Venturing into 2024
Happy 2024! I hope everyone had a wonderful Christmas and holiday break. In this newsletter, I would like to summarize what has happened since the last one.
This period of December is usually the period also where the next year’s market outlook reports come out and a good time to catch up on reading. I managed to read three good reports from Coinbase, Messari and The Block. There is simply too much to say about what’s in the reports, but I found ERC-4337 particularly meaningful.
ERC-4337
ERC-4337 looks to enable account abstraction. It looks to be a promising upgrade to Ethereum and makes it easier for enterprises to adopt public blockchains. One of the key problems that we faced at Zilliqa was: who pays for the gas? If the corporate customer is convinced of the benefits of blockchain technology, they may still encounter difficulties when it comes to handling the actual token. Specifically, they may not know who will be responsible for managing the token on their end. They usually prefer not to handle the token themselves in order to avoid the financial and cyber risks associated with holding the token to pay for gas fees.
JP Morgan and Apollo recently used Biconomy's Paymaster for their account abstraction service in the Project Guardian pilot focused on alternative investment tokenization. You can learn more about Biconomy's Paymaster here. This could be the way forward for an important element of how corporates can utilize public chains without having to handle gas payments themselves.
Bitcoin ETF
The big news now, of course, is the Bitcoin ETF, with BlackRock’s application especially. Personally, I am leaning towards the more bullish camp. I believe that it is impossible for all the potential demand to be fully priced in. If the ETF is approved, it will not just be a 0 to 1 moment for BTC; it will actually be a -1 to 1 moment for BTC. Currently, Bitcoin is seen as a speculative asset, but if the ETF is approved, it could become a fundamental part of one's portfolio, much like gold. Incentives are very powerful. If there is money to be made in selling BTC ETFs, you can bet investment advisors will do it. Right now they can’t. With a BTC ETF they can. It really is the watershed moment for BTC this week.
Book is finally out
In other news, “Decentralizing Finance” is now available on Amazon (Hardcover and Kindle) and major bookstores. I'm pleased with the result, which really could only have been achieved with a tier 1 publisher like Wiley. There’s a lot to writing and publishing a non-fiction book. When I have more time I will finish up a post about the process and journey.
I’ve been asked a few times about how relevant the information is, given the fast-moving nature of DeFi. I give it a year. By 2025 I will need to think about updating the book with possibly a 2nd edition. Nonetheless much of the material is fundamental in nature and the structure (eg. how the chapters are organised) will likely hold constant for years to come.
I have also been informed by Wiley that the book will be made into an audiobook, with an estimated release date around March. It will be available on major audiobook platforms, including Audible, Apple Books, Spotify, Google, and Audiobooks<dot>com.
CFTC
The CFTC has released a comprehensive report on Decentralized Finance. You can find the report here. As one of the major regulators in the US, this demonstrates ongoing regulatory scrutiny and awareness of the crypto and DeFi space. It is also encouraging to see that they recognize the benefits and maintain engagement with the industry. As mentioned before in one of the newsletters I think CFTC’s approach harmonises with the recommendations of the CCI on DeFi regulation.
One observation on page 14 is that none of the members of the Subcommittee on Digital Assets and Blockchain Technology are represented by DeFi protocols. Instead, the subcommittee is comprised of representatives from CeFi. To better align their policies on engagement, it would be beneficial to include representatives from Uniswap, Aave, and other DeFi protocols on their subcommittee.
Podcast on Blockhead
One other media appearance I had before the close of last year was on a podcast with Blockhead, a Singaporean crypto media company spun off from Rice Media. The podcast episode, titled 2023 Round-Up: A Wild Year in Crypto ft. Kenneth Bok, featured discussions on notable events in the crypto industry from the previous year.
During the podcast, I discussed topics such as the SEC's aggressive enforcement actions against crypto exchanges, the increasing institutional adoption of cryptocurrencies, and the developments in stablecoins in 2023. The conversation was hosted by Tim Han and Tim Misir.
Conclusion
I'm working on a course based on the book and looking to do more speaking engagements at various venues. If you haven’t already, please consider buying a copy of the book. You can see a sample of the contents here. S$40 is the price of lunch these days. The book is a summary of numerous reports on DeFi and DLT, combined with my own insights and observations over the years. It is designed as a practitioner's handbook, providing practitioners with the necessary knowledge to upskill themselves quickly without having to read hundreds of reports. Will be most happy to sign your copy also.
Signing off. Have a good week!