypto world—Silvergate Bank and Signature Bank. These banks served major centralized exchanges, lending platforms, and other key institutions. However, as major clients like FTX and Genesis collapsed one after another, these banks ultimately became victims in the wave of bank runs.

More importantly, this may just be the first domino to fall, indicating a crisis of trust in the traditional banking system.

In the short term, this could severely impact the liquidity of cryptocurrencies. But in the long run, it may promote broader application of blockchain networks across the market.

Starting in the second quarter of this year, U.S. regulators began directly targeting well-known figures in the industry and the CEOs of various projects, from Justin Sun to CZ, from Binance to Coinbase. No one was spared. The "Economic Report" also denied the value proposition of cryptocurrencies, explicitly warning that the growing presence of cryptocurrencies could pose instability risks to the U.S. financial system. Additionally, U.S. Senator Cynthia Lummis emphasized in her latest Twitter post that the recent favorable ruling for XRP by Judge Analisa Torres is significant. She pointed out that this decision highlights the urgent need for Congress to establish a comprehensive and clear regulatory framework for cryptocurrencies.

The anti-crypto movement that has erupted in the West has created opportunities for the East. As Coinbase CEO Brian Armstrong stated, "Regulatory uncertainty and anti-crypto sentiment are jeopardizing the U.S.'s status as a center for crypto development."

While the U.S. remains home to many crypto users, brilliant developers, and projects, they may reconsider their business focus areas and corresponding resource allocations.

Overall, the entire industry landscape is undergoing a dramatic change, with market dominance shifting from West to East.

Facts speak louder than words. By the end of 2022, there were 425 million cryptocurrency users globally (compared to 295 million in 2021). Among them, Asia had 260 million users (60%), North America had 54 million, Africa had 30 million, and Europe had 31 million.

"The sun rises in the East" sounds very fitting. Each segment of the Asian market has its unique advantages and promotes growth through targeted policies.

Beyond macro data, Asian countries also show tremendous opportunities at the micro level. According to Chainalysis's "2022 Cryptocurrency Adoption Distribution Map," based on individual trading activity, 9 out of 20 countries are from Asia. Interestingly, Vietnam ranks first, with the countries showing high data being mostly middle to low-income, including five Southeast Asian countries. The U.S. and the U.K. are the only representatives from high-income countries.

These numbers, including usage rates, user counts, and activity, all tell us that the Asian market may become the center of the global crypto industry.

In fact, from the perspective of CEX trading, ownership, and mining, Asia has already dominated the global cryptocurrency market since the last cycle:

Among the top 5 CEXs, 3 are from China.

In terms of 24-hour trading volume, the top 3 are all Asian.

The trading volume in East Asia exceeds $750 billion, led by China, South Korea, and Japan.

Moreover, although leading in trading, each Asian market has its unique style:

South Korea is the most active country in East Asia for CEX trading, thanks to crypto stars like DK, with many accounts actively trading.

Japan's thriving IP culture has cultivated a group of NFT and gaming enthusiasts, and the country's well-known high housing prices, high unemployment rates, and prolonged economic stagnation have led the younger generation to view cryptocurrencies as an alternative investment asset, which has also driven DeFi activity in East Asia. South Korea and Japan have a strong grassroots base of crypto users and investors.

Another dominant force that cannot be ignored is China. Despite the policy ban on crypto activities, China still leads globally in metrics such as trading volume, wallet addresses, and end-users. Coupled with Hong Kong's open attitude, this further expands China's influence in the industry. Hong Kong has indeed taken a proactive stance on cryptocurrency regulation, especially with its lenient regulations and issuance of stablecoins.

Southeast Asia and South Asia are also focal regions.

India, with the largest population in the world and the second-largest developer talent pool, is a key cryptocurrency market. The lack of regulation opens up significant space for rapid growth in cryptocurrencies. There is enormous potential for both regulatory arbitrage and innovation.

In Southeast Asia, Singapore stands out, aspiring to become a cryptocurrency hub. In recent years, the government has been working to attract crypto projects and executives to relocate their headquarters to Singapore. However, the results have been mixed—while trading volume and capital flows have increased, there has been no significant innovation or benefits. Meanwhile, the shockwaves from Terra and FTX have also dealt a heavy blow to retail investors and institutions.

However, the prospects for cryptocurrencies in other parts of Asia are very bright.

In the 2022 Global Crypto Index Rankings (Source: Chainanalysis), Vietnam, the Philippines, and India occupy 3 of the top 5 spots. Vietnam and India lead in multiple subcategories.

This is not a coincidence. Many reports indicate that these Southeast Asian countries, along with India, dominate the data in the crypto world.

Overall, the unique conditions in Southeast Asia make it a fertile ground for the proliferation of cryptocurrencies: political fragmentation, a young population, unstable currencies, and trade integration create an ideal environment for the industry's vigorous development. Additionally, the single income structure provides the public with incentives for "working to earn" and "gaming to earn," leveraging the advantage of abundant local user resources eager to profit.

Of course, governments also hope that cryptocurrencies can address some of the dilemmas in the traditional financial sector. Looking back at South America and Africa, cryptocurrencies have been seen as a viable case for payment and value storage in developing countries. We believe Southeast Asia will also follow a similar path.

This is why the governments of Indonesia, Vietnam, and Thailand take the cryptocurrency industry seriously and actively formulate clear regulatory provisions. This provides a relatively healthy development space for various dApps like Gamefi, officially licensed CEXs, and retail investors, and establishes a good educational environment.

Asia's increasingly prominent position in the cryptocurrency field is also reflected in its strong practitioner base and potential user penetration rates.

The Situation of Developers in Asia

As an emerging force in the Web2 field, Chinese developers will undoubtedly play a decisive role in the upcoming technological revolution, especially in the crypto era.

According to estimates from several Chinese Web3 developer communities, there are currently about 300,000 to 400,000 Web3 developers in China. However, at the same time, the total number of Chinese developers on GitHub has long exceeded 8 million! Most of them have over 2 years of development experience and are proficient in languages like Java and Python.

In contrast, the penetration rate of Web3 developers in China remains quite low, and the situation in other Asian countries is likely similar.

Comparing these numbers with the total number of developers in the industry, as of July 2023, among approximately 190,000 cryptocurrency practitioners globally, about 40% are located in Asia, with India and China ranking first and second.

However, when analyzing the background of these 190,000 practitioners, you will find that about 60% are engaged in CEX and cryptocurrency financial services, with relatively few actually involved in development work.

The decline in the number of active developers is also quite telling. In the past year, the number of monthly active developers has dropped from 27,000 to 21,000, a decrease of 22%.

At the same time, if you take a closer look at the profile of the developer community, you will notice a clear divide. Those who entered the crypto world after June 2022 have seen a 48% attrition rate.

During this period, the number of developers with 1-2 years of experience grew from 3.7K to 5.5K, while the number of 'veterans' with over 2 years of experience remained around 8K, which represents the foundational numbers of global cryptocurrency developers.

A simple arithmetic question arises: even if only 1% of Chinese and Indian developers enter Web3, the above number would immediately double, indicating that—there is tremendous potential for growth in project and on-chain data requests.

It is precisely because the Asian market is so vast and rich in development talent that the industry's primary task should be to better understand Asian developers and unleash their full potential.

As a Web3 data infrastructure platform built for developers, Chainbase has conducted several activities in Southeast Asia, Japan, Hong Kong, and mainland China over the past four months and has established collaborations with top developers in Silicon Valley.

Our goals remain consistent: first, to address the practical problems developers encounter when building projects. Second, to leverage the developer communities in each region to attract more talented builders to drive the industry's development.

We believe that by addressing developers' current needs and expanding the funnel, we can make the ecosystem more prosperous.

Real Insights from Events and Developers

Since the Hong Kong Web3 conference in April, reflecting on the events we participated in across Asia, several clear facts have emerged:

1. First, developers in each region have different characteristics and needs.

In Hong Kong and Singapore, we see more fintech, RWA, and trading talent; Southeast Asia tends to focus on fast payments and the gaming industry; Japan leans towards content-centric vertical markets; mainland China has balanced capabilities, with skilled platform builders, infrastructure engineers, and dApp developers.

The key is to recognize the diversity across Asia and tailor promotional activities accordingly. One solution does not fit all situations. We must understand each community according to its own conditions.

Interestingly, we found a commonality: most developers do not seek answers through social media and live events but prefer to stay at home and search online, and they are not fond of public speaking. I can confidently say that at least 90% of them prefer to seek help through community discussions, online tutorials, and self-research.

2. Second, Asian developers tend to be very pragmatic—focusing on solving real-world problems rather than getting caught up in narratives and hype.

This illustrates a shared pragmatic characteristic among Asian developers. Given their excellent engineering skills and ability to build functional code, this makes sense: they are doers rather than talkers.

Western projects often rely on marketing and grand visions, while Asian developers are modest and focused on delivering usable products; we should appreciate their humility. However, this also means that if you want to gain their recognition, you should help them solve practical problems and improve their workflows rather than relying on empty talk.

3. Third, Asian developers have an extremely strong work ethic and sense of responsibility.

Asian developers embody a strong spirit of "dare to think and act." It is common for them to dedicate over 70 hours a week to work while handling 3 projects, and if possible, they are even willing to put in more.

At the same time, they provide high-quality technology at very reasonable prices. Self-motivation, technical ability, and value realization are integrated in them, making Asian tech talent truly unique.

These summaries are not based on conjecture. During the events, we had the opportunity to engage in in-depth conversations with over 100 Asian developers, conducting one-on-one dialogues.

This allowed us to connect with many talented engineers, developers transitioning from Web2 to Web3, local projects, veterans who have experienced multiple crypto cycles, and newcomers just entering Web3… covering almost all fields.

These candid exchanges have been invaluable for understanding the diverse needs and perspectives of the Asian developer community. By directly listening to individual voices, we gained many valuable insights that guide us in refining our promotional activities and strengthening connections between each market.

I am happy to share some representative insights from these builders, hoping to inspire everyone.

1. A Gamefi Product Manager @ HK: 1.7 billion players, annual revenue of $72 billion, MMORPG + casual games

Asia is the largest gaming market in the world, with 1.7 billion players, accounting for 55% of the global total, generating $72 billion in revenue annually. More importantly, it is also full of growth potential. Moreover, there are clear game types suitable for Web3: MMORPGs (ownership value) and casual games (lightweight).

In addition, as a product manager for Web3 games, we must identify native game types for Web3, such as games that are entirely based on blockchain.

This not only places game assets on-chain but also puts game logic and governance on-chain. By leveraging the inherent advantages of Web3 networks, we can achieve significant progress in on-chain data richness and scalability.

2. DeFi Product Manager @ HK: Optimistic about Hong Kong, RWA, and DeFi

As Asia's financial center, Hong Kong has a deep talent pool in financial product development and distribution channels.

To create engaging DeFi products, we need to seamlessly integrate native crypto innovations with proven real-world product logic.

Our goal is to genuinely bring blockchain to the masses by addressing unmet needs in the real world.

3. Local Layer1 CTO @ HCMC: "Dare to Act" Culture + Abundant Developers

Vietnam has the strongest developer community in Southeast Asia for several reasons:

a) Developers exhibit an unparalleled "dare to act" attitude, continuously solving challenges and building innovative solutions. They bring an entrepreneurial spirit;

b) The developer community remains closely connected and developer-centric. Everyone unites, understands each other easily, and forms consensus and collaboration;

c) Developers here are reasonably priced, with those having 2 years of experience earning about $15-20K annually. They also possess sufficient English reading and writing skills.

4. Web2.5 Platform CPO @ HCMC: Globalization + Regulatory Arbitrage Opportunities

Vietnam has a large diaspora in Europe, giving it a unique advantage in building global teams.

At the same time, Vietnam faces potential innovation opportunities in the traditional financial sector—from cross-border transactions to inclusive finance.

A global team with strong Vietnamese representation and local funding offers significant advantages for many projects with third-world backgrounds.

5. Leading Infrastructure Project @ Shanghai: Well-Trained, Experienced Developer Hub

Undoubtedly, Chinese tech giants like Alibaba, Tencent, and Huawei have nurtured a large number of internet, cloud computing, and infrastructure developers. They have handled transaction peaks of 2 million per second during events like the Spring Festival Gala and Double Eleven.

Chinese developers initially aim to build operating systems with high concurrency, high availability, and high security, directly addressing the crypto triangle dilemma (also high concurrency, high availability, and high security), which is an impressive exploration.

Any project that can assemble a strong Chinese engineering team has a significant advantage in solving development issues.

6. Web2 Game Studio @ Shanghai: Oversupply of Gaming Talent in a $20 Billion Market

Shanghai has decades of experience across PC, web, mobile, and esports games, fostering an unparalleled gaming ecosystem. Game development has birthed numerous unicorn companies such as 37Games, Shanda Games, Giant Network, miHoYo, Lilith Games, and Bilibili. In 2022, China's gaming revenue exceeded $20 billion, solidifying its global leadership in game creation, publishing, and marketing.

Looking ahead, Shanghai is expected to lead the transition from Web2 to Web3. A wave of blockchain games and ongoing hackathons will drive innovation and supply in Web3.

7. Layer1 Technical Consultant @ Hangzhou: Focused on Public Chains and Global Reach

Chinese developers often perform excellently in practical work but frequently lag in actively communicating with overseas teams and mastering PMF. Therefore, establishing technical bridges is crucial.

For overseas markets, most public chains lack sustained development support, which is an area where China can provide immense talent value.

However, Chinese developers must communicate in terms that public chains prefer to access resources and funding. Bridging this communication gap represents the greatest opportunity for Chinese developers to engage with global technological innovation.

8. Developer Community @ Hangzhou: Recruiting Developers from Internet Giants

The most direct reason for establishing a developer community in Hangzhou is the presence of hundreds of thousands of experienced developers from the internet era.

They are well-educated, eager to learn, technically skilled, experienced, and possess a deep understanding of technology and finance, even having an international perspective and willingness.

From a Web3 perspective, Hangzhou is also a pioneer in cloud mining, infrastructure, and security projects. Hangzhou and Shenzhen should become the frontlines of China's Web3 evolution.

9. ZK Engineer @ Osaka: Limited Supply of Developers and Engineers + Agency Culture

As a Chinese engineer in Japan, I have witnessed the long-standing closed nature of this country's cultural background and the openness to discovering new opportunities. Due to missing the internet boom, Japan has a limited supply of its own engineers, but the public has a high recognition in finance, gaming, and other areas, which is a significant advantage for acquiring users in key verticals.

Additionally, Japan's long-standing "agency" and "resale" culture means that local partners are crucial for market expansion and are the best channels for trust. Furthermore, the widespread open-mindedness actively welcomes overseas projects and talent, creating a positive feedback loop.

10. Web3 Lab of Mainstream Japanese Companies @ Osaka: ¥100 Trillion Stimulus + Digital Yen

The Japanese government's support for the blockchain industry is unprecedented, with an economic stimulus plan reaching ¥100 trillion, with cryptocurrencies as a key focus area.

The Prime Minister announced the establishment of a digital agency to promote digital transformation, with cryptocurrencies as a top priority. The Liberal Democratic Party of Japan released a Web3 white paper outlining tax reforms and comprehensive reductions in regulations across departments, with all mainstream Japanese companies actively investing in Web3 and establishing Web3 departments.

Developers vs. Core Ecosystem

Public chains are another crucial ecological role besides developers. As a company providing infrastructure for over a dozen chains, Chainbase maintains frequent dialogues and multifaceted partnerships with these chains. Typically, public chains face the following challenges:

1. How to attract end-users before attracting the most experienced developers and high-level projects?

2. Most existing developers tend to shuttle between different chains; how to attract more newcomers?

3. While there is already a strong focus on Asia, especially on Chinese developers, how to effectively reach them?

In the face of these challenges, when we advocate for Asian developers, our trump card is:

1. Millions of Asian developers have yet to step into Web3! They need better educational products.

2. Foundations can adopt more grounded guidance methods to attract developers as early mentors. The key is to proactively connect with developers (online, offline, or both).

3. Relying solely on BD and technical ambassadors is not enough. Foundations should collaborate with local mature projects to provide fertile ground for the growth of early-stage developers.

As I ponder these issues, Chainbase's mission and values always resonate in my mind. As a Web3 data infrastructure, our goal is to make on-chain data open, usable, and accessible, providing a developer-friendly experience for both Web2 and Web3.

In our view, Web3 represents a revolution in data sovereignty and open data platforms—in the future, developers will be both data producers and data consumers. We hope to:

• Unveil the mysteries of on-chain data by providing structured data services to developers.

• Enhance efficiency by seamlessly integrating on-chain data into actual development workflows through building data platforms.

• Nurture the Web3 developer ecosystem through community gatherings, knowledge sharing, and developer support.

Chainbase's Developer Community Roadmap for the Next 12 Months

As a data infrastructure platform, Chainbase aims to eliminate the barriers developers face, allowing them to create freely and focus on building.

We believe that with the right tools in place, Asia's rich developer talent can build the next generation of world-class crypto applications. We are committed to providing this infrastructure.

By empowering developers across Asia, Chainbase has made significant progress and achieved concrete results beneficial to developers.

We have a 12-month plan to grow alongside developers and the community, and Chainbase sincerely invites developers to participate! What we are currently building includes:

Progress and Achievements

1. Processed over 300 high-capacity datasets, making them directly usable;
2. Real-time data response, solving data latency issues caused by blockchain reorganization;
3. Complete historical raw data, abstract data, and smart contract data, enabling data synchronization;
4. Web3 API, supporting all data from major EVM chains! Response time is sub-second;
5. Webhook functionality, real-time data subscription and data push notifications, scalable commercial-grade deployment;
6. Providing 99.99% availability subgraph hosting services, with indexing speeds more than twice the industry average;

And more new developments to explore!

12-Month Plan - Targeting Developers and the Community

1. View our platform from a broader perspective, building it into a hub for Asian developers;
2. Firmly uphold three core value propositions: open, fast, and reliable;
3. Actively share our standardized datasets or resources provided by other partners;
4. Gather high-energy developers, host vertical industry hackathons and a series of workshops, maximizing rewards for developers' building achievements.

We look forward to an open, collaborative Web3 world, where data will flow freely between blockchains, distributed applications, developers, and users.

Join us in driving the Web3 data revolution together!