In recent years, with the popularization and rapid development of blockchain, the industry is gradually showing several trends that have attracted much attention. For example, capital markets accelerate the transition from analog to digital, demand for smart and digital centric solutions increases, B2C and B2B converge with digital switching and payments, and the growth of CBDC and payment use cases is coming online. So what surprises will the future bring?
Apply regulated DeFi in practice
Currently, many enterprises adopting blockchain technology are doing this using traditional centralized models. In contrast, decentralized exchanges and the broader DeFi game are now aware of KYC/AML concerns while increasing liquidity.
The Financial Action Task Force (FATF) guidelines state that distributed applications (DApps) will need to comply with specific country/territory laws that enforce FATF, AML and counter-terrorism financing requirements.
The guidelines require states to identify individuals who have "control or sufficient influence" over DeFi initiatives, which could result in the founders of these initiatives being subject to rules requiring them to provide information about beneficiaries in relation to transactions.
This will lead to a "regulated DeFi" in practice, which is seen as a necessary condition for DeFi to be more useful to institutions.
Related to this, the adoption rate of CBDCS will continue to rise, along with some form of regulation of the use of other digital assets, probably starting in the US. This will help reduce Fiat's payment frictions and inefficiencies, which is a good thing because traceability and credibility will protect consumers and make it cheaper and faster to transact. It would also create an environment in which more players move from down to up the chain, creating more democratization and financial inclusion despite the decentralized purist view of central authority.
The fusion of CeFi and DeFi results in HyFi
Centralized finance (CeFi) and decentralized finance (DeFi) will intersect in a regulated environment to support the convergence of traditional and digital asset activities.
Centralized and decentralized technology-enabled enterprises will co-exist through hybrid solutions (traditional and digital) as buy-side institutions, banks, brokers, exchanges and other capital participants increasingly adopt digital assets as part of the digital transformation agenda.
To support this, financial markets and digital asset infrastructure will become interoperable. One such example is a combination of centralized and decentralized exchanges to create a hybrid exchange (HEX). For example, it supports trading models like centralized exchanges (CEX) and decentralized exchanges (DEX) in a cohesive manner.
These will be part of the development of a hybrid digital marketplace infrastructure offering hybrid finance - HyFi!
Digital market infrastructure interoperability solutions gain more traction
Digital asset interoperability and time-to-market remain a challenge, with the traditional and multi-type blockchain digital asset infrastructure heavily fragmented.
We will increasingly see the evolution of solutions and services that bridge the gap between traditional and digital capital markets, while effectively mapping into evolving regulatory frameworks to enable mass adoption by institutional participants.
For the most part, institutional participants want to access digital assets in the same way as other asset classes. Ease of integration into what they already do is crucial.
To overcome these barriers and achieve greater efficiency in digital asset facilitation, financial institutions need to optimize their digital asset infrastructure.
To meet this need in a secure and scalable way, platforms that support cloud-enabled microservices through a distributed hub model, integrating private ledgers and public blockchains into traditional market infrastructures, will expand and thrive. This will facilitate better portability of digital assets and enable seamless trading, clearing and settlement.
Traditional exchange and post-trade operators will leverage these solutions for digital transformation as they seek technology - and knowledge-enhanced partnerships. They will no longer be able to ignore the intense interest in digital asset trading from retail and institutional investors, or the need to provide the market with a trusted digital asset infrastructure.
Generics, law and finance are intertwined
NFT's growth will continue in multiple areas, including sports, film, music, games, art, other collectibles and Metaverse related virtual assets.
The legal and smart contract framework will be innovated to address some NFT ambiguities related to intellectual property (IP), ownership and licensing rights. This would be a welcome development, legitimising and instilling trust in the sector, which in turn would drive even more accelerated growth in the sector.
This growth will also be aided by NFT and financial crossover. For example, we will see the creation of NFT portfolios to provide family offices with structured products and portfolio diversity, in addition to partial ownership opportunities for retail investors. On the other hand, the ability to tokenise such structured products and NFT funds, as well as create digital bonds to fund NFT projects that list and trade on digital asset exchanges open to crypto and statutory investors, will help inject more capital into the sector.
Data, analytics and artificial intelligence are combined with blockchain
The convergence of data, analytics, and ARTIFICIAL intelligence with blockchain will begin to drive smarter solutions in the future. For example, some companies know exactly what content people are watching, so they can buy more content and fund the creation of new content by predicting expected demand with high accuracy. They can also accurately assess the supply-demand dynamics of content on other local platforms and use this to address any gaps and opportunities in their own content offerings.
Imagine if this technology moved from B2C use to B2B finance for product development and ongoing management. This isn't the utopian world of science fiction movies, and it will soon be coming to a financial center near you via the cloud. When combined with AI-driven smart contracts and blockchain immutability, we will see an explosion of digital assets and traditional asset products tailored to the needs of retail and wholesale user bases.
In addition, as a global leading blockchain data and technology service provider, Oko Cloud Chain's rapid development has also attracted many people's attention. The company believes that blockchain technology, 5G, IOT, artificial intelligence, big data and other technologies are all part of the information age. 5G is like blood, IOT is the eye, blockchain is the artery, and artificial intelligence is the brain. Only when it is used in an overall way can it give full play to its value and solve the practical problems of user groups in the age of information revolution.
So is the big tech hub structure giving way to a more democratic, decentralized version? As previously predicted, the two will continue to co-exist for the foreseeable future.