Biweekly Report [1H September 2023]

5 min readSep 18, 2023

(Disclaimer: The contents are subject to change without prior notice, and under no circumstances can it be used as evidence of legal responsibility for investment results. The information provided here does not constitute investment advice. If you have any questions, please contact the Stackswap team.)

Hello Stackswap Community,

Korea Blockchain Week (KBW) and TOKEN2049 in Singapore were two events helds in September that were very useful opportunities for our team to directly experience and undrestand the current trneds in the blockchain field. Members of the Stackswap team participated in the TOKEN2049 events to better understand blockchain trends and the latest industry indicators, and to gain a deeper insight in the roles of Stacks, Bitcoins, and DEX development trends in the blockchain world.

These conferences are considered as some of the most important digital asset events in Asia and attract a wide range of vendors such as consulting firms, PR agenceis, BaaS providers, KYC/AML providers, cybersecurity companies, and exchanges/trading platforms.

What we observed was that these conferences were mainly about projects that received direct or indirect investment form large corporations or institutions rather than small companies providing blockchain-based solutions, along with heavy discussions about regulatory responses to the expansion of crypto projects.

Through networking, we had many comprehensive discussions on the direction and development of Stackswap’s DEX service. We were able to get ideas for a range of directions we could take for Stackswap, continuing to evolve our DEX by taking into account industry trends and user needs, imporving user expereince and strengthening security. Through more discussion and development, we want to take Stackswap to a future-oriented and innovative role in blockchain.

Sessions

Our team took part in and listened to leaders and experts in various sessions and divided up the information as follows:

L2-based infrastructure
DeFi & regulatory environment changes
Wallet & Web3
Real World Assets

L2–based infrastructure

L2 technology focuses on improving blockchain scalability and efficiency. For Ethereum, L2 scaling solutions Optimistic Rollups and ZK-Rollups are gaining attention, which will enable rapid large-scale smart contract execution and transaction processing. Additionally, other blockchain platforms are also utilizing L2 technology to solve scalability problems and improve the performance of distributed applications.

The expansion of L2, starting with Ethereum, focuses on the value of fast speed and user acquisition, and the expected effects of technology dominance are expected to increase. Layer 1 focuses on the essential value of blockchain, and L2-based technology is expected to provide a foundation for immediate implementation of various products and services.

DeFi and Regulations

DEXs, along with L2 technologies, will still be of utmost interest with recruitment of users and increase in usability. The value and evaluation of DEX in the crypto market is expected to increase, and the number of projects that are evolving from spot trading-oriented DEX in the existing AMM and Orderbook format to derivative DEX that supports options and futures is increasing. In addition, regulations are expected to occur due to the increase in users and transaction size, and as regulations are strengthened, it is expected that the existing DEX market share will expand compared to several new CEXs in the future. These regulations are emerging as an important issue in the DeFi ecosystem, indicating the need for technological developments to ensure KYC/AML compliance and the safety of assets.

Recently, risks have been highlighted due to the regulatory offensive against Binance, a major CEX, and the departure of senior executives from the exchange.
As of Sep 15, 2023, Binance’s trading volume was $4.49 billion, which is significantly lower than this year’s high of $28.35 billion on March 17, 2023.

Wallets and Web3

This section is based on the usability of the ideal cryptoasset wallet, which has the potential to attract mainstream Web 2.0 users to Web 3.0. Wallet services are based on usability, and the newly announced Telegram-type self-custodial cryptocurrency wallet will have an impact on the review of other fintech and social media’s transition to Web 3.0.

Web 3.0 combines blockchain and distributed web technologies to provide users with greater freedom and control. Self-managed wallets allow users to own their private keys and directly manage their assets, which is at the core of Web 3.0 and emphasizes the importance of privacy and user ownership. Additionally, Web 3.0 Wallets are being developed as powerful tools to simplify identity verification, digital asset management, and smart contract interactions.

Real World Assets (RWAs)

The tokenization of real-world assets through blockchain is bringing innovation in a variety of fields. This means representing assets such as real estate, works of art, stocks, and bonds as digital tokens on the blockchain, which allows asset ownership and transactions to be carried out efficiently. Blockchain increases the reliability and transparency of these tokenized assets, revolutionizing the financial system and providing more investment options for individual investors.

Real-world assets (RWAs) are tokenized on the blockchain to become a sustainable and reliable source of yield in DeFi, thereby bridging the gap between traditional and decentralized financial systems; In addition, it encompasses both material and intangible assets, providing accessible opportunities to a new investor base, and there are several trends and trends that are developing based on the macro environment.