What will be the first step after HashKey Chain goes online?
Written by: Zhou Zhou, Foresight News
“I’m an INTJ and I train my own big model every day,” said Kay, head of operations at HashKey Chain.
On December 31, 2024, the HashKey Group platform token HSK once again reached a price of 2.3 U, with an increase of more than 3 times in one month. This also attracted people's attention to the L2 public chain HashKey Chain, which has just been launched on the mainnet.
HashKey Group is a compliant Hong Kong financial entity and also a Web3 company. Some say it is the financial institution that understands Web3 the best, and the Web3 institution that understands traditional finance the best. This unique narrative has attracted the attention of developers, project owners, and investors who have intersections in these two fields to HashKey Chain and its ecosystem operators.
"Every new high puts a bit of pressure on me; I just want to provide better value services to everyone," Kay said.
Kay said: "After two years of internal testing, HashKey Chain is finally ready to launch, and our narrative and main advantages have been confirmed over the past six months to a year through repeated observations and discussions with the market. The focus is on the construction of BTCFi, RWA, Stablecoin, Depin, and other tracks. During this time, we've discussed with over 200 project parties and established partnerships with several, such as Solv, Orbiter, OKX Wallet, etc."
"What we want to do more is to act as a bridge, bringing Web2 assets into Web3 and providing Web3 with richer assets and scenarios," Kay said.
As the head of operations for HashKey Chain, and one of the few female leaders of L2 public chains in the industry, Kay has presented a different image to us. In her spare time, Kay enjoys practicing Ba Duan Jin. She is both a researcher and a trader, following market news and trading memes. With HashKey Chain officially launching its mainnet as the leading crypto project in Hong Kong, she has increasingly come into the public eye.
Over the past year, Ethereum Layer 2 has experienced explosive growth, with trading platform L2s like Base (Coinbase), Soneium (Sony), Morph (BitGet), HashKey Chain (HashKey), and Ink (Kraken) emerging. Many of them have risen by leveraging the extensive resources of crypto exchanges, particularly Base, which is supported by Coinbase and has become a leader among Ethereum Layer 2s.
As one of the over 200 Ethereum Layer 2s, HashKey Chain aims to stand out and carve a unique path for itself, which is exciting but not simple. Therefore, on the occasion of HashKey Chain's mainnet launch, Foresight News conducted an exclusive interview with Kay, the head of operations for HashKey Chain.
HashKey Chain follows a differentiated L2 path.
Joe: Kay, can you introduce yourself?
Kay: I started in traditional finance, doing primary and secondary investments. I got in touch with Ethereum in 2019 and began working on research and strategic investments related to exchanges in 2021. I joined HashKey in early 2024, and my team mainly handles the HSK token ecosystem and the operation of the newly launched L2 public chain HashKey Chain.
Joe: How long have you been preparing for HashKey Chain?
Kay: Our internal testing of the public chain has been underway for nearly two years, and we have confirmed the technical solutions. There are over 150 L2s already launched in the market, with more than 80 scheduled for launch. We are facing a market of over 200 L2s. With many monks and little porridge, we are constantly discussing and searching for suitable positioning while conducting technical testing.
Joe: With so many L2s, how do you see the current landscape of L2?
Kay: The development of L2 has gone through several consensus stages, with different focuses in each cycle.
In 2021, it was a time when major L1s were challenging Ethereum's position. After The Merge in 2022, the focus shifted completely to PoS, and the Shanghai upgrade in 2023 gave Ethereum staking more flexibility. Subsequently, four major players like Arbitrum and OP launched their tokens, and then the modular concept emerged. With the 2024 Cancun upgrade and the improvement of various CKD, stack tools, and RaaS services, many projects began to ride the wave of L2s, becoming a focal point for VC investments.
I think at this stage, it is very difficult to expect new breakthroughs in underlying technology; everyone is starting to consider the application road. For example, Morph focuses on consumer-grade public chains, and Sony Blockchain Soneium also has its own ecosystem, with a rich community and a transition from Web2.
Joe: This year, I noticed many project parties have issued their own L2s, including Uni, Ape, Cyber, etc. This seems to have become a trend. In the future, if the world is filled with L2s issued by project parties, how should HashKey Chain position itself?
Kay: If it is an application chain, it is unlikely to operate in isolation and will not abandon other ecosystems. An application-based project creating its own chain merely adds a scenario for retained value but does not withdraw from other chains.
Joe: What do you think will be the criteria for judging L2 in the future? Will it still be TVL, user numbers, transaction numbers, and application scenarios?
Kay: There are many ways to manipulate TVL, but they are not sustainable. We do not need to pursue artificially inflated data results for financing needs. Of course, user counts, TVL, and transaction volumes will certainly be compared horizontally, including by exchanges and users.
Ultimately, everyone needs to look beyond these superficial, indicator-based things. My judgment of whether a public chain has potential is based on whether it was born to issue chains or driven by real demand. Even if that chain is created for memes, it is still a real scenario. It's not about chasing trends just because they're hot, without having your own positioning and advantages.
The advantage lies in having high entry barriers and high barriers to competition. What we are doing on this chain is something that others cannot replicate. For example, Sony Blockchain has the accumulation of the Japanese and global entertainment industry and channels. It is difficult for others to replicate in a short time. We still need to observe the final results, but at least it has the basic conditions to operate as a public chain.
Joe: What are HashKey Chain's own advantages and barriers?
Kay: This year, we decided to develop L2 from the group's perspective. The group currently has a VC investment, two compliant exchanges (HashKey Exchange, HashKey Global), tokenization, Cloud, Web3 infrastructure business, and OTC, covering a full range of assets. However, we realized that it requires an incentive and circulation mechanism, which is the opportunity for the emergence of the HSK token.
On the other hand, we lack a carrying scenario. Hashey has many resources, such as a dual bridge relationship for compliance and Web3 globally, and many deeply cooperative projects and partners. This requires a soil where everyone can participate in the Web3 ecosystem, so we need public chains and L2s to connect all services and assets within the ecosystem.
On another level, we are also seeing the dawn of large-scale applications of Web3. For example, in Singapore, you can pay with USDT for a taxi, which is a significant application for payment. Additionally, the United States has clearly identified crypto assets as core assets, so the large-scale adoption of cryptocurrencies will certainly be something all industry friends will focus on going forward.
We have recently received many inquiries from Web2 family offices and VCs who want to participate in the Web3 industry. Aside from buying ETFs, if they want to engage in Web3, whether it's asset allocation or project issuance, they must find a trustworthy partner. This partner should ideally understand both Web2 and Web3, and allow them to collaborate confidently. HashKey has become the top choice.
Entities like HashKey are actually quite rare; a single entity or public chain can ensure long-term operation and must ensure that it has never done anything to bring risks to its partners. We can assist partners in local compliance operations, and we can also issue unique assets on-chain, such as BTCFi, PayFi, and RWA. All traditional financial assets can be issued in collaboration with us. Many users and funds are unable to participate in crypto projects, so I can attract them to stake with a relatively reasonable yield and use some of the returns as subsidies, allowing users to enter the crypto space with their first asset being HSK. We will also build important scenarios for stablecoins and cross-border payment settlements; these are all areas where HashKey Chain can expand.
The first step after the launch of HashKey Chain.
Joe: In such a competitive landscape, how do you plan to kick off the first step for HashKey Chain?
Kay: On December 18, our mainnet has launched, and the first thing we need to do is to design innovative products and implement them in real scenarios.
We aim to create unique assets and products on-chain to empower these products. A crucial point now is to ensure foundational infrastructure; for instance, we need to ensure that the wallet, oracle, and DeFi trifecta are all complete. We deploy mature technologies for the supporting components while also introducing various partners' wallets and cross-chain bridges. We mobilize resources to encourage everyone to deploy with us, providing more choices for project developers and users.
At the product level of the public chain, we have unique advantages in BTCFi, PayFi, RWA, and stablecoins. We provide multi-layered KYC infrastructure so that different projects can attract suitable user groups according to their needs. For colleagues deploying unique assets on-chain, we provide sufficient liquidity and users, which is primarily what we focus on in operations. We want to allow users to participate in the public chain in the simplest way, including providing legally compliant channels for deposits and withdrawals, and connecting assets within exchanges and the public chain.
Joe: Every public chain has a key DEX and DeFi product. Can you share some details about this product?
Kay: We have already disclosed our partners on our official website, and I hope everyone can access information about our partners through my portal. We have also made several official announcements about key partners in our focus areas. For example, we have in-depth cooperation with Solv Protocol, a popular Bitcoin re-staking protocol, and OKX Wallet has become the first core wallet to support the mainnet. Additionally, several regional stablecoins, including Hong Kong's sandbox stablecoin, are also our partners. We will also launch a special incentive mechanism for HSK for the community and users.
First, we will collaborate with large multi-chain deployed DEXs to provide basic liquidity. On the other hand, we will also develop some unique assets, because large protocols cannot meet the demands of new assets. This is also why we continue to host hackathons to discover new projects and provide grants. If anyone has custom development needs for our unique assets, please feel free to contact us directly.
Joe: Which types of projects would you be more inclined to give grants to?
Kay: We have a vision to strongly support Asian developers. We hope that through our presence, Asian developers will have a more reassuring space to showcase their talents. Recently, I spoke with two GameFi and RWA projects. In China, there are many excellent product forms with strong profitability and a strong willingness to expand abroad, but the paths are not clear enough, and there are concerns about compliance risks. This is exactly what we want to help everyone with.
The projects we focus on collaborating with are those that can empower our existing resources to better solve real-world problems. For example, one of our ecological project collaborations directly uses stablecoins for hotel and flight bookings. Meanwhile, HashKey’s OTC business can provide a very good platform and channel to facilitate this, including what I just mentioned regarding exporting blockchain games and cross-border payment settlements. We hope to help everyone truly enjoy the convenience brought by digital currencies. Our public chain will support projects with real application scenarios that can bring more convenience to people's lives, rather than purely speculative projects.
Joe: Grants are always limited. Beyond grants, what other ways do you have to attract quality projects to enter the HashKey Chain ecosystem?
Kay: Our grants are distributed in two ways. One part is used to incentivize early-stage projects, such as the several tracks I just mentioned. If there are some innovative early-stage projects, we are very willing to support early operations and development through grants.
Receiving grants is just the first step; we will also provide subsequent support, including investments from our VC and listings on compliant exchanges. After these projects have collaborated with the public chain in its early stages, their data and business forms will be validated by the public chain, providing valuable references and data for our other business entities.
For the public chain itself, our grants will be given to financial and non-financial projects with real-world application scenarios. Additionally, we are inclined to support Asian projects, especially those from the Chinese community, offering early support in our way, hoping everyone can achieve further development. In December, we held our first hackathon "Tai Chi" in Hong Kong, attracting developers from the Greater Bay Area, South Korea, Australia, and other countries.
Joe: Last week, HashKey Chain announced the launch of a $50 million Atlas Grants program for developers. Where does this funding come from, and where do you plan to use it?
Kay: Grants will mainly be distributed in the form of HSK tokens. 65% of HSK is used for ecological incentives, and public chains are one of our most important ecological scenarios moving forward. We will definitely support the construction of the public chain ecosystem, especially in its early stages. However, these 50 million will also be distributed over time, focusing on supporting key projects at different phases. Projects must reach our predefined milestones to receive their grants in stages.
For developers' projects, the purpose of grants can be mainly divided into two parts: one is to support the development and operational costs of relatively early-stage projects, allowing them to refine their products and deploy them to our public chain; the other part is to incentivize project users, which essentially expands users' awareness and holdings of HSK, encouraging them to actively participate in the project's ecosystem and grow together within our public chain ecosystem.
Female Leaders in Crypto: Believing in Compliance, and Staying Up Late for Memes
Joe: Many public chains, such as Solana, Base, and TON, are placing great emphasis on memes. What is your perspective on memes?
Kay: Meme creation has now become a streamlined operation, with many behind-the-scenes operators being the same group, equipped with mature distribution and marketing systems. I do not deny the significance of memes, and I believe many friends have dug their first pot of gold in the crypto space through memes.
Sometimes I also stay up late browsing Twitter and chasing memes. I think this is a very wonderful aspect of the industry, reflecting the grassroots and community spirit very well. However, one point I want to share is that everyone should not take small investments, high returns, and certainty as a norm, especially when being cautious about leveraging. In the ongoing process of participation, improving your trading skills and market feel is the most important.
Joe: What problems do you think HashKey is currently facing that need to be solved?
Kay: What we want to break through now is to build a bridge between Web3 and Web2.
Our advantage lies in our deep understanding of both Web3 and Web2. Therefore, many times we need to do a two-way expansion, but this two-way bridge also means two-way communication, which is a very time-consuming process. Our original intention is not to raise funds or list tokens, but to allow everyone to participate, provide basic technical support, and explore together how to better bridge these two worlds and reach more user groups.
Joe: You are one of the few female leaders of a public chain. Do you think the Web3 industry is a relatively fair environment for women?
Kay: The Web3 industry rewards those who are curious about the world. We entered this industry based on this philosophy, and Web3 is still a relatively niche field, to the point where the barriers to entry are quite high. Therefore, those willing to invest and believe in this niche concept will be rewarded by this industry.
I personally have not experienced what is termed unequal treatment. At the societal level, there is a stereotype regarding women, such as a belief they may not have as good strategic vision and may lack some rationality, but women also have their advantages, such as attention to detail and friendly communication.
Excellent individuals have strong comprehensive abilities, and it is not determined by gender whether they are suitable; rather, it depends on the inherent qualities of the person and what kind of things they are suited to do. People still tend to view things and projects themselves.
Joe: Can you talk about your daily work schedule?
Kay: Because in the early stages of a project, everything progresses on multiple fronts. Internally and externally, there are many interactions; this is not about meeting just for the sake of meeting, but rather for better communication and coordination, so everyone will push forward through efficient meetings.
I wake up at 7:30 every morning, have a cup of coffee, do some exercises like Ba Duan Jin, and then start the morning meeting. I first hold cross-departmental meetings with other business lines, followed by our daily team meetings. In between, I also keep an eye on industry developments as I am a researcher and trader. I will check the industry news from last night during specific times, and I will read one or two substantial reports each day. As for trading, I keep it open at all times to monitor any information signals, and I still maintain my trading habits.
There are many communications needed with friends from project parties and industry peers during lunch and dinner. Personally, I am quite introverted; I will attend partner communication events, but if there’s nothing going on, I might just stay at home, do some exercise, watch a movie, and check the markets—very simple. Because I am an INTJ, I live a very straightforward, simple, and regular life.
Joe: This is a typical INTJ lifestyle.
Kay: Yes, every day I am training my large model.
Is HSK a quality asset?
Joe: HashKey Exchange has been operating for over a year now. Can you describe the current user demographics of the exchange?
Kay: From the perspective of the HSK community, there are still more users in Asia. Before and after the launch of the public chain this year, I traveled to key cities in Asia for roadshows. Regions like South Korea, Vietnam, Japan, and Taiwan have a very high awareness of HSK, and they provide us with a lot of good suggestions on how to expand our ecosystem. We will also be expanding regionally in the Middle East.
Joe: Did you buy HSK yourself?
Kay: Because I am an internal member of the project, my core team and I cannot trade freely. Any form of holding needs to be reported, which is an effective way to protect the rights of holders.
Joe: Which employees in your organization hold a significant amount of HSK? Will this create significant selling pressure on HSK?
Kay: Our economic model is designed such that 65% of tokens are allocated to users and public chain ecosystem projects. The team share is 30%, but this 30% is locked and will require approval for trading later. After three months, it will be released linearly over 36 months, so there is no need for everyone to worry about internal token supply affecting the market.
Our internal operation model is very open and transparent, not only based on our own moral baseline, but also because three out of four major audits each year are auditing us, ensuring both internal and external transparency. Overall, we tend to focus more on long-term development and grow together with everyone.
Joe: Currently, HSK's FDV is around $2 billion, and its market capitalization is approximately $200 million. It can be said that HashKey and its employees hold significant stakes. Can you elaborate on potential selling pressure?
Kay: The principle followed in the initial design of our economic model is to maximize user interests, based on the basic logic commonly accepted in the industry, such as ecological incentives and team incentives. The differences lie in several aspects.
The overall distribution structure is very simple, aimed at genuinely expanding the token holding community and incentivizing everyone to participate in the HashKey ecosystem. Specifically, the ecological incentive pool accounts for 65%, and team incentives account for 30%. The company itself does not hold primary tokens, nor do investors hold or unlock tokens. We do not raise funds in the form of tokens, so there will be no so-called VC tokens leading to inflated valuations and concentrated sell-offs. The unlocking period is very long; for the ecological part, we have set a 4-year linear unlocking period, and for the team part, aside from the lock-up upon launch, there is an additional 3-year unlocking period. I believe this is a very solid design in the entire industry, reflecting our confidence in long-termism and sustainable operations. In terms of institutional design, we have communicated with regulatory entities for two years, establishing a two-way exchange for reference and setting industry-leading standards for processes to avoid conflicts of interest and market manipulation, protecting user interests.
Currently, as an operator of a public chain, I feel a bit anxious. The public chain is set to launch on schedule, and next year is the year of RWA themes. The release rate of our tokens is still relatively slow compared to the demand for public chain-level scenario adoption. We will implement incentive plans to encourage users to participate and also explore ideas for market circulation.
Joe: HSK is the first compliant token in Hong Kong. How will it differ in design and model from other tokens?
Kay: As a project party, we have many considerations in the process of issuing tokens, and the issuance of HSK has undergone a relatively long process.
On one hand, we set very high demands on ourselves, and we have conducted thorough and in-depth thinking in terms of economic model design. As a compliant group and exchange, the tokens we issue must endow them with intrinsic meaning and value.
On the other hand, we want to create a new paradigm. We started preparing for the issuance of tokens two years ago, including multiple discussions with regulatory teams in Hong Kong and other regions regarding what tokens are, the significance of token issuance, and the process of issuance. We have also referred to many traditional industry perspectives on protecting investors and users during the issuance process. HSK is a native cryptocurrency with certain utilities that align with people's understanding of tokens. At the same time, we ensured the completeness of information disclosure during the issuance process, ensuring that everyone’s understanding of the information remains at the same level.
Our token issuance process and distribution design, along with all subsequent processes, adhere to the industry's highest standards. I believe that under compliant environments, the issuance of HSK will become an important reference standard for compliant enterprises issuing tokens. We choose to issue tokens in a compliant manner, providing an opportunity for outsiders to engage with the crypto space, and enabling them to view the development of the crypto industry through a compliant lens.
Joe: Last time, I asked you on Twitter Space to predict the price of HSK after its launch. You said it would be 1.2 USDT, and now the price has reached 2.1 USDT. I would like to ask again, what price do you personally think HSK can reach by the end of this cycle?
Kay: The entire group conducted equity financing in January of this year, and we did it based on a $1.2 billion FDV. Traditional institutions provided a very conservative valuation of $1.2 billion for the entire group's assets. Because HSK has a total issuance of 1 billion tokens, $1.2 is our value benchmark. Additionally, when we were financing, HashKey Global had not yet started trading, and the public chain had not launched. We assessed our value based on terms during a bear market in the first half of the year, so the overall valuation was low. In the design of the economic model, 65% of our tokens will be allocated to the community and users, and we have not conducted any VC fundraising.
Last time, 1.2 was mentioned regarding the token's valuation compared to our equity financing, which is about the same and unrelated to the listing price. After the launch, market feedback has been particularly positive, strengthening the heat in the market recently. The subsequent price discovery will still be left to the market. What we can do is to empower HSK as much as possible, such as more quality assets being listed on trading platforms, a richer range of products and application scenarios on the public chain, the adoption of various business lines, and expanding our influence on a global scale.
