PANews_

Author: Lars, Director of Research at The Block

Compiled by Jordan, PANews

For the encryption industry, the just past September, due to the Rebound of BTC price, the market seems to be performing well, but most indicators have actually declined. This article will use 11 charts to interpret the encryption market situation of the past month.

In September, the overall on-chain total transaction volume of BTC and ETH fell by 13%, falling to $328 billion, with BTC's adjusted on-chain transaction volume falling by 10.2% and ETH's falling by 17.8%.

2. After the September adjustment, the on-chain trading volume of stablecoins fell by 30.8% to 832 billion US dollars, and the issuance supply of stablecoins rose by 1.3% to 150.4 billion US dollars, with USDT and USDC accounting for 78.3% and 17.6% of the market share, respectively.

3. BTCMiner income continued to fall in September, dropping to $815 million, a fall of 4.2%. In addition, ETH stake income also fell by 4%, falling to $2.094 billion.

4. In September, the Ethereum network burned a total of 26,874 ETH, worth about $68.2 million. Data shows that since the implementation of EIP-1559 in early August 2021, a total of approximately 4.39 million ETH has been burned on the Ethereum network, worth about $12.4 billion.

5. In September, the trading volume of NFT market on Ethereum blockchain continued to decline, with a decrease of up to 22%, further dropping to approximately 961 billion US dollars.

6. The Spot trading volume of Compliance Centralized Exchange (CEX) did not continue the rising trend in August, falling by 17.4% to $724.6 billion in September.

7. In September, the net inflow of Spot BTC ETF showed a positive rise, with an inflow amount of approximately $1.13 billion.

8. In terms of encryption futures, the open interest of September BTC futures increased by 16%, while the open interest of ETH futures increased by 16.1%. In terms of futures trading volume, the trading volume of BTC futures in September fell by 16.1% to 1.11 trillion US dollars, and the trading volume of ETH futures fell by 20.8%.

9. In September, the open interest of BTC futures on the Chicago Mercantile Exchange increased by 14.3% to 10.3 billion US dollars, while the daily average volume decreased by 4.7% to approximately 4.8 billion US dollars.

10. In September, the average monthly trading volume of ETH futures fell to 465.5 billion US dollars, a decrease of 20.8%.

11. Regarding Cryptocurrency Options, the open interest of BTC Options decreased by 1.6% in September, and the open interest of ETH Options also experienced a decline of 8.4%. In addition, in terms of BTC and ETH Options trading volume, the monthly trading volume of BTC Options reached 38.6 billion US dollars, a decrease of 28.1%; the trading volume of ETH Options was 9.7 billion US dollars, a significant drop of 37.5%.

Author: Kalp

Translation: Plain Language Blockchain

This article will explore the world of vibrant Real World Assets (RWA) tokenization. Learn how blockchain technology is revolutionizing the financial industry by transforming tangible assets such as real estate and gold into digital tokens. Dive into conversations with industry key players, grasp emerging trends, and discover how local innovations like KALP tokenization are making waves. The blog offers in-depth insights into key participants and future trends, providing a comprehensive showcase of how tokenization is redefining investment and ownership.

Max and Ella are discussing a blog about the increasing rise trend of Real World Asset (RWA) Tokenization. The blog explains how Blockchain technology is changing the way people invest in high-value assets such as real estate and commodities. The blog focuses on how Tokenization breaks barriers, the latest trends, and key participants.

1. Leading Trendy Brands

1) JPMorgan Chase

By pioneering Blockchains with Onyx: JPMorgan Chase is at the forefront of blockchain innovation with its Onyx platform. Onyx aims to simplify financial transactions using blockchain technology. This platform allows JPMorgan Chase to issue and manage digital tokens, including tokenized bonds and stocks.

Testing and Implementation: JPMorgan successfully tested the Tokenization of various assets, including bonds and stocks. For example, they conducted a pilot program involving the issuance and trading of Tokenized bonds on their blockchain platform. This not only demonstrates their technical capabilities but also highlights the potential of blockchain in improving market efficiency, reducing settlement time, and dropping transaction costs.

Widespread Impact: By integrating Blockchain into its operations, JPMorgan Chase has demonstrated that this technology is not only suitable for tech startups, but can also be adopted by traditional Financial Institutions. Their participation indicates that Blockchain is expected to drive the transformation of traditional banks and the financial industry, establishing their leading position in digital innovation.

2) Societe Generale

Issuance of Tokenized Bonds on the ETH Network: Societe Generale, one of France's major banks, has taken an important step in asset tokenization by issuing tokenized bonds on the Ethereum blockchain. This move is noteworthy as it represents a Financial Institution embracing blockchain technology to innovate core financial products.

Embracing new technology: By using the Ethereum blockchain, Societe Generale is moving away from TradFi methods and exploring the potential of blockchain in providing faster and more transparent financial transactions. The use of Ethereum smart contracts allows for automated processes, thereby improving efficiency and reducing operational risks.

Impact on the financial industry: Societe Generale's actions are a strong endorsement of the capabilities of blockchain, highlighting its potential in revolutionizing the creation, management, and trading of financial products. Their efforts also contribute to the widespread acceptance and application of blockchain technology in the financial sector.

3) Securitize

Simplified digital Token issuance: Securitize focuses on simplifying the issuance process of digital Tokens while ensuring compliance with regulatory requirements. Their platform helps companies achieve asset Tokenization and provides an efficient process for creating and managing these digital securities.

Compliance: One of Securitize's core strengths is its emphasis on compliance with securities regulations. The services they provide ensure that tokenized assets comply with legal standards, which is crucial for maintaining investor confidence and market integrity.

Improve market Liquidity: By providing a Compliance digital Token issuance and trading platform, Securitize enhances market liquidity and accessibility. Their technology supports secondary trading of tokenized assets, allowing investors to buy, sell, and trade these digital securities safely.

4) Tokeny

Support Block chain integration: Tokeny, based in Luxembourg, assists institutions in transferring their assets to the on-chain Block. They focus on ensuring that the tokenization process complies with security standards and regulatory requirements, which is crucial for institutional adoption.

Platform features: The Tokeny platform provides a solution for the issuance and management of tokenized assets, with a focus on security and compliance. They provide tools for secure issuance of tokens, investor onboarding, and asset management to help organizations smoothly and efficiently enter the tokenized field.

Building Trust and Reliability: By prioritizing security and regulatory compliance, Tokeny helps enhance trust in tokenized assets and encourages institutional involvement in the exploration of Blockchain technology. Their efforts have driven widespread acceptance and normalization of asset tokenization in the TradFi market.

2. What is the latest trend in RWA Tokenization?

Institutional Participation: Major Financial Institutions including Blackstone, Goldman Sachs, and Fidelity are increasingly entering the Tokenization field, enhancing the credibility and influence of the market.

Sustainability: The tokenization of sustainable assets, such as carbon credits and renewable energy projects, is rising, prompting investment in environmental projects while generating financial returns.

Enhanced Liquidity: Tokenization allows for fractional ownership of assets and easier trading, enhancing the Liquidity of previously illiquid or hard-to-access assets.

Regulatory Development: Evolving regulations and frameworks are shaping the landscape of tokenization, and governments and regulatory agencies are committed to addressing legal and compliance issues.

Technological Advancements: Innovations in blockchain technology, such as Smart Contracts and Decentralized Finance (DeFi) protocols, are enhancing the efficiency and functionality of tokenized asset platforms.

Global Expansion: Tokenization is gaining widespread adoption in many regions around the world, especially in financial centers such as the United States, Europe, and Asia.

Integration with TradFi: The integration of tokenized assets with TradFi systems is deepening, including partnerships between blockchain platforms and traditional financial institutions.

Market segmentation is intensifying: Tokenization is surpassing traditional asset classes, expanding into niche markets and industries including art, collectibles, and intellectual property.

Increased Transparency and Security: The use of blockchain technology brings higher transparency, traceability, and security to tokenization, addressing common issues in asset management.

Innovative investment vehicles: Through tokenization, new investment products and tools are constantly emerging, such as tokenized real estate funds and commodity-backed tokens, providing investors with diversified investment opportunities.

3. KALPTokenization: Global Potential of a Local Story

Back in India, an innovative project called KALP is causing a stir. They have launched BIMTECH CBDC, which is a Digital Money used for transactions in an academic environment. Students, suppliers, and administrators have all become part of this tokenized ecosystem. Currently, more than 1,300 transactions have been completed, demonstrating how tokenization can be applied in real-world scenarios. KALP's GINIToken serves as TOKEN for money laundering, ensuring the efficient operation of the entire system and proving that even small ecosystems can benefit from tokenization.

Tokenization of Commodities

Tokenizing commodities such as GOLD and oil has become a major trend. Companies like Paxos and Tether Gold enable investors to hold Tokens backed by physical GOLD reserves, eliminating the complexity of dealing with actual assets and making it easy to trade or invest in commodities.

Paradigm Shift in Real Estate

Real estate is one of the most exciting areas of TOKEN ization. Platforms like RealT and tZERO allow people to purchase fractional ownership of properties. This means you can invest in real estate without having to buy the entire property. This opens up real estate investment to everyone, not just the wealthy.

4. Coping with Regulatory Environment

Governments around the world are beginning to recognize the potential of TOKENization and are supporting this trend through regulatory measures. For example, the European Union's Markets in Crypto-Assets (MiCA) Act and the United States Securities and Exchange Commission (SEC) are increasingly following the TOKENization of securities, paving the way for widespread adoption of TOKENization. With the clarification of these regulations, institutions and individuals will find it easier to securely and legally tokenize assets.

In short, the global adoption of RWAToken is accelerating, which will change our perception of asset ownership and trading. Tokenization is gradually becoming part of our daily financial life, whether it is for giants like JPMorgan or innovative local projects like KALP. With the rise of trends such as sustainable development and fractional ownership, we are moving towards a more inclusive and efficient financial world.

5. FAQs

1）What is the trend of asset tokenization?

The asset TOKENization is rising rapidly because it provides higher Liquidity, fractional ownership, and more convenient investment opportunities. This trend is driven by the advancement of Blockchain technology and the increasing interest of retail and institutional investors in rise.

2) Which countries are leading in the adoption of RWAToken?

The United States, Switzerland, Singapore, and other countries are leading the way in the field of RWAToken, thanks to their developed financial markets, supportive regulatory frameworks, and innovative technological ecosystems.

**3）How do institutions participate in the RWAToken transformation?

Institutional participants including major banks, asset management companies, and investment firms are increasingly participating in the tokenization of RWAToken to enhance Liquidity, simplify operations, and open up new investment avenues.

4. How big is the market for tokenization of real assets?

RWAToken market is rising rapidly, expected to reach about 2 trillion USD by the mid-2020s, driven by increasing popularity and technological progress.

**5）What is the main challenge hindering the global adoption of tokenized assets?

The main challenges include regulatory uncertainty, technical integration issues, as well as concerns about security and market fragmentation, all of which have hindered the widespread adoption of TOKENized assets.

6）How big is the market size of RWAToken?

By 2024, the RWATokenization market is estimated to be around $10 billion, reflecting the early but expanding stage of this field in the broader financial landscape.

Author: david phelps

Translation: Gate.io, Golden Finance

The 'Fat Protocol Thesis' has done enormous harm to the field, setting us back by several years.

In fact, I really like the "fat protocol theory". If you haven't read it yet, I strongly recommend you to read it.

A simplified version of this theory is that protocols (such as blockchain) capture more value than the applications built on top of them. Why? Partly because encryption applications have weaker moats (they are easier to replicate). But the main reason is that the success of applications will drive users to accumulate protocol tokens for use, thus creating network effects for the blockchain, as each application will push up the token price of the chain it establishes.

In 2016, this was a forward-looking argument. I would also like to add my point of view to explain why the protocol can have greater value than the application: protocolToken is similar to the national currency of a digital country, which not only serves as a medium of exchange, but also represents a legal order (Smart Contract) that guarantees the effectiveness of transactions, while collecting 'taxes' for the ecosystem. Applications, on the other hand, are usually just ordinary commercial entities that generate income.

Of course, the Market Cap of a currency is usually highly correlated with the GDP generated by everything built on top of it, so it is often much larger than the Market Cap of a company. That is why I think protocol is often more valuable than applications.

This is the problem. The past decade has validated the 'fat protocol thesis' in many ways, reaching its peak in the past year. It is well known that the market capitalization of protocols has surpassed that of applications. Protocols often raise hundreds of millions of dollars in valuation without having a product, while applications with exclusive users struggle to secure funding.

To understand the market's degree of consensus on the "fat protocol theory" - even to the point of being unreasonable - just look at the recent valuations of highly interchangeable, random Layer 2 (L2) chains.

These L2s do not meet any of the requirements of the 'fat protocol theory' because their Tokens are not needed for transactions - in fact, these L2s do not even require Tokens. However, in the encryption field, narrative often holds more power than logic, and many of these L2s have easily reached valuations in the tens of millions, while applications struggle in terms of valuation.

(Of course, I think some L2 will truly be valuable, such as @mega_eth and @movementlabsxyz, but that's another topic.)

On the issue of "chain supremacy," we have heard many times: a blockchain is only valuable when there are valuable applications on top of it. The chains themselves also say this, emphasizing their tremendous performance improvements. "Of course, we need to expand the block space," they say, "because the next top application will need it." But in a world where an application has failed for a full decade, only a few people still want to build or fund more applications.

This is interesting, but unfortunately, the logic of "we need to fund applications to make blockchain successful" is never enough to make venture capitalists invest in an entire category they think will fail. The idea that applications will help blockchain become valuable is appealing, but if no one thinks the applications themselves are valuable, then this idea is not persuasive enough.

Therefore, I would like to propose a "Fat App Thesis". What I want to point out is that there has been a viewpoint in the entire history of the Internet that has always been true, to the point where I think it's a bit boring: In fact, most of the value in the encryption field today lies in the applications.

There are three reasons, in increasing order of importance:

The first and most speculative reason is simply the historical cycle. Applications are severely undervalued while protocols are severely overvalued for the reasons mentioned above. The internet tends to switch back and forth between the ten-year cycles of infrastructure and applications, and we are now at the end of a large-scale infrastructure boom, in which we have created extraordinary technology that can finally run (which was not possible two years ago). Now is the time for applications to shine, and they have never been undervalued like they are now.

The second, more persuasive reason is that since the introduction of the 'fat protocol thesis' in 2016, the positions of applications and protocols have been swapped. At that time, applications were mostly interchangeable forks that served as trading tools for each other, while chains were walled gardens with significant liquidity moats. However, there has been a tremendous change in the situation. Nowadays, applications cannot fully replicate each other (e.g., Sushiswap) because their real moats are the users.

At the same time, the chain does not even need too much Liquidity to support future social applications, unless they are targeting DeFi applications that require Liquidity (such as @berachain). More importantly, with the emergence of Cross-Chain Interaction solutions and chain abstraction, users can seamlessly use applications and bridge across ecosystems without knowing the chain used, Liquidity as the moat of most chains is collapsing. Today, chains are largely interchangeable—rather than applications.

But this brings us to the third and most important reason:

When Liquidity is no longer a moat, users are the moat.

Users will gather where other users are. That's why only a few apps will ultimately prevail—because users will eventually attract each other to a few unique internet “cities”.

This is also why I doubt the reason why everyone is so pessimistic about the application today (inside and outside encryption): a few applications won a decade ago, and since then, it has been difficult to compete for their user attention. Frankly, limited by the limitations of Web2 - especially application store fees, closed APIs, and the inability to spend money easily - it is difficult for anyone to come up with new application ideas.

But on-chain technologies enable entirely new app experiences, bringing economic and reputational gains that were never seen before: they eliminate app store fees, open up the APIs of public block chains, and make it easy for users to spend and save money. So that's my theory. I'm sure some of these apps will win as well. As the history of the Internet has always shown, they will become "super apps" that take up most of the block space.

I may be wrong, very wrong. This era may be different from the past. We may see the thriving development of millions of mini-applications, just like all the applications on Telegram, I will be very happy about this.

But I suspect we are in a brief era of applications, as the design space for new applications has only opened up in the past two years - and those encryption applications that are based entirely on "Token price pump" will eventually collapse as "Token price falls". We don't talk enough about this, but all signs indicate that this era is coming to an end. What is really exciting about encryption applications today is that the next generation of prediction markets, games, NFC chips, DePIN, and even e-cigarettes will no longer rely on Token price pump as a use case. This is the first time that encryption is a means, not an end.

My point is, the application can actually win in the long run and start occupying all the Block spaces we have been generating for years. So what happens next? These applications can make innovations. They can return funds to users instead of the Apple App Store to incentivize their rise. They can generate income from every click. Eventually, they can generate huge revenues, with only a small portion flowing to the chain.

I've said before that chains don't need huge revenues to achieve huge valuations, as they should be valued based on something like GDP. But when the majority of GDP is generated by a few applications, we should ask the question: Who is the real "fattest"? Is it still the chains? Or is it more likely the applications?

Finally, I want to say that I am not pessimistic about the chains - not at all pessimistic. Many chains are not interchangeable due to their unique Virtual Machine (VM) or opcode (such as @solana, @irys_xyz, @movementlabsxyz, @eclipsefnd), native incentive mechanisms (such as @berachain), high performance in familiar VMs (@mega_eth, @monad_xyz), or specific permissioned implementations (@repyhlabs, @celestiaorg). Applications built on these chains can only be implemented on these on-chain implementations. In the end, even if only a few applications win market share, investing in the chain is still the best way to invest in these applications.

We like to think of a war between infrastructure and applications as they compete for funding from the private market. But in reality, there is no real value war between the two - they complement each other and cannot survive independently. In addition, I suspect that most applications will operate like protocols and become the foundation built by others.

However, despite this, we not only act as if there is a war, but also act as if infrastructure has won. We are realizing that this is fatal for infrastructure. But what we need to realize is that this is also a huge missed opportunity.

The next wave of main value will flow to applications, and in this ecosystem, only a few are willing to take the risk to try to seize it.