Hackathon Review: Web 3 & AI Innovation Challenge

Author: Moledao

On September 10, 2023, at 9:30 AM Beijing time, the "Web 3 & AI Innovation Challenge"Hackathon was held in Singapore. This hackathon was hosted by Dev3 and Moledao, co-organized by C² Ventures and Techub News, with ChainCatcher as the media partner. The event aims to collaborate with outstanding Web3 and AGI developers from around the world to promote the large-scale application development of Web3 and AGI globally. The selected high-quality projects will share a prize pool worth $60,000!

We invited top institutions and project guests to the event, including Jack Kong, founder of Nano Labs; Blade Hu, investor at CEEX; Min from Foresight X; Bruce Lan, partner at Bing Ventures; and MP Edward Chen from Huobi Ventures. Let’s take a look back at this exciting hackathon.

Opening Speech

Speaker: Jack Kong (Founder of Nano Labs)

Speech Topic: Here comes the AI Singularity? Perfect Timing for Web3 Builders

Content Review:

The development of AI is leading the internet into a new stage of development at an unprecedented speed. From TikTok to Telegram, many AI applications have seen user growth far exceeding historical levels. As a new productive force, AI will significantly enhance work efficiency. At the same time, blockchain technology, as an important production relationship, will combine with AI to form Web3, ushering in a new era of the internet.

Compared to the Web2 era, Web3 has stronger network effects and advantages of open collaboration at all levels. In Web3, users can share the dividends of network growth. Moreover, Web3 emphasizes leveraging the strengths of each team member, making this distributed organizational form more suitable for the current situation. It can be seen that the growth rate of Web3 projects is unprecedented, with valuations reaching hundreds of millions of dollars in just a few months.

AI is productivity, blockchain is the production relationship, NFT is the interaction carrier, GameFi is the interactive form, and the metaverse is the expression form, together constituting the whole of Web3.

The development of Web3 can be divided into four stages:

The first stage is dominated by Bitcoin, represented by miners.

The second stage is dominated by Ethereum, represented by developers. They promote the further maturity of blockchain through innovations in finance, security, liquidity, and more.

The third stage is the native Web3 era, which emphasizes competition at the application layer and leans towards the construction of underlying infrastructure. This stage is of great significance for Chinese developers, providing them with more opportunities to contribute their value.

The fourth stage is the industrial Web3 era. The early main use of Alipay was online payments because banks were reluctant to delve into this area at that time. Similarly, the focus of Web3 innovation will gradually expand from the native field to traditional industries, completing the penetration from point to surface.

Looking back at history, the development of technology and industry often shows a spiral upward trend. Web3 stands at the forefront, and technological innovation and business models will continue to break our imagination. Let us maintain an open and inclusive mindset, confidently embrace opportunities. If Chinese developers seize this historical watershed, they may rewrite the global technological landscape once again.

Guest Speech

Speaker: Blade Hu (Partner at CEEX Labs)

Speech Topic: The Way Ahead for WAIGC

Content Review:

Currently, AI technology is developing rapidly, and global computing power is growing exponentially. This brings unprecedented application opportunities for AI. However, there is also a risk of capital monopolization, where AI may become the patent of a few tech companies, which is detrimental to the fair sharing of technology. To ensure that AI benefits society in an open and responsible manner, the concept of WAIGC has emerged. The core of WAIGC is to promote the development of AI towards decentralization and distribution.

To realize this concept, establishing an open and shared computing power infrastructure is crucial. This can break the monopoly of traditional data centers and allow different AI developers to share computing resources. For example, through blockchain protocols, decentralized computing power can be better scheduled for optimized allocation.

On the other hand, financial innovation can also support the realization of WAIGC. For instance, AI training requires a large amount of computing power, which is a scarce resource. It may be considered to use computing power as a new futures target, establishing a price index to attract more funds into this market. This would allow precious computing resources to be better allocated and circulated.

To form the WAIGC ecosystem, it is also necessary to further broaden the participants. Industry exchange activities can be held to enhance connections. Through investment incubation, we can help emerging AI companies grow. If all parties can work together, WAIGC is expected to promote the development of AI technology in a distributed manner, rather than being limited to a few companies.

CEEX Labs, as a deep investment incubation ecosystem platform, is building a project matrix around AIGC, aiming to support the distributed development of the AI field. One of CEEX Labs' core projects is the decentralized computing power network EMC, which aims to eliminate the bottlenecks of traditional centralized data centers and provide greater computing power support for AI researchers and enterprises. CEEX Labs and EMC jointly released the global AI computing power index formula during the Tokyo WebX conference in July 2023. This index will provide intuitive linear index support for the fluctuations of global AI computing power, helping investors better understand the development trends and opportunities in the AI computing power market. This innovative index is expected to become the standard in the global AI computing power field, providing more financial innovation support and further promoting the popularization and application of AI technology.

In addition to EMC, CEEX Labs is also advancing the computing power infrastructure project Innova. This project aims to build a more efficient and scalable computing power infrastructure to provide reliable computing resources for AI applications. Innova will support various AI workloads in the future, from machine learning to deep learning and more, thus promoting innovation and progress in AI technology.

The current world economy faces uncertainty, but WAIGC provides a way to activate the dynamics of the digital economy. CEEX Labs will continue to actively promote the development of the AI field, committed to providing the necessary technical and ecological foundation for the next step of distributed development of AI. We encourage more enterprises and innovators to join their ecosystem to jointly promote the innovation and application of AI technology, opening up broader prospects for the future development of AI.

Roundtable

The Security Path of Web3 Crypto Economy

Host: Laura, Partner from Cointime;

Guests:

Wang Hao, Investor from Matabank, has worked in the blockchain industry for 3 years and previously worked in traditional finance for over a decade;

TY, Investor from MetaTrust Labs, has been investing in the blockchain industry since 2016;

Stan, Investor from Go Plus, passionate about investments in the industry;

Jasper, Security Researcher from Beosin, specializes in ZK security and public chain security, as well as smart contract auditing.

Q1: Encryption is an important component of blockchain, ensuring the security of public and private keys. However, there are various security issues in on-chain Web 3 applications and decentralized applications in the blockchain industry. Let's discuss the reasons why this phenomenon occurs daily.
Wang Hao: I believe the main issues people encounter when entering the blockchain or cryptocurrency field are numerous hacker attacks and scams, as well as technical architecture and operational risks: operational risks are everyday problems we might face, such as forgetting passwords or having passwords stolen; the technical architecture needs improvement and requires significant infrastructure investment. The security risks of small coins are lower, but for top protocols like Ethereum, the cost of intrusion requires huge investments. So I think the cost of breaching a protocol determines its security.

Jasper: As a ZK encryption researcher, I can clearly tell everyone that attackers always find ways to bypass protocols and encryption principles. Although the encryption principles of blockchain are relatively solid, complex protocols can introduce some flaws. Developers may also make mistakes or leave backdoors. Blockchain is not 100% secure.

Q2: It is well known that each public chain is a dark forest. What are the security rules of the dark forest?

Wang Hao: I like the term "dark forest," as it resembles a game without rules. To survive here, one must be strong enough, but success also means becoming a target, which hinders the mass adoption of cryptocurrencies. Certain rules must be established to attract institutional funds into this market. Progress has been made in recent years, such as the EU's crypto asset regulations allowing institutions to participate. Some banks are also eager to enter. Singapore is working on tokenizing real-world assets (RWA). The Layer 0 project attempts to connect different financial institutions. The next step is to issue stablecoins, even central bank digital currencies. In short, rules need to be set to make this game fair for big players; otherwise, the crypto world is only suitable for "pioneers."

Stan: From the user's perspective, it's important to maintain a skeptical attitude and verify before trusting. Researching and learning on your own is crucial, especially in trading and the NFT space. For example, we see many users trading fake tokens because they look identical, but the contract addresses are different. This also frequently occurs in the NFT space, as NFTs may appear the same but are actually fake. Therefore, it is essential to check carefully and confirm before trading.

Jasper: I want to propose two principles. The first is that code can fail; the code in smart contracts executes automatically without external intervention. If you lose funds, it will be irreversible. Unless the police trace the hacker's identity, there is no way to reverse cryptocurrency transactions. Therefore, in the crypto space, code is law. The second is that verification is needed before trust. If you want to invest in a protocol, you must verify the smart contract code and the identity of the founders.

Q3: Regarding the need for careful confirmation before trading, I would like to ask about the various scams in the blockchain industry, such as fake airdrops, fake tokens, and fake liquidity, which lead to frequent security issues. Can you provide some advice on how to identify these scams and how to prevent them?

TY: I believe the key is to conduct some research. Many projects that have seen significant financial losses in recent years are actually centralized. Many so-called decentralized projects are not decentralized, and key decisions are controlled by a few individuals. So if you want to use such projects, you can use tools like ContractChecker to check the smart contracts for potential issues; when interacting with them, using tools like DefiSafety can also raise security awareness, as they can inform you of any security problems. Using some tools and conducting your own research can help mitigate these risks.

Jasper: I think open-source intelligence gathering is very important. This can be done from both on-chain and off-chain perspectives: off-chain can analyze community sentiment; if a project has a large number of active users, it may be more reliable, but this could also be an AI-generated illusion; thus, on-chain analysis is equally important. You can use tools like Dune.xyz to analyze blockchain activity or check if token trading activity is normal, looking for any abnormal pump or dump phenomena. By synthesizing this information, you can assess whether a project is reliable.

Q4: Besides the barbaric rules of the dark forest, larger-scale security incidents mainly involve contract security and social engineering attacks. For practitioners, how can we address these two significant vulnerabilities, and what should we pay attention to?

Jasper: For code review, I recommend conducting multiple rounds of reviews. Smart contract code is very complex, and even top experts may miss vulnerabilities. For example, platforms like Immunify or Code for Mina allow you to upload smart contracts for a group of professionals to review your code. Even if your protocol and smart contract code are secure, you still need to remain highly vigilant; there is no absolute security. Always maintain a high level of vigilance towards anything, and basic cybersecurity awareness is also very important.

Wang Hao: To add, besides technical issues, human factors are also worth paying attention to. I recommend watching the movie "Normal Events," as we can focus on more fundamental issues, such as why people lose money due to scams. Human greed is an irreducible problem, but we should be aware that we may encounter phishing, scams, and other cybersecurity issues. I recently read a book about the 1929 stock market crash and found many similarities with the current cryptocurrency market. Besides technology, human nature is also an important factor. History can provide us with more valuable insights, not just technology, because technology is constantly evolving, and we may not be the best candidates to keep up with the latest technologies, but maintaining a potential security awareness is universal.

Q5: As we discussed earlier, there is no absolutely secure system in the world, only a continuous improvement of security levels. The security events in the Web3 code and legal fields are very important. What does maturity in the industry's understanding and implementation of security look like?

Wang Hao: I believe this industry is relatively immature; the current maturity level is only about 10%. From the perspective of investment, the current level of security systems is as follows. First, the highest level is national security constructed by defense systems, built on a scale of trillions of dollars, with the largest investors being the United States and China, with the U.S. potentially two to three times that of China, followed by Russia and a few other countries. Second, financial institutions like JPMorgan, HSBC, and Citibank spend billions of dollars building security systems. Finally, there are consumer-related security systems, such as Amazon and Alibaba, which may spend hundreds of millions to billions on security. We are far from reaching this level. Most websites may only spend a few hundred dollars on security. A few may spend millions on security; this is my assessment of maturity dimensions and views.

How will AI and Web3 integrate?

Host: Zoie Zhang, Ambassador of Dev3 and Investment Partner at LK Ventures;

Guests:

Zixi: From Matrix Partners, responsible for blockchain investments;

Dennis: Chief Security Officer from Mind Network, focusing on data protection and privacy. Currently researching privacy computing;

Alex: Web3 Solutions Architect from Alibaba Cloud Singapore team;

Bruce: Partner from Bing Ventures, a former entrepreneur in the SaaS and data industry, who has worked at top VC firms in China, such as ZhenFund and Gaorong Capital.

Q1: In the past few years, how have AI and Web3 technologies mutually promoted and influenced each other? Do you think there is a complementary relationship between these two technologies, or do they participate more independently?

Alex: From the perspective of infrastructure providers, they are developing more independently. Taking Alibaba Cloud as an example, we have developed many technologies in AI over the past few years, especially large language models and AIGC. In Web3, we focus on underlying blockchain technology. Ant Group, a subsidiary of Alibaba, has made significant investments in Web3 technology and has developed many blockchain technologies applied in various fields, especially in traditional areas, such as applying blockchain technology in supply chain management to track food, making the supply chain transparent and ensuring the quality of food.

Dennis: From a technical perspective, I believe AI and Web3 have almost no common ground. However, I think AI directly benefits from the development of Web3 because they share a common demand for computing power or hash rate. The mining demand of blockchain has actually directly promoted the rapid development of GPUs. Over the past six to eight years, the development of GPUs has been very rapid. Therefore, AI directly benefits from this rapid development and has fueled the current wave of AI.

Zixi: I believe that from the dimensions of data models, computing power, and applications, AI and Web3 have mutual influence and promotion in these aspects. First, in terms of data: using blockchain technology for data labeling business models can distribute data from AI companies to downstream nodes, facilitating triangular trade and promoting the development of third-world countries. This business is naturally suitable for crypto, realizing a sharing economy. From the model perspective: through open-source model platforms, we can solve the creator economy issue, allowing model developers to share profits and achieve model shard storage and invocation through blockchain technology. In terms of computing power: centralized platforms are suitable for training large models, while for small and medium developers, training with a small amount of data and computing power is also feasible, utilizing the long-tail computing power of Web3 to support their needs. Finally, in terms of applications: for example, applying ChatGPT's financial model on options trading platforms to derive suitable buying and selling strategies through language models can provide epoch-making consumer-grade applications for ordinary users.

Q2: Regarding AI's demand for data and Web3's emphasis on data privacy, how can we balance the relationship between the two to ensure that AI's functionality is leveraged while protecting personal privacy?

Dennis: The privacy protection requirements of AI and Web3 are the same, although their driving forces differ. For AI, the driving force for privacy protection comes from regulation. We know that in March of this year, the Italian regulatory agency introduced GDPR and disabled ChatGPT for violating privacy protection. The issue with AI is that the data sources for model training are mostly illegal; they acquire data without the permission of data owners, which may infringe on the privacy of data owners. Therefore, AI needs to address this issue of private data. For Web3, the driving force for privacy protection comes from technology, as the content in Web3's blockchain is publicly transparent, and consensus is formed based on plaintext. However, plaintext cannot protect privacy. Therefore, in Web3, we need to encrypt the data; as long as the data can be transformed into ciphertext, we can achieve privacy protection. Our team has developed a Web3-based zero-trust data protection solution that can also be applied to AI. Through this protection, data owners can fully control their private data, and these data can be legally traded in Web3. In this case, data owners can profit from selling their private data, while model trainers can purchase data and obtain legal data licenses, thus resolving their regulatory issues. In this way, both AI and Web3 issues can be addressed.

Alex: As a cloud service provider, we have collaborated with many clients. For example, if a Chinese manufacturer wants to expand into overseas markets, they need to meet overseas compliance requirements. In this case, they usually take the following approach: first, they consult some legal institutions to understand which data can be made public. For some private data, they will first perform sensitivity processing, using technical means to transform sensitive data into a string of meaningless characters for data joint analysis with overseas applications. This is also one of the conventional data sensitivity processing methods.

Q3: Do you think AI can provide decision support for decentralized systems like DAOs? How do you think AI can integrate with Web3 to help make better decisions?

Dennis: The decision-making method of DAOs is to make final decisions through voting. However, the quality of each participant's decision varies. In this regard, AI can help voters analyze information, thereby improving the decision quality of each voter, which in turn helps DAOs achieve higher quality final decisions. So I believe AI can improve the decision quality of DAOs by assisting individuals.

Zixi: We previously invested in a project that simulated business, and at that time, we didn't think of using AI models, but looking back now, simulation business is very suitable for using AI models. For example, in the lending platform AAVE, the actual returns are related to your over-collateralization rate, how much you borrow, how much you deposit, how long you keep the interest, etc. In traditional simulations, there hasn't been a suitable model to estimate how to balance risk and return. However, using large models would make it much simpler.

Q4: If AI and Web3 continue to integrate, what new innovative applications do you think will emerge in the future?

Zixi: I believe that innovation in business models and technology is key. Traditional data labeling methods are inefficient, requiring local professional teams for labeling, and quality cannot be guaranteed. However, using blockchain can solve this problem. After the upstream accepts the order, there is a platform in the middle, and various rules and nodes downstream can be Web2 labeling companies, Web3 labeling companies, YGG, other gaming guilds, or even individual users. After everyone completes the labeling task, we evaluate together, rewarding those who perform well and punishing those who do poorly. Verification may need to be added in the middle. This will make the industry more efficient, flexible, and scalable.

Bruce: I will list some AI-integrated Web3 application areas. First is privacy AI, which protects users' private data through AI and provides valuable content from it; second is optimizing financial decisions and improving financial efficiency through AI; third is the combination of AI and DAO to enhance the decision-making and management capabilities of DAOs; fourth is the integration of AI with chatbots or trading bots to attract more users to participate in Web3 activities; fifth is the combination of AI and blockchain to improve communication efficiency between different blockchains; sixth is the integration of AI with decentralized identity (DID) to protect users' identity information; finally, the combination of AI with fully on-chain games FOG, generating characters through AI and integrating them with smart contracts and NFTs to enhance the value of the game.

From Web2 to Web3: Changing the Future of Chain Games

Host: Edward, Managing Partner from Huobi Ventures

Guests:

Ciara, Founder and Managing Partner from C² Ventures, focusing on early investments in the Web3 field;

Jadey, Partner from Baboon VC, focusing on early investments in large-scale application projects that combine Web2 and Web3;

Min, Partner from Foresight X, an accelerator of Foresight Ventures, with an asset scale of about $400 million;

Zoe, Partner from Axia8 Ventures, with investment sectors covering DeFi, GameFi, NFT, and more.

Q1: Can you recall some outstanding blockchain games from the past? What game trends do you think will become long-lasting or more successful business product forms in the future? You can mention any cases in Web3 or Web2.5.

Ciara: For long-lasting or more successful business product forms, I think it's hard to choose just one trend. In Web3 games, there is Axie Infinity, but due to its business model and token economic model sustainability issues, it hasn't achieved true success; however, the concept of "not just play to earn" has left a deep impression, as "earning" has proven unsuitable for all markets. I think PlayFi is also a trend; it relates to sports games, is easy to get into but hard to master, allowing participants to join the game with a low threshold, without having to pay, just for the fun of the game. When players truly master a certain aspect, more modes will be unlocked, and they can earn money through well-designed mechanisms. I believe this could be a more sustainable business model. Another trend is blockchain-based online gambling games. If designed properly, they can attract large-scale user adoption and provide users with sustainable economic models.

Zoe: Looking back at the mobile gaming market, social games have been one of the most successful types. I believe their success lies in the fact that as mobile games, they adopt a combination of free trials and play-to-earn models, allowing even non-crypto users to earn. Therefore, for long-term game projects, it should first be a highly playable and balanced social game, then adopt a reasonable token economic design, rather than simply profiting through token trading. I think the reason for the previous round's failures was that projects merely tokenized points in the game without considering the true utility of the tokens, leading to a lifespan of only six months. However, we also see some teams emerging from the last bear market, combining professional game design with Web3 experiences to create truly valuable token economics. I think the next round needs to increase the fun of the game to attract more casual players.

Q2: As experts in the gaming industry, what are your expectations for the future development trends of blockchain games and the entire gaming industry? What considerations do you have in terms of investment? How do you calculate and estimate the return on investment from game revenue streams or the tokens themselves?

Ciara: I believe that issuing tokens just for the sake of issuing them is unnecessary, as they need to have actual utility, and the market capability of the tokens differs from that of the product itself. Regarding investment and focus ratios, recent investments have been safety and learning-oriented, with varying ratios. Our team places great emphasis on due diligence to determine the value that equity and tokens can capture and requires clear statements in the signed documents. At the same time, we also need to clarify ratios, hoping that game tokens are actually used to incentivize the game itself. Therefore, we believe that the team's deep understanding of token economics is one of the key areas for conducting such due diligence.

Jadey: We do not invest in projects that issue tokens just for the sake of it. Issuing tokens must be meaningful to the game itself and cannot be merely for attention. For us, we mainly focus on three points: the experience and background of the team are very important; conducting due diligence to understand the background; whether the project truly requires the blockchain component. Currently, blockchain is just a buzzword, and many projects forcefully incorporate blockchain elements to attract investment. Therefore, we will look at whether the project genuinely needs blockchain, which is crucial for us.

Q3: Regarding marketing strategies, which methods do you think are more effective or reasonable, or does it depend on specific circumstances? As an investor, how do you judge whether their marketing plans are reasonable when communicating with product teams?

Jadey: My view is that there is no universal marketing strategy; it must be analyzed based on specific circumstances. I believe marketing must be organic; if it seems unrealistic or unnatural, people are generally less likely to participate. Moreover, marketing should be simple and clear. Therefore, we prefer strategies that transition from Web2 to Web2.5 to Web3. As long as people feel familiar, they are more likely to join without incurring extra costs to turn everything into a Web3 native experience. If they can access Web3-supported features through a Web2 platform, that is a successful case, as it eliminates the need for additional costs for education, adoption, and recruitment. I believe that when such situations arise, it will progress smoothly and increase mass adoption.

Min: This question is very practical. Before considering marketing strategies, it is essential to clarify the product's market positioning. If your positioning is in a crowded field, simply using Web2 methods to acquire users will not work; you must have differentiation. The Foresight team has rich experience in operating Web3 projects, and we also have resources in crypto media. Therefore, we can help formulate marketing strategies. These are ways we can assist project parties.

Q4: In Web2, there are already many very successful platforms, such as Steam. Do you think Web3 platforms have the potential to become very successful game distribution platforms, or do you think the power of Web2 will cover this part?

Zoe: In my view, building an attractive Web3 game traffic distribution platform is entirely possible. Let's review the data. We just talked about Arena; even with 25 million users, the peak number of concurrent users is only 150,000, which is just a small fraction. However, with the arrival of mass adoption, more and more individual traffic distribution platforms will emerge in every field. Just like I believe those token ranking websites were a form of traffic distribution for DeFi at the beginning of all these DeFi projects. So I think there will also be gamified distribution platforms.

Min: We are very optimistic about game distribution platforms. In fact, we have invested in a project in this area, which was our first round of investment. I believe the key difference between Web2 game platforms and Web3 game platforms is that Web2 platforms have relatively concentrated traffic. For example, super apps like Tencent and Douyin can distribute any content they want. But in the Web3 world, traffic is quite decentralized. Aside from a few major exchanges, no other platforms have very concentrated traffic. Therefore, to build a good Web3 game platform, content is really important. If top projects are launched on that platform, the attraction will follow. So first, there should be super games.

Ciara: We previously invested in Gala and Immutable. I think they have done a great job in understanding the definition of Web3 and Web3 native users. The definition of Web3 is about owning digital assets and having the ability to interconnect, allowing different assets to transfer across different games, and also having smart contracts with game logic. This is also one of the reasons why Vitalik likes blockchain, as he prefers game logic that has been altered by centralized entities. Considering all these Web3 native characteristics, the prospects for Web3 platforms in distribution are very optimistic. But it definitely needs the help of Web2, as this is not just about developers and capital; it also relates to how we acquire talent from Web2.

The Artistic Charm of the RWA Track

Host: Zoie Zhang, Ambassador of Dev3 and Investment Partner at LK Ventures;

Guests:

Calvin, Senior Partner from Plutus VC, a venture capital fund established in 2016 with $200 million;

Francis, Co-founder of Udaya, providing incubation platforms for various cryptocurrency projects;

Jaden, Investor from Flow Traders Capital, responsible for investments and partnerships in Asia.

Barry, Investment Manager from LIF, mainly focusing on early investments in Web3 and providing incubation and consulting services.

Q1: The core idea of RWA (Real World Assets) is to create a virtual investment tool linked to physical assets on the blockchain, such as real estate, precious metals, and artworks. Recently, RWA has gained significant momentum. What do you think are the main difficulties currently facing RWA? What are the main challenges in terms of regulation and law? Do you have any suggestions for addressing these challenges?

Calvin: RWA has enormous potential, but when it involves the securities field, it faces legal and regulatory challenges. Securities are the only investment field globally that is fully regulated, so obtaining licenses or undergoing regulation is one of the main challenges to entering this field. Of course, many people are trying to circumvent securities issues by launching NFTs, but this approach does not truly showcase the real value of RWA investment assets. Only with regulation can clear answers be provided; I believe this uncertainty is the biggest challenge.

Francis: I think RWA depends on how you define "assets." In the crypto industry, many developers have created numerous virtual assets, such as NFTs, but the intrinsic value of these assets is hard to clarify. First, most people cannot derive actual benefits from them; second, participants tend to overtrade, with prices determining asset value. However, in the real economy, the primary purpose of financial assets is to benefit the majority, such as currency facilitating the exchange of different physical goods, improving people's lives. Therefore, I believe the main challenge is not to overly financialize all assets but to focus on how to genuinely benefit people. One project we are discussing has the vision of "Bank the Unbanked." This is crucial for many who cannot access financial services, and such projects that create real value can sustain for 10 or 20 years.

Q2: After discussing regulatory aspects, what is the main value of converting real assets into RWA? What practical value do you think it brings during the tokenization of actual assets?

Francis: RWA indeed brings more audiences and increases people's access to global assets. I want to add that RWA can simplify and standardize the purchasing process, making it more convenient for general investors to invest in traditional financial markets. For example, many people want to trade stocks in the U.S., but opening a U.S. stock account requires extensive KYC and complex review processes, taking 3-4 weeks. However, tokenizing stocks would greatly lower the threshold and simplify restrictions for individual investors, which is part of financial marketization. Regardless of your nationality or geographical location, you can access the best global assets, aligning with the new lifestyle of digital nomads. Additionally, many individual investors have no access to quality bond prices or purchasing channels, which can yield annual returns of 3-8%. If these assets are standardized and can be exchanged using tokens, it will open the door for investors to access various fragmented and opaque financial products. These are the two major values that RWA can bring.

Q3: As we mentioned earlier about liquidity, does increasing liquidity also weaken speculative behavior, making the market more cyclical?

Jaden: From a trader's perspective, liquidity is a major attraction for trading algorithms. Higher liquidity leads to greater price volatility and trading volume, which is inevitable for capital markets. However, we need regulation to avoid any form of market manipulation. Product valuation is also a complex issue because we are still unfamiliar with this area. But I believe regulations will bring more certainty, and price fluctuations will not affect the potential of RWA. I think the main advantages lie in reducing transaction costs, eliminating intermediaries, and the possibilities of different asset combinations. If various assets are on-chain, it will be like Legos, recombining to create more possibilities. Currently, this is still quite difficult, but if they are on-chain and combined with existing DeFi applications, it will become very simple and standardized.

Q4: How to protect consumers' rights in RWA assets, and what are the risks associated with trading RWA and using RWA?

Barry: I believe that like current DeFi protocols, RWA also carries security risks. First, project parties may fail to maintain users' assets. For example, a certain P2P lending protocol lent money to a car manufacturer in Africa, and the borrower defaulted, resulting in a bad debt of $5 million. The project party could not control the collateral, ultimately making it difficult to recover user funds. Therefore, we need to focus on how to address such issues; currently, the regulatory and investor protection methods are still not mature enough.

Calvin: Many large companies are actively participating in this field. In Singapore, ADDX has already tokenized many funds, etc. These funds will not be misused because Singapore and Hong Kong are leading in this area. Singapore has issued 3 or 4 licenses, one of which was acquired by Formal Pay. In Hong Kong, three licenses have been issued, and they are working with lawyers to ensure that RWA or asset tokenization is absolutely reliable because the government will not allow you to have a tokenized securities license with loopholes, allowing people to misappropriate $2 million. If you want to raise funds without issuing tokens, in this case, you can categorize different types of game project shares and tokenize these shares for people to support your game or game studio, etc. I believe that in the next 5 to 10 years, safe tokenization will disrupt many markets and may cause some securities exchanges to lose business.

Project Roadshow

On September 10, 2023, we witnessed an exciting innovation event in Web3 & AI, where participants showcased their amazing ideas and technical prowess to judges and guests. Now, let’s relive the excitement of the event by reviewing two standout projects.

US3R Network is a blockchain application development and distribution platform aimed at developers and users. The project aims to solve the current difficulties of blockchain application development and low user numbers by optimizing user experience. The platform provides development tools, social features, etc., which can lower the development threshold while improving user access and experience. The project has recently won awards at several hackathons, and its subsequent development is worth looking forward to.

Gabby World is an AI-driven metaverse game and creation platform. The project utilizes blockchain and AI technology to build a virtual world driven by users' imagination, with all characters and logic generated by AI. The platform supports users in creating personalized characters, equipment, scenes, etc., through image generation and can interoperate with digital assets. This project has a vast imaginative space and playability, and its technical prototype has been completed, representing a highly innovative attempt in the metaverse field.

Gameland brings a revolutionary social data analysis solution to the gaming ecosystem.

Web3 Event is a global Web3 event platform aimed at mass adoption.

SourceDAO aims to break the traditional work model where employees are bound to companies and promote a more flexible and efficient new labor relationship for the Web3 industry based on DID and SBT. It has established a matching capability assessment system for them.

Smarter AA Wallet combines AI and Web3, further upgrading the current account abstraction (AA) and chain abstraction, making demand abstraction the ultimate way of Web3 interaction, which is more natural and efficient than the current Web2 interaction based on applications.

TikBridge is a decentralized full-chain bridging protocol that integrates cross-chain assets, trading, and aggregation management.

During the roadshow segment of this hackathon, we witnessed the creativity and efforts of the participants as they transformed their ideas and concepts into practical projects. These projects represent the latest achievements in innovation and technology, bringing us infinite possibilities for the integration of Web3 and AI.

This concludes the review of this hackathon. Thank you all for your support and attention.