In the previous article, I mentioned that the development of the Web3 industry will move towards acquiring incremental users. Today, let's discuss in detail why the direction of acquiring incremental users is a promising breakthrough.
Firstly, we can all feel the changes in global geopolitical conflicts, such as the Russia-Ukraine conflict, the Israel-Palestine conflict, the India-Pakistan conflict, and various other ongoing events. Along with geopolitical events, there are often economic sanctions, such as being banned from using SWIFT, currency decoupling, and other sanction measures. Even in countries unaffected by geopolitical influences, there is still an impact from the global economic downturn, leading to a demand for wealth preservation among citizens of various countries. Of course, wealth preservation here does not refer to purchasing cryptocurrencies, but rather utilizing the open and decentralized network of Web3 to bypass economic sanctions, currency controls, investment access restrictions, and other limitations.
However, the frequent occurrence of geopolitical conflicts will stimulate the demand for countering geopolitical politics. This demand is likely to be taken over by Web3 in the current stage, which is why I believe it is a potential incremental market for Web3. Constrained by geopolitical conflicts and changes in the economic environment, ordinary people within the affected areas have an urgent need for wealth preservation and wealth transfer. For those who are capable and influential, these are not issues, but we cannot ignore the needs of ordinary people, and this is also where Web3 can achieve inclusive finance.
Because Web3 has inherent resistance to geopolitical politics, such as decentralization, immutability, transparency, and so on, which we are all familiar with and have memorized, these are the natural advantages of Web3.
Taking China as an example, the average interest rate on deposits in China is generally between 1.5% and 2.5%, and even for large deposits or bond-based financial products, it is only around 3.x%. At the same time, there is a limit of $50,000 USD per person for currency controls, which is always a constraint. Of course, you can also purchase foreign currency financial products by opening a foreign exchange account and buying foreign currency, but when you exchange it back, the exchange rate difference will eat into your investment returns. Considering the downward economic environment and employment situation in China, the situation is not optimistic.
Therefore, the RWA (Real World Asset) track of Web3 can help citizens in countries with such restrictions achieve wealth preservation. For example, MakerDAO's DSR (Dai Savings Rate) can reach as high as 5%. Simply put, the purpose of introducing RWA assets into MakerDAO is to diversify the assets supported by external credit and utilize the long-term additional returns brought by US government bonds to stabilize the exchange rate of DAI, increase the flexibility of issuance, and reduce the dependence of DAI on USDC by incorporating US government bonds into the balance sheet, thereby reducing the risk of a single point of failure.
Web3 realizes the cross-border and barrier-free mapping of US Treasury bond returns. This is undoubtedly a strong demand for those affected by currency controls.
Another case I want to mention is an imagined scenario that has not yet been realized: RWA mapping of gold ETFs. In some war-torn areas, even if people rush to buy gold, they may not be able to protect their wealth properly. Physical gold carried on one's person may be looted, and local gold ETFs may not be able to fulfill their obligations due to economic sanctions (most of the gold in various countries is stored in the United States).
Therefore, a Web3-based RWA mapping of gold ETFs may be more feasible. For example, a well-known institution issues a gold ETF and maps it to the Ethereum blockchain. Users worldwide can indirectly obtain wealth preservation by accessing Web3. Of course, you may argue that this is too decentralized, but if you look at the cornerstone currency of the entire Web3, USDT, isn't it also a kind of US dollar bill issued and endorsed by a company or institution? RWA mapping of gold ETFs is just a blockchain-based bill for gold ETFs.
There are many similar cross-border investment cases, such as wanting to buy China's Jiang Xiang technology in the United States or wanting to buy Samsung in South Korea in China, and so on. These can be achieved through Web3's synthetic asset project, Synthetix. Of course, there are still many technical issues to be solved in between. But this is still a promising future for Web3.
Finally, because of the demand caused by the aforementioned geopolitical conflicts and changes in the economic environment, this is likely to stimulate the rapid influx of incremental users, making the Web3 industry more prosperous. I hope that this kind of science fiction article about Web3 can bring some ideas to Web3 practitioners and ultimately become more marketable Web3 products.
Author: Liu Ye Jing Hong
WeChat Official Account: Wesman Notes
Personal WeChat ID: liuyejinghong_
RSS3 Personal Homepage: liuye.rss3.bio
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Mirror: mirror.xyz/liuyejinghong.eth
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