LINE NEXT scores biggest Web3 investment in Asia of 2023

Pyth Network, an oracle network that provides a bridge between blockchain smart contracts and real-world data, has added pricing data related to stocks listed on the Hong Kong Stock Exchange (HKEX) to its service offering. Data covering 85 stocksIn a social media post, the project stated that it’s “bringing the Hong Kong market onchain.” In building out the future of finance, DeFi application developers need real-world data from traditional finance sources. Pyth Network confirmed that real-time data in the case of 85 stocks listed on HKEX is now live. In announcing the development, the company disclosed that price feed data is updated every 400 milliseconds and sourced from institutional-grade venues. Once added to the Pyth Network, the data is made available on a multi-network basis across in excess of 100 blockchain networks.Photo by Anne Nygård on UnsplashGateway dataHKEX data is perceived to be significant given that it is a major global exchange, while acting as a key gateway between global and Chinese markets. Pyth Network stated: “Whether you’re building trading strategies, structured products, tokenized portfolios, or simply want access to real-world stock prices from Asia’s financial gateway, these feeds bring Hong Kong’s equity market onchain openly, instantly, and permissionlessly.” In a blog post published to its website on July 28, Pyth Network outlined that this data addition accounts for data related to companies that have a combined equity market value of over $5 trillion. The project stated that this new data is “giving builders, traders, and protocols around the world direct, real-time access to one of the largest financial markets on earth.” Improving access to APAC equitiesThe project made the point that for many years, access to real-time data from the primary markets within the Asia-Pacific (APAC) region has been cost-prohibitive. It claimed that data terminals with this information can cost in excess of $30,000 per year. Pyth Network feels that with its market offering now incorporating HKEX market data, it is opening up access to this data for developers and DeFi protocol projects. This development is the latest in a string of updates that the project has brought about recently. Earlier this month, the project announced a partnership with tokenized real-world asset (RWA) provider Ondo Finance. The deal sees the duo oversee the launch of a USDY/USD price feed, which will be distributed by Pyth across 65 blockchain ecosystems. Similar to its latest unlocking of HKEX equity data, in June it enabled access to real-time onchain pricing related to the UK’s most actively traded equities. Going forward, the company states that “foundational market data will be open, composably integrated, updated in real-time, and available to anyone with an internet connection.” In March 2024, Pyth’s price feeds went live on Injective inEVM, an Ethereum Virtual Machine (EVM)-compatible layer-2 rollup developed by Injective Labs. At the time of writing, the unit price of PYTH, Pyth Network’s native utility and governance token, was $0.1204, according to CoinGecko data.

Japan’s FSA Joins Project Guardian of Singapore’s MAS to Explore Digital Asset ApplicationsThe Financial Services Authority (FSA) of Japan has announced its participation in “Project Guardian,” an initiative led by the Monetary Authority of Singapore (MAS), as part of their ongoing cooperation framework established in 2017 to boost fintech linkages. The FSA will be an observer in the project, which aims to explore the potential of digital assets.Photo by Joshua Miranda on PexelsExploring fintechProject Guardian, initiated by MAS in May 2022, aims to engage the financial industry in exploring the feasibility of incorporating asset tokenization, decentralized finance (DeFi), and other financial technologies. Together, the MAS and the participants of this endeavor aim to execute pilot projects, shape pertinent policies, and establish technical standards.For pilot projects, the MAS works with traditional financial institutions and fintech firms in Singapore and other jurisdictions to understand potential benefits and risks associated with digital assets. For policy development, the project participants strive to develop rulebooks and governance models, as well as to review the legal and regulatory frameworks that govern tokenized assets. These collaborations also seek to establish technical standards concerning trust anchors, which are qualified third-party authentication service providers; open networks; and institutional-grade DeFi protocols.Comments from officialsExpressing enthusiasm about the collaboration, Leong Sing Chiong, Deputy Managing Director of the MAS, stated, “We welcome FSA’s participation in Project Guardian. We look forward to greater public-private collaboration with FSA to support global efforts in developing a responsible and innovative digital asset ecosystem.”Mamoru Yanase, Deputy Director-General of the Strategy Development and Management Bureau at the FSA, also expressed delight at joining Project Guardian. He said, “We are delighted to join the Project Guardian. Decentralized financial ecosystem continues to develop in complexity, and it is important to address emerging risks. Blockchain technology including web3 has a potential to become a strong driver of innovation. We look forward to working with MAS, traditional financial institutions and FinTech firms to further enhance our knowledge in this area.”By participating in Project Guardian, the FSA and MAS are reinforcing their commitment to exploring the potential of digital assets while addressing regulatory considerations. This collaborative effort is poised to contribute to the responsible and innovative development of the global digital asset ecosystem.

Hong Kong Moves to Enable Retail Crypto TradeHong Kong’s Securities and Futures Commission (SFC) has moved to enable retail participation in crypto trading within the Chinese autonomous territory.The SFC has arrived at that determination, according to a report it published on Tuesday. The report, titled “Consultation Conclusions on the Proposed Regulatory Requirements for Virtual Asset Trading Platform Operators Licensed by the SFC (Note 1),” provides an overview of the nature of feedback the Commission received as part of its consultation process relative to virtual asset trading.Photo by Ben Cheung on PexelsRetail investor protectionIn the press release which accompanied the report, the Commission outlined that “a significant majority of respondents agreed to our proposal to allow licensed trading platform operators to serve retail investors.” On that basis, the SFC is moving forward in enabling retail trading of crypto assets through licensed virtual asset trading platforms effective June 1, and it’s setting out to do so while implementing a number of measures to protect retail investors.That will include ensuring that operators provide an appropriate on-boarding process. In the case of crypto asset projects, the SFC is determined to see to it that good governance is implemented, alongside enhanced token due diligence, admission criteria, and disclosures.In the statement, the SFC’s CEO Julia Leung, said that “providing clear regulatory expectations is the key to fostering responsible development.” She added that “Hong Kong’s comprehensive virtual assets regulatory framework follows the principle of ‘same business, same risks, same rules’ and aims to provide robust investor protection and manage key risks. This will enable the industry to develop sustainably and support innovation.”Specific conditionsOne item that the SFC’s new rule-book on virtual asset trading for retail investors outlines is a ban on crypto “gifts.” Effectively any promotions or incentives that lead with free gifts, and this will likely include token airdrops, will be prohibited.In terms of capital liquidity, virtual asset exchanges will be required to maintain a minimum of 5,000,000 Hong Kong dollars ($638,000) at all times as a minimum paid-up share capital. A Platform Operator must at all times maintain liquid capital which is not less than its required liquid capital,” the document outlines.Token due diligenceThe SFC acknowledged that it can be difficult for virtual asset exchanges to carry out due diligence on new tokens. With that in mind, it has incorporated a requirement for any new token to have a twelve-month track record before it can be considered to be listed to provide an indication of such things as supply, demand, maturity, and liquidity. In that way, exchanges have some data to work with in carrying out token due diligence.Smart contracts have been a point of weakness in recent years, with considerable sums lost through hacks that have exploited smart contract code vulnerabilities. To that end, the SFC insists that as part of token due diligence, new assets will have to undergo smart contract audits performed by independent assessors.Given that the spate of recent crypto platform failures implicated loss of customer deposits, the rule-book considers the need for segregation of client funds. Exchanges will need to segregate funds and can either hold them separately from the assets of the exchange itself or have them held in escrow.