Web3 Research

Far Weaker Concurrency Than Web2

Bitcoin peaks at ~7 TPS; Ethereum manages only tens of TPS. Centralized systems like Alipay handle hundreds of thousands of peak TPS. These are different technical paths: Web2 pursues efficiency and high concurrency; Web3 pursues decentralization and transparency. Each has trade-offs.

Pain Points That Drive the Narrative

Web3 precisely targets three major pain points of Web2 platforms:

• Privacy: Platforms collect user data without boundaries, stripping data sovereignty;
• Cost: Visa and Mastercard charge 2–3% transaction fees, keeping intermediary costs high;
• Control: Platforms monopolize traffic and rules, leaving users and small businesses passively constrained.

What sustains the industry is genuine demand from both sides: consumers seeking privacy, lower fees, and cross-border transactions; enterprises needing efficient settlement, tamper-proof data notarization, and new business model pilots. Demand is the core of Web3's viability — technology is merely the tool to meet it.

Regulation Is Inevitable

Unregulated anonymous transactions become breeding grounds for telecom fraud, cross-border money laundering, and illegal asset transfers. The core goal of regulation is to eliminate grey industries, enable compliant players to enter, and let technology serve the real economy.

HK 2025 Stablecoin Ordinance

• Issuers must register with HKMA under a licensed regime; user data retained at least 6 years;
• Priority for USD and HKD-pegged stablecoins; RMB stablecoins face dual mainland-HK oversight with extremely high approval thresholds;
• Short-term: weakens the "fully decentralized" label. Long-term: establishes a compliance framework enabling legitimate enterprises like JD.com to enter legally.

Global Divergence and Enterprise Response

• Strict regulation: Hong Kong, US, Singapore — emphasizing licensing, KYC, AML;
• Flexible regulation: Saudi Arabia, Dubai — low entry barriers, simplified KYC;
• Standard model: Dual-entity offshore structure — HK entity for licensed business + offshore entity (Middle East) for global coverage.

Polymarket: A Benchmark Case

• Model: Users predict real-world events (Fed rates, earnings, geopolitics) using stablecoins. Outcomes reflect collective global judgment — a real-time sentiment hub;
• Evidence: Coca-Cola "beat expectations" probability consistently above 80% on Polymarket, enabling profitable stock positioning based on that signal;
• Advantage: Information updates faster and market sentiment feedback is more direct than Bloomberg or Reuters.

The "Sell Shovels" Strategy for Enterprises

• Infrastructure play: Traditional enterprises (telecom, SOEs) should provide cloud and node hosting for Web3 projects — minimal compliance risk;
• Optimize existing operations: Distributed storage (user nodes as supplementary backup) and distributed computing (idle device compute for lightweight tasks);
• Risk isolation: No crypto/NFT issuance, no C-end trading platforms. Use standard HTTPS + transport encryption — provide the network pipe only;
• Tech basics: IPv6 is an address protocol (not a security feature), process vs thread, subnet mask, binary tree, scale-up vs scale-out.

Stablecoins vs Digital RMB — Digital RMB is a fully centralized CBDC outside Web3. Compliant stablecoins focus on cross-border settlement: SWIFT takes 3–7 days, stablecoins settle near-instantly. They serve fundamentally different use cases and are not substitutes.

On-chain Trading — True 24/7 settlement is the defining feature. US stocks have pre/after-hours sessions but weekend closure and thin liquidity. Real concerns include liquidity risk, flash crashes, and progressive regulatory crackdowns.

RWA (Real World Assets) — Enormous potential for fractional ownership of property, artwork, and bonds. But the bottleneck is not technological: on-chain "ownership shares" cannot map to offline legal title under existing law. Only enabling legislation can unlock scale.

AI + Web3 — Decentralized AI inference nodes, on-chain AI trading assistants, and data-rights AI aim to break Big Tech's monopoly. However, distributed AI faces coordination difficulty and slow iteration — still far from mass adoption.

Marketing & Narrative — "Web3 = next-generation internet" is a highly successful brand narrative. Distinguish pure narrative projects (no real application, short lifespan) from value projects (using narrative to address real demand). The promotional logic mirrors traditional marketing: identify pain points, craft value propositions, build narratives, validate with use cases.

Three Long-Term Tracks

• AI + Web3 convergence: Decentralized AI breaking Big Tech's monopoly; on-chain AI for smart contracts and risk monitoring;
• Compliant stablecoins: On-chain finance gradually normalizing as a complement to traditional finance;
• Real World Assets (RWA): On-chain mapping of property and bonds for digital fractionalization.

Three Core Challenges

1. Technical bottlenecks — mainstream blockchain concurrency cannot support mass commercial use;
2. Fragmented global regulation raises cross-border compliance costs;
3. Bubble risk — many projects lack real demand and viable business loops.

Five Key Takeaways

1. Essence: Web3 is a combination of value proposition, marketing narrative, and technical tools — not a generational upgrade;
2. Compliance: Full decentralization cannot work. Normalized regulation is the only path to industry maturity;
3. Business: All long-term valuable projects address real demand. Pure hype will inevitably die out;
4. Enterprise entry: Focus on infrastructure, strictly comply, use new tech to optimize existing operations;
5. Trends: AI+Web3, compliant stablecoins, and RWA are three long-term tracks requiring technology, law, and regulation to develop in tandem.