OKX President Hong was invited to attend the “2024 Hong Kong Web3 Carnival” main forum on April 6, 2024 and delivered a keynote speech on “Responsible Innovation”. The full text of the speech is as follows:
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OKX Hong Kong Executive Director Frank: Opportunities, Risks, and Future of RWA Track
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This article is a press release written and provided by OKX and does not represent the position of the platform.
Good afternoon, it is my honor to be invited once again to participate in the Hong Kong Web3 Carnival organized by Wanxiang Blockchain Lab and HashKey Group. This provides us with a good opportunity to come together and explore how to build a healthy and sustainable Web3 ecosystem.
The topic I will be sharing today is “Responsible Innovation”. But before delving into this topic, I’d like to discuss two interesting sets of data.
The first set is “2 years” and “7 weeks”. In 2004, it took over two years for the first gold spot ETF to reach $10 billion in assets under management. In 2024, the first Bitcoin spot ETF approved by the U.S. Securities and Exchange Commission achieved over $10 billion in assets under management in just seven weeks. These two cases present a very interesting contrast.
The second set is on-chain transaction data. For those who have experienced bull and bear markets in the capital market, there are various signals, some of which are noise and some are significant long-term trend signals. The second set of data shows that on-chain transaction volume has been steadily increasing since 2019, regardless of whether it’s a bear or bull market. Even if we look at data from the past 10 years, similar trends can be observed. Whether it’s the Bitcoin network, Ethereum network, or others, the overall on-chain transaction volume has been steadily growing.
These two sets of data tell us that there is noise in the market that should be ignored, but there are also long-term trends that are worth paying attention to based on price performance. I believe there is a long-term trend happening, where technological developments are driving more and more activities to move to the chain and garnering more attention.
The first Bitcoin spot ETF accumulated the same amount of assets under management as the first gold ETF in a shorter period of time, indicating the importance people place on Bitcoin. As the first global digital currency network, Bitcoin provides people with the values of transparency, control, and choice, all made possible by the unique technology of blockchain.
Returning to today’s topic, what does our industry represent? Since the birth of Bitcoin and Web3, the true spirit of the industry has always revolved around transparency, responsibility, and rights. How can we provide more transparency, responsibility, and rights through the enablement of technology, products, and solutions? That is our purpose here.
In the past two years of development, in addition to bringing the best applications as innovators, entrepreneurs, and builders, we have also been learning from regulated industries to enhance transparency, responsibility, and rights by adopting their best practices. Next, I am honored to share with you the future development direction of OKX in these aspects.
First, we increase transparency and responsibility through technology. Since November 2022, we have pioneered the widely adopted Proof of Reserves (POR) program in the industry and built it into a monthly automated technical solution. Currently, we have published 17 consecutive monthly reserve proof reports, and this is not just a simple repetition. In fact, we have decided to update the POR program by accepting feedback and continuously improving it, as well as providing more technical support for the program. We have expanded the coverage of POR assets from 3 to 22 and publicly disclosed the 450K+ addresses we hold on the chain, allowing users to verify their ownership.
Furthermore, we are also the first platform in the industry to adopt zkSTARK technology, ensuring the integrity of the POR program through mathematics, cryptography, and technological guarantees, so that users can trust the program even without the involvement of third-party intermediaries. We believe this is an important step towards industry self-regulation, using technology to bring more transparency and meet users’ expectations for traditional financial audit standards from centralized platforms.
Secondly, we have invested heavily in Web3 technology and launched the self-custody wallet, OKX Web3 Wallet, building it into a powerful one-stop Web3 gateway. We believe that allowing users to control their private keys through self-custody wallets is the most important way to reduce platform misconduct risks. Additionally, through hard work, we are committed to making OKX Web3 Wallet provide users with access to more public chains, DApps, NFT platforms, and DEX aggregators, etc. We have done the heavy lifting of integrating these options to provide users with the most comprehensive and free choices, and all of this is currently free.
Like many other innovative technologies, in the early stages of technological development, the entry barriers for new users who are not proficient in technology are usually high. Therefore, we are committed to providing technological solutions. We believe that as a platform, it is crucial to make it easier and more convenient for a wider audience to enjoy the benefits of new technology. Therefore, we are delighted and proud to continue investing in convenient features such as account abstraction, MPC wallets, and social recovery that help more and more users use self-custody wallets without the need to remember and manage mnemonics. In the event of accidental loss of mnemonics, users can continue to own and control their wallets through their chosen social contacts.
As a leading platform in the industry, OKX Web3 Wallet has launched AA Smart Contract Wallet through the adoption of account abstraction technology, aiming to enable our users to trade and transfer between different chains with a simpler experience, faster speed, and lower costs. All our efforts are based on the belief that when providing customers with more choices in a simpler and safer way, they will be more capable of making wiser decisions.
In addition, we believe that self-custody wallets are a pure technological solution, which is important for ensuring transparency. More transparency means more responsibility. In the OKX Web3 self-custody wallet, there are multiple open-source and audited modules that anyone can view on GitHub. If they are interested in security audits or wish to provide feedback on these modules, we would welcome it. These modules include but are not limited to account generation, transaction creation, transaction signing, and MPS algorithms.
We are proud to open-source these modules and will continue to open-source more modules to receive feedback from the community. We believe that as a software and technology-driven platform, providing more transparency means more responsibility, which will bring more value to our customers and the community.
As a technology platform, in addition to applying the latest technology to platform construction, we also recognize that as a centralized platform involving user assets, we have a great responsibility. Therefore, we believe that establishing proper internal control systems is crucial. We have been applying for licenses in many important and strategically significant jurisdictions, not only because it is important for our global operations and business, but also because we believe that the license application process is an important part of building internal constraints and balance mechanisms.
In the past 12 months, we have obtained the conditional approval and license from Dubai VARA and the principle approval for the Major Payment Institution License (MPI) in Singapore. These are important milestones that we are proud of, but they are not the end. These are acknowledgments of the efforts we have put in so far, and we are confident that we are heading in the right direction. But more importantly, as an organization, we will strengthen governance, improve operations, cooperate with relevant departments and regulatory agencies, and use technology and tools to jointly combat financial crimes.
As a centralized platform, we will continue to adopt advanced technological means to ensure transparency with users, partners, regulatory agencies, and key stakeholders, and take it as our important responsibility. One of our key global strategies is to ensure that we are transparent, responsible, and provide relevant permissions to our customers and stakeholders in order to better serve and build in the local community. Hong Kong is a strategically important location for us, and we are honored to be part of the Hong Kong Web3 ecosystem. We are also honored to be able to work with many partners, stakeholders, and legislators to build the Hong Kong Web3 ecosystem. We will adhere to localization to integrate into the Hong Kong Web3 ecosystem and make contributions so that we can make long-term investments and maintain compliance.
As an important participant in the industry, we are pleased to be part of the industry, and we will continue to work towards building a healthy and sustainable ecosystem in the Web3 industry to create value. We look forward to bringing more transparency, responsibility, and rights to users and the industry through technology, and jointly building a better future. I am very optimistic about this. Thank you for your attention.
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