How would you describe the present outlook for blockchain and cryptocurrencies, compared with 2018?
The promises and claims made in 2018 have transpired as true, yet the timescales quoted then were entirely wrong. Many critics that focused on crypto as being a fad were also proved incorrect, not because we're in a world where every application touches blockchain, but because we can see real use cases pushing through as well as Bitcoin being here to stay.
I believe when it comes to demand for tokens, reliance will shift away from the communities that have been focused on capital appreciation of the tokens themselves – who have been instrumental in supporting and growing today’s crypto economy – towards those that drive the space forward: the users of blockchain products. Demand for tokens of applications from users will be the next step on the ladder.
How quickly do you foresee this shift kicking in – and how available are customer-oriented retail products already?
There is still a lack of usable retail products on the market for customers but there’s no doubt it’s being developed. Exchange platforms are difficult to use, which a trader can easily navigate, but less so a layperson. Most retail products to date have focused on applications allowing tokens to be traded, staked, loaned, and the like. While these may be new and innovative financial products, they will eventually become the basic infrastructure that will provide the foundations for the new digital economy. In many cases, consumer interactions involve a wallet and the requirement to exchange fiat for crypto in the first place, which is subject to regulations in a number of key jurisdictions, such as the UK and most countries in Europe. Yet other countries such as the US have not yet fully committed to their regulatory framework, making the development of new applications for different products carry higher risk until clarity is gained on their positions.
Large and corporate businesses with significant customer bases that have in-house developer teams and the means to take advantage of blockchain technology will catalyse the network effect. In my view, we are now at the beginning of an important mainstream lifecycle stage of the technology, which is where we thought we were back in 2018. There has been no shortage of problems in the interim, such as the failure of the Terra network, Three Arrows, Celsius and most recently FTX, that have and will be a catalyst for regulators worldwide to take notice of the space and implement protectionary frameworks. We thought this was coming four years ago, but we’re only seeing momentum now – and it’s moving quickly as the space begins to mature.
Educating the wider community about blockchain encourages both adoption and innovation.How did global events over the last four years, including the COVID-19 pandemic, impact the blockchain and crypto landscapes? And in what ways has Coinweb continued to drive its mission towards ‘horizontal innovation’ during this time?
At the heart of the blockchain is the concept of decentralisation, therefore the practice of developers working remotely, is commonplace – thus not much has changed through the pandemic. However, since people restricted at home typically turned to products such as Netflix, Peloton, and online gaming, the demand for crypto platforms surged in line with the mainstream global population toward digital payment systems. The inbound investment drove innovation in blockchain and in part, created another bubble that started to burst along with traditional markets in January 2022.
In terms of horizontal innovation, there was a mad rush in 2018 to become the next ‘Ethereum killer.’ Now those same projects are talking about the need for interoperability – building across different chains and connecting them together, not just so that liquidity locked in individual layer 1 blockchains acting as silos can flow freely, but also so that the respective communities could interact with one another. This is what we at Coinweb predicted as the correct approach in 2018, whereby we built infrastructure for technology horizontally across chains. In fact, most projects in today’s market now talk about the necessity for interoperability that is horizontal, instead of building vertically in silos.
Coinweb and its sister company, Onramp already have seven digital asset consent and licenses, and even launched three new core products. How will these help customers use blockchain technology?
These products are a turnkey solution to address the key pain points that hinder usable blockchain technology.
In 2018, we struggled to explain to investors how problems that had not yet occurred in blockchain were solvable in the future via our core protocol. If you wait for the problem to occur, you’re too late; so we built ahead and continued to build the core and usable products on top of the component working parts in modular form. In 2020, we shipped two DeFi platforms using Coinweb’s protocol, which are able to broadcast transactional data to multiple underlying chains, utilising a stable token. These decentralised applications (dApps) have sold in excess of $200 million USD of their token and have run millions of transactions, responsible at one point for 13% of all traffic on the Bitcoin Cash network and 6% of all traffic on the Elrond network. That was proof of concept – and then the problems we foresaw were going to happen, happened. So, we are shipping a number of retail and B2B products in November 2022 that solve key problems for users, including cross-chain tokenization, customizable wallets, world-wide licence coverage, multiple fiat on and off ramping gateways, cross-chain transaction routing, and an integrated marketplace that makes the entire suite able to provide real utility to both our clients and end consumers.
On the cross-chain tokenization platform, you can design, set up and issue tokens, decide on the liquidity structure to support them and choose multiple broadcast chains, with the additional option to wrap down to layer 1 token via our trustless native bridges. Importantly we also give the option to abstract away the gas fees, so users do not need to hold a separate balance of the native token to pay the fees in, they only need to hold a balance of the token they are transacting in. You can then white label a wallet, connect fiat rails that are covered by multiple licences, and store the tokens within it. Movements of the tokens are subject to a seamless routing system that uses cross-chain Reactive Smart Contracts to monitor the underlying layer 1 chain’s KPIs, so that the end user does not experience a spike in gas fees, a slowing of the network or an outright outage of a blockchain - making for a smooth, predictable user experience. The goal is to avoid all of these regular problems on many of the best-known chains, such as Solana, today. Finally, you can list the token on the marketplace for public trading outside of the Coinweb-issued wallets.
You were recently at Token2049 London – where you launched these products – and will also be present at Digital Assets Week London, Crypto AM Summit and Awards and Global Blockchain Expo in Olympia London. Why are these events important?
Token2049 is one of the premier blockchain events in the world, while each of the exciting upcoming events on our roadmap also gives us the exciting opportunity to share new developments that we’ve achieved on about the technology and explain why it is essential. Educating the wider community about blockchain encourages both adoption and innovation, all things that we are deeply committed to doing.
More information about Coinweb is available at coinweb.io