Web3 Business Interview Episode 1
DigiFT - Building a third generation exchange
Moderator: KK - Hash Global Founder
Interview Guest: Henry - DigiFT Founder & Chief Executive Officer
summary
1. The importance of DigiFT in the Web3 business ecosystem
1. DigiFT is the world's first securitized token exchange licensed in the mainstream financial market that can seamlessly connect to the booming Web3 decentralized financial ecosystem. It can standardize various RWAs (various traditional financial assets and non-financial assets) and bring them to the Web3 financial ecosystem. It is an essential asset trading infrastructure for Web3 businesses.
(II) Blockchain exchanges have gone through three iterations. The first generation of exchanges is characterized by the fact that assets can only be bought and sold on the same platform. The second generation allows buying and selling between different platforms, but requires withdrawing coins to a third-party wallet and then recharging to another platform. The third generation of exchanges implements decentralized transactions on an open network, where users can directly buy and sell various assets on the platform, and can also perform operations such as lending. DigiFT is building a third-generation open asset exchange that can openly provide the core capabilities of the exchange: 1) KYC, 2) asset tokenization, 3) trading, and 4) deposits and withdrawals of fiat currency and digital currency to various asset owners and transaction demanders.
(III) DigiFT is using Web3 technology to tokenize various traditional financial and non-financial assets, giving these assets unprecedented liquidity and composability. Web3 businesses in various fields will create a large number of personal and institutional data assets during the business development process, and these assets can also be tokenized and listed for trading through the DigiFT platform.
(IV) DigiFT has multiple regional financial licenses and can conduct business in multiple countries and regions. The modular architecture can achieve plug-in technology output, improving the convenience and operational efficiency of the platform. In terms of compliance, DigiFT can provide functional modules such as compliant asset issuance, distribution and trading. For example, the deposit and withdrawal function in the distribution module is also part of the compliance module.
2. Discussion of tokenized assets
1. Tokenized assets will not change the risk-return of the assets themselves, but they can change their liquidity, thereby bringing benefits to the creators and platforms through enhanced liquidity.
(2) Since all tokenized assets are created with common standards (standard protocol groups on the blockchain), they can also be used in combination for various financial functions such as mortgage lending, greatly reducing the friction of cross-industry cooperation for traditional financial institutions.
(III) The issuance of tokenized assets is divided into two types: direct issuance and packaging issuance. DigiFT already has a complete process support.
3. Future development of DigiFT
(I) Standards, supervision and openness are the three most important features of DigiFT. In 2025, we will see a large number of institutions rushing into the market. DigiFT's goal is to improve the business closed loop of asset issuance, product launch and trading user growth, while expanding the asset side and user scenarios.
(II) DigiFT allows qualified investors to own all types of assets on one platform, including real estate, stocks, Bitcoin, Ethereum and other Web3 tokens, cultural assets, gold and other commodities. These assets can be tokenized by the DigiFT standard and provided to investors.
(III) Hash Global is creating a "Future Index" and plans to use this index as a carrier to provide investors with the most efficient and low-cost way to allocate the two most promising industries in the future digital economy: AI and Web3. This index product will be issued on the DigiFT platform, and investors will be able to subscribe using multiple currencies such as US dollars, new coins, Bitcoin, Ethereum, and US dollar stablecoins.
Conversation content (abridged):
Henry, please briefly introduce yourself and share with us how you joined Web3 and created DigiFT?
I come from a financial background and have worked as a director for China and Asia at Citibank, Standard Chartered and East West Bank. I was also the director of e-commerce at Citibank China. When I first came into contact with Web3, I realized that it had the efficiency and convenience that the traditional financial system did not have. In finance, many pain points have reached the limit of what can be solved, so I chose to join Web3.
I also feel the same way about the word "limit". When I first discovered that the Bitcoin transfer network can transmit value on the Internet just like we send emails, and complete the financial functions of traditional asset exchanges such as banks and securities companies, I was also greatly shocked. Henry, please introduce DigiFT again.
DigiFT is an asset exchange based on the open Internet, which allows people to buy and sell things directly with electronic wallets, such as government bonds or company shares. The platform uses blockchain technology, which means that there is no central organization to control everything, and everyone can manage their own assets. In this way, buying and selling things becomes simpler and freer, just as convenient as shopping online.
The openness here has important premises. First, DigiFT can help standardize all asset categories. Second, it must comply with current financial regulatory policies and operate in compliance.
Because I know DigiFT has a modular pluggable function, can you introduce it to everyone in detail?
Yes, just like Lego blocks, you can assemble different modules according to your needs. Some of these modules help you pay with various currencies, some let you sell things in different places, and some ensure that you buy and sell things according to the rules. This design makes it easy for sellers to reach more people who want to buy things, no matter what money these people use or where they are in the world.
In simple terms, DigiFT is like a big mall, but it is special because it allows you to buy things with money from anywhere in the world, and it also ensures that all transactions are safe and legal. Each small store in this mall can choose the services they want, such as how to collect money or where to sell things. Moreover, this mall is open, which means you can combine these services in any way you want, which is very free and convenient.
Yes, I want to further elaborate on why DigiFT can provide services that the original asset exchanges, or even Web3 asset exchanges like Binance and OK, cannot provide. Imagine if you want to buy various things, such as gold, stocks, cryptocurrencies, and even art, you usually have to go to different places, go to the gold exchange to buy gold, go to the stock market to buy stocks, and go to the cryptocurrency exchange to buy Bitcoin. But DigiFT is like a supermarket, you can buy all these things in the same place, and you can pay with all kinds of different money, whether it is digital currency or real paper money, such as US dollars or new coins.
Great! DigiFT can help you invest in the most worthy areas, such as Web3 and AI. You can invest in the best AI companies and Web3 projects in one product. We are working on product design in this area. And because Digi FT complies with global rules and laws, they can provide services to more people and large institutions, as long as you pass the identity verification (KYC), you can invest freely.
Platforms like DigiFT allow you to invest in anything you want using a variety of currencies, including Bitcoin, Ethereum, US dollars or new coins. You can invest in stocks, Web3 tokens, gold, art, and even peridot mines in one product. As long as these things can be standardized, DigiFT can help you turn them into tokens, and then you can buy and sell them in financial markets around the world, which is very convenient. In general, third-generation asset exchanges like DigiFT make investment freer, more convenient, and faster.
Yes, we will continue to provide some assets to investors through tokenization. Many people will ask why they should use tokens to buy the same asset. The advantage of purchasing assets through tokenization is that it does not change the risk and return of the asset itself, but it can significantly increase the use and efficiency of the asset. For example, when an asset such as a treasury bond is tokenized, it can be easily traded on the blockchain, allowing these assets to be liquidated in real time, providing 24-hour trading and settlement capabilities, while traditional finance is usually unable to liquidate on weekends and nights. . Tokenized assets can also be targeted to a wider investor base.
For example, tokenized assets can be used as collateral, such as for margin trading in cryptocurrency exchanges. In traditional finance, government bonds are often used as collateral because they are stable, liquid, and yield. Tokenizing government bonds means that they can be used for the same purpose in the cryptocurrency market while providing stability and yield, which is something that cryptocurrencies (such as BTC) and stablecoins (such as USDC) cannot provide.
In addition, tokenized assets can improve the efficiency of fund use. For example, if $10 billion of stablecoins are used as collateral but do not generate any returns, then this is a huge opportunity cost. If these funds generate 4.5% returns through tokenized assets, it will be a considerable additional source of income.
In short, tokenized assets provide liquidity, usability, and efficiency that traditional assets do not have, while maintaining the characteristics of the assets themselves and bringing users more usage scenarios and potential benefits. This is why using tokens to purchase the same assets becomes attractive.
That's right. If you go to a bank and buy a special investment product, such as UBS's money market fund, the bank will tell you that you can withdraw your money at any time. However, if you want to use this investment product as collateral to borrow money elsewhere, it will be very troublesome. Others don't know whether your investment is real, and it is not easy to go to the bank to confirm it. When you don't have money to pay back your debts, others can't take away your collateral: money market fund shares.
However, if we use a platform like DigiFT and turn investment products into tokens, the situation will be different. Tokens are standard assets that can be recognized by everyone on the Internet. Because they can be verified, they are standardized, and everyone has passed the identity verification (KYC). In this way, if you buy UBS's money market fund on DigiFT, your investment shares become very easy to mortgage and trade. You don't need to find acquaintances, you can just find someone on the Internet to cash out your investment, that is, turn it into cash.
Yes! Talking about future development, our work plan for 2025 mainly focuses on the following aspects:
1. Attract more institutions to participate. In 2024, we and some of the world's top institutions, such as UBS, began to participate and issue assets. This is an important development because it marks the recognition and cooperation of the industry. In 2025, DigiFT will continue to work with these institutions to attract more institutions to join. Build a closed-loop ecosystem to increase assets and users.
2. Continue to strengthen compliance and improve ease of use: DigiFT plans to make progress in compliance, ensure that it has the support of a license, ensure that all operations are carried out within the scope permitted by law, and provide transparent services.
OK, to sum up, DigiFT, as a third-generation asset exchange based on Web3, allows qualified investors to manage and trade a variety of tokenized assets on its platform after completing KYC, such as real estate, stocks, cryptocurrencies, cultural artworks, etc. Users have high flexibility in deposit and withdrawal operations on the Digi FT platform, and the standardized assets on the chain held by users do not need to prove their value through the platform, and can achieve liquidity and composability on any trading platform. This is the future trend of Web3 finance, and it will also promote the maximization of Web3's commercial value. Thank you Henry for your time today!
Question from the audience:
The possibilities and challenges of currency tokenization
The head of Noah International Online Wealth Management asked about the tokenization of fund products. They learned that unless they are the issuers of money market funds, other exchanges and personnel will not help them tokenize money market funds. Is this true?
A: There are two types of token issuance structures in the market: direct issuance and wrapped issuance. If Noah acts as a sales partner, it can purchase a large number of money market funds and then issue tokens in a "wrapped" manner. Currently, more than 95% of issuances in the market are in this packaging method. DigiFT can support these two issuance methods: one is direct issuance by a money market fund issuer like UBS; the other is an agency using a wrapped token to package the money market fund shares and then issue them.
Original link:
https://open.substack.com/pub/rpcchef/p/web3?r=6h1et&utm_campaign=post&utm_medium=web&showWelcomeOnShare=true
