Author: Nancy, PANews
Last week, Trump's victory sounded the horn for the crypto bull market. With Bitcoin leading the way to break historical highs, market sentiment has surged, and investor confidence is gradually recovering, paving the way for the mainstreaming of cryptocurrencies. Unlike previous times, under the backdrop of increasingly stringent global regulatory environments, the focus of this bull market has shifted to innovation and competition within a compliant framework.
A new cycle will inevitably bring new narratives. For a long time, 'compliance' was not a business that everyone could do; the high costs and the consensus of being well-received but not profitable created significant barriers. However, it must also be recognized that the era of regulatory arbitrage in Web3 has ended. After Donald Trump was elected as the new U.S. president, it inevitably led to a 'policy bull market,' where 'compliant capital' from traditional financial institutions will come rushing in as new increments, which also means that the capital structure and competitive landscape of the crypto market will undergo profound changes.
Based on this market background, HashKey Group announced the launch of the ecological token HSK on HashKey Global, which is also the world's first 'compliant ecological token.' As the carrier of the value of the entire HashKey ecosystem, the continuous empowerment of HSK will attract widespread participation from the global Web3 community.
Looking across the market, the well-known compliant exchange Coinbase has yet to issue a token, while offshore exchanges may have platform tokens, but most are still non-compliant, and their future space will become increasingly limited. In this view, HashKey, which was 'compliant from day one,' seems to choose to explore the innovative boundaries of compliant business with the world's first compliant ecological token HSK. This move can be described as bold.
However, like Dr. Xiao Feng, Chairman and CEO of HashKey Group, who invested in Ethereum ten years ago, this is not a business that was thought up on a whim, but rather one that has been 'planned for a long time.' According to official introductions, HSK is not just a simple 'platform token' of the exchange, but an 'ecological token.' The role of HSK is like the blood of HashKey, continuously supplying oxygen and energy, transporting value, and revitalizing the entire HashKey ecosystem.
The vast HashKey business empire, with ten years of refining a token, HSK is the value capture device within it, and the new round of value gears has already started turning.
Take it slow, but surely.
To understand the value support behind HSK, one must first grasp the various puzzle pieces of the HashKey business empire.
Crossing several bull and bear markets, HashKey has established a globally licensed exchange, investment and asset management, tokenization, and infrastructure services in various fields. Earlier this year, HashKey Group completed nearly $100 million in Series A financing, with a valuation exceeding $1.2 billion. In terms of lifecycle and business excellence, almost no project can surpass it.
Among them, the exchange business is the castle and core pillar of HashKey, whose compliance and high thresholds form an insurmountable barrier. Tokenization, Cloud, and Capital serve as the moat, and HashKey strives to build it both deep and wide, already forming a huge ecosystem. HashKey Chain connects all existing ecosystems together, forming a system that can greatly promote cooperation among strangers, with all ecological links mutually promoting each other and collectively providing nourishment and vitality for the castle business.
First, let's talk about HashKey's original intention - HashKey Capital. As one of the world's top institutional asset management companies, HashKey Capital was established in 2018 and is also known as 'Asia's a16z.'
Reports show that HashKey Capital's funds under management will reach $1 billion by 2024, having invested in over 600 blockchain projects, recently including well-known projects such as Berachain, Babylon, Aethir, and Catizen. This year, the Bosera HashKey Bitcoin ETF and Bosera HashKey Ethereum ETF were issued, with HashKey Capital serving as a deputy fund manager, jointly issued with Bosera International. The positive externalities and good reputation built by HashKey Capital over the long term have helped establish an unbreakable moat for the brand.
The moat effect has also helped HashKey develop its core business, which is HashKey's castle - the compliant exchange. HashKey has compliance licenses in multiple locations including Hong Kong, Bermuda, Japan, and Singapore, with the two most well-known compliant exchanges being HashKey Exchange and HashKey Global.
HashKey Exchange began applying for licenses in 2019 and obtained licenses number 1 and 7 in 2022. According to an interview with Livio Weng, COO of HashKey Group and CEO of Exchange, 'Although HashKey Exchange is a latecomer in the history of exchange development, the brand effect of HashKey Group has allowed HashKey Exchange to be widely accepted in the local Hong Kong market and has established a good reputation among global overseas Chinese clients. Currently, the total trading volume of HashKey Exchange has exceeded 535 billion HKD, and assets are about to surpass 6 billion HKD, making it the largest compliant virtual asset exchange in Hong Kong.'
Time is neither long nor short. HashKey Exchange has held its ground in Hong Kong for five years, accompanying the Hong Kong Web3 market step by step toward improvement, learning to navigate the regulatory landscape. Now, the virtual asset market in Hong Kong has transitioned from a cautious review period to a development phase, and it may even become a new compliance benchmark for global virtual asset trading in the future, with HashKey Exchange being one of its 'learning committee members.'
This year, the offshore compliant exchange HashKey Global, which obtained the Bermuda license, has also experienced rapid growth. After two months of going live, it has achieved profitability. As of November 11, according to the latest data from Coingecko, HashKey Global ranks 7th in global trading, becoming one of the fastest-growing licensed exchanges worldwide in 2024.
Of course, the value of compliant exchanges is not just as simple as a few licenses; it is also the key to supporting a series of unique compliance scenarios. For example, the fiat channel advantage that HashKey currently emphasizes is irreplaceable and has the potential to build a global banking channel, which is already beginning to take shape in Hong Kong. Furthermore, narratives around RWA, PayFi, stablecoins, etc., all require compliance as support to realize their 'golden shovel' functions.
Additionally, although the invisible costs and time costs of compliance are very high, deterring many enterprises, the barriers it brings are also significant and possess a 'time compounding effect.' Anchored by its two flagship exchanges, HashKey has opened up a global matrix layout for compliant exchanges among the Chinese community.
Based in Hong Kong and looking at the world. In the regulatory competition across regions, HashKey, due to its good reputation, is more easily accepted locally and often has shorter review times required before business operations, which is the invisible advantage of native compliance - regulatory trust. For example, when applying for the scarce Bermuda license, it was approved in just three months. According to public information, HashKey has applied for licenses in Dubai, Europe, and other places, and is expected to land by the end of this year or early next year.
The Eastern Coinbase is about to emerge. A reference point is that the latest data shows Coinbase's market value has exceeded $80 billion, with a daily trading volume reaching $13.5 billion, far surpassing the overall market value of the Hong Kong Stock Exchange. The layout of HashKey, which is 'similar' to Coinbase, is bound to be full of imagination. According to CMC data, the two exchanges of HashKey currently have a total daily trading volume of $150 million, which, by proportion, suggests that the market value of HashKey Exchange has also exceeded $1.4 billion. It is expected that as the era of regulatory arbitrage passes, compliant exchanges will further replace non-compliant exchanges in market share. Currently, the market shares of non-compliant exchanges, compliant exchanges, and DEX are approximately 75%, 15%, and 10%, respectively, leading to the conclusion that compliant exchanges still have at least 75% market development space.
Take it slow, but surely. The innovative business model of compliance needs time to accumulate. After years of hard work, the HashKey exchange sector is expected to reap the benefits in this round of compliance policy-driven bull market. Currently, the Web3 industry has around 560 million people; compared to the 6 billion population of the internet, it is roughly estimated that there is still more than ten times the room for overall business growth.
In addition, the Tokenisation, Cloud, and other businesses of HashKey Group are also interconnected. The tokenization service provider HashKey Tokenisation creates liquidity for Web and Web3 projects at various stages and provides unique assets for compliant exchanges, becoming a bridge that connects the real economy, supports innovative technologies, and aids in the construction of financial markets. The Tokenisation business has participated in the Hong Kong Monetary Authority's Ensemble project sandbox, which will promote the development of industry standards for the tokenization market in Hong Kong.
HashKey Cloud provides professional, stable, and secure blockchain services to global clients, with its node validation services covering over 80 mainstream public chains and an asset management scale exceeding 1.2 million ETH, ranking among the top three in Asia and top ten globally. In the ETH ETF Staking that is being explored globally, HashKey Capital and HashKey Cloud can complete a perfect closed loop within their own businesses, and it is expected to become a new business growth point.
As Livio Weng envisions: 'We want to become the best spot virtual asset trading platform, the largest ETF custodian, and the most important Ethereum node service provider. We have made deep layouts and constructions in several Web3 fields such as stablecoins, asset tokenization, and public chain infrastructure.' According to public information, HashKey has recently launched the public chain HashKey Chain, which has opened for public testing after a year of comprehensive internal testing, allowing users and developers to participate in testing through the official website hsk.xyz and become early supporters of long-termism. This has formed a full-stack crypto ecosystem platform.
In this light, HashKey's current business scale has far exceeded the $1.2 billion valuation at the time of financing.
Ten years of refining an 'ecological token.'
HashKey has always been the entity that understands Web3 the most in traditional finance and compliance the most in Web3.
Among them, HSK reflects the value of the entire HashKey Group, bearing the mission of bridging the gap between crypto and traditional finance, connecting and integrating these two financial systems.
Ten years of refining a token, what makes this token different? Regardless of the industry, 'platform tokens' have always been a hot business, for early investors, the only difference is between making more or making less. HSK, on top of this, transcends the ordinary investor's understanding of 'platform token' concepts and pioneers the world's first 'compliant ecological token,' empowering value across all business scenarios of HashKey.
First of all, HSK, as the native token and Gas token of HashKey Chain, will empower the long-term development and continuous growth of the ecosystem. In comparison to HashKey's positioning against Coinbase, HashKey Chain is the 'HashKey version' of Base. As a full-stack crypto ecosystem platform, HashKey Chain aims to help Web2 companies seamlessly enter Web3, supporting key areas such as BTCFi, stablecoins, payment finance (PayFi), and real-world assets (RWA). Currently, the HashKey Chain ecosystem has attracted over 150 projects, enabling enterprises to quickly experiment and deploy Web3 projects by integrating payment, tokenization, lending, and trading solutions to connect with global users.
In addition, as a medium for rewards, governance, and transaction fees, HSK will be widely used for platform service fee payments, exclusive token priority purchases, public chain governance and decision-making, value-added services, cross-platform ecological cooperation, custodian fee discounts or waivers, node validation rewards, and research report publication, among other multiple rights. Users holding HSK will be able to enjoy a full range of crypto services from trading and investment to application deployment, connecting every core business of HashKey.
As competition intensifies in the industry, technical discourse, background narratives, and storytelling are no longer golden signs. The market is gradually shifting towards more practical value indicators, such as real adoption rates and revenue growth. The 'value' that the business layout of HashKey endows HSK makes it fundamentally different from most 'price tokens' that peak in the market.
In terms of token distribution, HashKey has also made various attempts at 'long-termism,' such as decentralization from large institutions, moving away from venture capital, and returning to the community.
During the initial fundraising phase, HSK distributed initial chips through 'gifting' and 'ecological rewards' to lower the actual circulating market value so that those who truly love, contribute significantly, and possess a long-term vision can participate in investment and share in the benefits. Additionally, to prevent value dilution caused by token rewards, HSK introduced a burn mechanism, using 20% of platform business profits for repurchase and permanent destruction of HSK to ensure the steady increase of market value.
According to the HSK white paper, the total supply of HSK is 1 billion tokens, of which 65% is used to support medium- to long-term ecological construction, 30% is allocated to the team, and 5% is reserved as a fund. During the financing period, HashKey chose equity financing instead of issuing tokens to avoid short-term market fluctuations caused by VC sell-offs, ensuring long-term development.
Distilling the essence and traversing cycles is precisely the strength of the HashKey team. As the Web3 compliance market further expands, HashKey is sure to be a leader. Therefore, the value foundation built by the various core business lines of HashKey Group listed above is only static data; the value of HSK comes not only from its initial application but also from the potential brought by HashKey's high growth rate.
This is not just a story of an 'ecological token'; it is a journey about value creation and long-term growth.
