SafePal invests in & partners with Switzerland’s Fiat24

HashKey Report Outlines Risks of Liquid StakingLiquid staking derivatives (LSD) are not without their potential pitfalls according to a report published by Hong Kong’s HashKey Capital.Photo by Shubham Dhage on UnsplashLiquid staking exceeds $22 billionThe report, which was published by the digital asset manager and finance house in July, emphasizes the pressing need for enhanced decentralization to counteract the risks associated with this growing trend of liquid staking.The figures themselves are impressive. This year, the total value locked in the liquid staking derivatives market has surged past the $22 billion mark. Correspondingly, the market capitalization of LSD projects has skyrocketed to $18 billion, indicating a substantial influx of interest and investment.However, the growth that these protocols are witnessing also presents a dual-edged conundrum for the Ethereum ecosystem. HashKey Capital’s report underscores that despite the advantages these protocols might offer their respective communities and token-holders, they could potentially destabilize the Ethereum ecosystem in multifaceted ways.Centralization riskAs evident in HashKey Capital’s overview, several LSD protocols heavily rely on a limited number of node operators, effectively centralizing a significant portion of validator nodes. This centralization trend, as highlighted by the report, is a cause for concern. The concentration of node operators raises red flags, as it contradicts the fundamental tenets of decentralization that underpin blockchain technology.The report articulates the adverse effects of centralization in the realm of liquid staking. It points to the dangers of reduced competition and a heightened risk of censorship.The report raises an important caution: “There is a heightened possibility of censorship with centralized staking players, as they may be subject to incentives or regulatory pressure to censor transactions. This can potentially result in a disruption of the trust within the network.”Security threatsCentralization also ushers in security threats. The dominance of major staking players makes the Ethereum ecosystem more susceptible to 51% attacks. Furthermore, the potential for collusion among centralized stakers looms large, leading to actions that counteract the very essence of decentralization, such as front running and malicious maximal extractable value (MEV) susceptibility.However, amidst these centralization risks, HashKey Capital acknowledges that most protocols are in their nascent stages. Many of them have devised strategies to incorporate distributed validator technology into their protocols, a proactive step towards fostering greater decentralization and resilience.HashKey Exchange awarded retail services licenseIn an unrelated development, HashKey Exchange received approval on Wednesday to upgrade type 1 and type 7 licenses, allowing it to cater to retail investors in Hong Kong. This accomplishment comes a mere two months after the city introduced its Virtual Asset Service Provider (VASP) licensing framework on June 1.In this evolving landscape, HashKey Capital and OSL were among the pioneer licensed exchanges under the city’s earlier voluntary program. Now, the new regulations stipulate that crypto trading platforms must obtain a license to serve retail investors, further solidifying Hong Kong’s commitment to cultivating a thriving crypto ecosystem.As the HashKey Capital report and recent developments in Hong Kong demonstrate, there’s a lot in play relative to both crypto regulation, protocol design and new product innovation. The challenges posed by centralization in liquid staking underscore the importance of vigilance and corrective action. Meanwhile, Hong Kong’s aspirations to become a crypto stronghold offer a beacon of hope in an ever-evolving regulatory landscape.

Korean Securities Firms Unite to Build Shared Security Token InfrastructureShinhan Securities, KB Securities, and NH Investment and Securities are gearing up to sign a memorandum of understanding (MOU) later this month to establish a security token consortium, according to South Korean news outlet MoneyToday.Photo by Louie Nicolo Nimor on UnsplashShared infrastructureThe primary objective of this consortium is to create a shared infrastructure for their security token operations. This initiative marks the first instance where the nation’s major securities firms are getting together to set up a security token consortium. Until now, securities companies have typically sought collaborations with banks, fractional investment firms, or blockchain technology companies, showing reluctance to cooperate with their direct competitors over concerns of potential loss of competitiveness.An expert within the securities industry underscored the paramount importance of securing control over the infrastructure, particularly given that the security token market has not materialized. The expert further stated that once a collaborative network is built among the leading securities firms, it is likely to set the standards for the entire market. Meanwhile, the precise details of the plan have not yet been finalized.Challenges in prior initiativesSince the South Korean Financial Services Commission revealed the security token guidelines in February, the securities sector has been deliberating the creation of a shared network that would be accessible to all industry participants. This kind of system is considered ideal as it facilitates flexible expansion and cost efficiency. However, the discussion came to a halt due to conflicts between the Korea Securities Depository, the Korea Financial Investment Association, and fintech firm Koscom.Meanwhile, installing an independent network is not very feasible, given that it not only incurs significant costs upfront but also has limited potential for expansion. This is why these industry leaders devised an alternative strategy in which they can collectively share the financial burden. In addition, Shinhan, KB, and NH plan to explore joint business models with the aim of maximizing the utility of their security token infrastructure.

NFT Artists Coming to Seoul in September for The Gateway: KoreaThe Gateway: Korea, the world-renowned annual Web3 event held to celebrate the NFT community and digital artists, is set to take place next month as part of the sixth annual Korea Blockchain Week 2023. It will be held on September 7 to 8 at SFactory, a culture and arts hub in Seongsu-dong, Seoul.The Gateway has been organized by the Web3 digital media platform nft now since 2021. This year, it will be co-hosted by the blockchain community FactBlock, which is also the co-host of Korea Blockchain Week.Bringing realms togetherCentered around the theme of convergence — specifically, the convergence of man and machine, East and West, and URL and IRL — The Gateway: Korea aims to connect Web3 technology and Korean culture. It will feature activities such as interactive experiences and immersive galleries.Photo by fabio on UnsplashExploring digital art and visionary voicesThe event will also include various programs, including keynote speeches and fireside chats. Most notably, there will be an exhibition of works by famous digital artists like Beeple, who famously sold his NFT art piece titled “Everydays — The First 5000 Days” for a record-breaking $69 million two years ago at an online auction held by auction house Christie’s.Other invited artists include DeeKay, Emonee LaRussa, and Krista Kim, among others.“I am delighted that we are able to achieve global expansion through the September event in Seoul,” said Matt Medved, Co-Founder, CEO, and Editor-in-Chief of nft now.“Korea is experiencing an unprecedented moment where cultures from around the world intersect. This event will welcome leading creators and innovators in the Web3 field.”