The Asian Order Flow Nobody Is Chasing

Transcript

Right, so let's get started. So, thank you for coming. Um my talk is going to be the Asian order flow nobody's chasing. So, brief introduction of myself. My name is Daiki. Uh leading um BD side of the debt for side, which is the Japanese yen CDP stable coin, which is not yet launched, so you guys never heard of it. And uh I previously working at Uniswap Labs international growth team and then um design and execute uh GTM strategy across APAC. I am Japanese, so I also actively contributing to the local regulation, which is um currently there's a bunch of the program

in uh to making uh local regulation, so I was kind of actively contributing to the regulation, which will be like the usage of the DeFi will be also included. And also I run the Asian by data from the East Asian from Lido Finance. So, that's brief introduction of myself. I don't go I don't go deep into the introduction of the debt for side, but I'm going to just get you two numbers. The first one is the Japanese monthly debt and bottom is the total value of Japanese stable coin issuance. So, there's a huge gap. So, like we are kind

of trying to close the gap so that like more and more money will be deployed on chain. So, I'm going to start talking about the market and the current market structure, which is firstly like let's start by understanding of the current market. We Ethereum is in is losing all value into the Solana and the layer two. To more specifically, we lose This is like recent um one month data. We lose about 4.6 million into Solana. We also lose 7.6 million into Arbitrum and we also lose another 5.8 million into Tron.

We had some inflow to from Base, but this is too tiny to cover the other major three outflow. Then we see bunch of the collaboration from DeFi protocol such as Eura is collaborating with Securitize to bring real world asset as a collateral of lending. And also Uniswap also has a partnership with Securitize and BlackRock to to trade BUSD, their stable coin, will be traded 24/7 in the case of B.

As a person who working at Uniswap Labs, I see this trend as you know, the same same problem with what we saw that Ethereum is losing the value to layer two and the Solana. So, previously at Uniswap Labs, we had one of the the one of the KPI internal KPI we had is a total the share of trading volume in a single chain. So, for example, how many percent of trading volume will be done within the Uniswap Labs ecosystem Uniswap ecosystem against PancakeSwap or like Aerodrome, whatever.

But this KPI is make no sense at this moment because Ethereum itself is losing the value. So, no matter how we had we successfully maintain the share of the trading volume, if the Ethereum the TVL of TVL of Ethereum itself is losing, it make no sense. So, that's why I assume the headquarter of Uniswap Labs decided to think about what kind of order flow we can bring outside of the blockchain and then deploy this asset within the Uniswap ecosystem.

I see same motivation in the Eura. So, that's kind of how I see the current market, how I see the trend of real world asset coming into DeFi. This is all about how to survive within in in the in consideration of Ethereum Ethereum ecosystem itself is losing the value into layer two and Solana. So, the problem here is like a lot of the protocol are chasing a same order flow basically, which is trying to capture the off-chain value within the within like

traditional finance sector in the United States but like you know what? Like Uniswap has been discussing the collaboration of collaboration in between Securitize and BlackRock over lump and half ES. So, if you guys new to like real world asset and then trying to start negotiating with like these like major United States certified, it's too late. So, in if like bunch of the protocol trying to chase like trying to like capture the value from like United States, it's too late, unfortunately. So, that's why I would like to bring

the new market, which is Asian market. So, brief introduction of Asian market, I basically would like to talk about the three countries, Japan, Korea, and Singapore because of like these number. Um the house deposit, which is basically like mentioning that the how many amount of the value is captured in like individual house. The total number is like 9.5 trillion in like these three countries. And average cost of cross-border payment is like way much huge uh huger than the case of Europe and the United States. And also the AUM of international um AUM of like

institutional and company across APAC is like that much huge, like 28 trillions. So, that's I would say that's a huge market and then that these like institutional company in APAC, they are start to thinking about like how to deploy capital on chain, what they got to do. But the problem here is like in the APAC, we have no major DeFi protocol, unfortunately. So, most of the like globally recognized protocol is based in the Europe or United States.

But if you look into the Asian market, the needs of needs from TradFi, which is like the needs the need of they would like to utilize their asset into on chain. These um needs is uh emerging, but the problem is like there's a huge problem, which is like the DeFi protocol is based in the United States and the Europe. But like these protocol supposed to absorb their needs from APAC, but they the DeFi protocol doesn't understand like proper doesn't properly understand like the emerging needs from APAC. So, that's why like I would like to um

shrink the gap of like informational informational gap throughout this throughout throughout this talk. So, after talking a lot with a lot of the protocol a lot of the DeFi protocol, I found like three major bottleneck, which is first one language barrier. So, you know, we Asian the English is like not like primary language for most of us. And the regulatory uncertainty is another problem. Most of the country the regulator is just sit sit and await the MiCA and the country act like how these like framework will

be settled down. Like they are just like sitting sitting and await. So, like that's another problem. And the last is a challenge of the localization. I would say if you would like to do some community based strategy, that's not going to work here because like the for me like community based strategy is something you going to throw your money into trash bin. Because even though no matter how your your effort based in the community based strategy is, firstly, you have to localize. You have to translate all of the your website.

You also have to um promote your product into within in your in in local languages such as like Korean, Japanese, whatever, and Chinese. And then you also have to empower local ambassador as same power as the your main social account. So, like this is something like too much. So, I would say like community based strategy is not something appropriate when you like to reach out to the APAC market. Otherwise, just focusing I just suggested focusing on the 2B marketing and 2B strategy.

So, the case of Japan like how to proceed with 2B strategy is that first one is like the POC. So um in Japan this year is pretty much in poem because the regulation is going to be changed. Currently, there is a law which trying to cover variety of the blockchain sector, but usages of the DeFi is not recognized. It's not like their mind. So, the situation is about to change. The amended law coming to force this summer is going to cover the DeFi, but the problem is like regulator doesn't

doesn't fully understand the DeFi. So, one of the feasibility I see is DeFi protocol is start a POC with Japanese financial institution. I don't recommend DeFi protocol to establish legal entity here in Japan because of the ambiguity. So, just set the local financial institution on the front line and then let them use your protocol as a part of the POC. And then like could co-create design, co-create the framework that that you guys would like to

like that you guys request into the Japanese market. Like you don't have to take any risk, but just let the Japanese financial institution take the risk. So, this is like one of the feasibility. And then like these like Japanese financial institution will directly talking to the regulator. And then like you can control over like how you can create a DeFi friendly framework. And also, uh it's pretty much notable to mention that SMBC Nikko, one of the largest Japanese certified securitized security firm is loan they just launched like um DeFi focusing department in this February.

So, like this is one of the like easiest way I see across APAC if you like to like dive into the um APAC country. And also, um Japan has like huge market in terms of the stablecoin potential and um personal financial asset which is basically idling in a bank account. Talking about Korea, Korea is also a huge market because the um the income if you look into the population the more than like 30% 32% of the individual having a crypto exchange account which is like larger than the equity the total number of equity

account. And also, stablecoin law in the stablecoin is also about to set. So, if you guys um also like looking to like stablecoin market in Korea, the Korean won stable market Korea won stablecoin market will be also the one feasibility. If you uh like global financial conglomerate, Singapore will be the ideal way. Unfortunately, in the Singapore market the retail usages of the DeFi and the regulation of the DeFi is not ready in compared to the the market in Japan the the case of the Japan and the Korea but the Singapore is a one of the unique

country in terms of they trying to collaborate with like global financial conglomerate and then trying to the governance itself the government itself is trying to do something with like financial conglomerate. So, um if you like to like create like more broader regulation and framework, Singapore will be much more better. But if you are like a DeFi protocol if you are like a stablecoin issuer if you are like a DeFi real world asset if you are doing some business in a stable real world asset Korea and Japan is much more feasible.

So um let's summarize the So, the language barrier it it doesn't justify like the if you hire any person who can speak both local language and English, that'll be totally fair. And then if you are worried about like regulatory ambiguity that's also fine. Just start POC with your ideal market. And then yeah, some of the people say that the building the relationship with Asia local Asian financial institution is like really much harder than the case of the the collaboration with the company in the United States or Europe, but that's

also fine if you do any POC with like local financial institution that will accelerate this gap. And also, um this year is like going to be massive in terms of like framework design across any APAC country. So, if it's looks like you will be either the first banging or let other protocol to penetrate the market you would like to dive in. So, like first move can um structurally dominate the fee share. So, like this is one thing I would like to bring here in the ECC, you know.

Once again, like the layers of like financial institution across APAC like they really wanted to use utilize their asset on chain, but like they have to collaborate with DeFi protocol which is not basically based in the same area. So, So, the path is pretty much simple. Firstly, you got to choose the market either Japan, Korea, Singapore and then like structure one POC and then let's see how it goes.

But if you So, this is like basically the the like high-level view of um to be like strategy, but if you look into like retail strategy, I think like Vietnam and the Thailand is also like growing in time growing huge in terms of user base. So, um that's will be that that I don't cover like the retail side of basically, but um that's also another feasibility. So, that's it. Um if you would like to um reach out to like any of the APAC market, um just reach out to me in a Telegram or X or like I will be uh stay staying here for a while. So,

let's talk. Thanks so much. If you have a any question, I would like to I'm happy to take it. Cool. Thanks.