Hong Kong zeroes in on tokenization as corporate crypto holdings climb

The U.S. Securities and Exchange Commission (SEC) approved the spot bitcoin exchange-traded fund (ETF) last Tuesday, prompting South Korean investors to flock to cryptocurrency exchanges to make transactions. However, the revenues recorded by these exchanges showed a mixed performance in response to this development due to their differing transaction fee policies, according to local news outlet DealSite on Monday.Photo by Maxim Hopman on UnsplashTrading volumes surge and retreatAccording to crypto analytics platform CoinGecko, as of 9 a.m. on Jan. 12 (KST), Upbit's trading volume on Dec. 11 and 12 was approximately $5.1 billion and $6.1 billion, respectively, for a total of about $11 billion. During the same period, Bithumb recorded $2.6 billion and $2.4 billion, respectively, totaling nearly $5 billion. However, as of this writing at 11 a.m. on Jan. 15, Upbit’s 24-hour trading volume has dropped back down to $2.1 billion and Bithumb to $874 million. "After the SEC's approval, crypto exchanges were simultaneously flooded with transactions," an anonymous industry employee commented. "Bitcoin and Ethereum were mainly traded." Fee divergenceAlthough the ETF approval caused a general uptick in trading volumes, the amount of revenue that the exchanges earned from transaction fees varied. Upbit charges a fee of 0.05% for both buying and selling crypto, meaning the exchange made an estimated KRW 14.8 billion in revenue from the fees from Dec. 11 to 12. Bithumb, on the other hand, hasn't earned any revenue from trading fees since its zero-fee policy was implemented in October last year.  Bithumb had previously charged 0.25% for transactions and 0.04% with coupons. By implementing the former, the exchange lost about KRW 15.8 billion ($12 million) in revenue, and with the latter, it lost about KRW 2.5 billion. For crypto investors, Bithumb's zero-fee policy has made investing more accessible, but the exchange is unlikely to reap its own rewards. Significant investor interestMoreover, with trading for the spot bitcoin ETF beginning on the 11th, the influx of funds is expected to boost trading. "All told there were 700,000 individual trades today in and out of the 11 spot ETFs," Bloomberg ETF analyst Eric Balchunas told X (formerly Twitter). "For context, that is double the number of trades for $QQQ." $QQQ refers to the Invesco QQQ ETF. According to an image that accompanied Balchunas’ post, the total trading volume across all 11 spot ETFs was reportedly $4.3 billion. Grayscale's GBTC had the highest volume at $2.1 billion, followed by BlackRock’s IBIT at $1 billion and Fidelity’s FBTC at $673 million.

The blockchain gaming realm witnessed another milestone moment as "Heroes of Mavia," the mobile gaming sensation backed by Vietnam-based Skrice Studios, set the stage for a token airdrop on Tuesday, according to an announcement by the studio. Top free mobile game on AndroidJust days since its launch on both Apple and Android platforms, "Heroes of Mavia" has surged past the milestone of 1 million downloads, with an impressive 230,000 daily active users already immersed in its captivating world. Garnering acclaim as the top free mobile game on Android devices in China and dominating the Google Play store charts in Nigeria, the game's ascent continues with high rankings in Poland, Finland and Canada on Apple's App Store, according to Skrice Studios. While the quest to propel blockchain gaming into the mainstream remains a formidable challenge, "Heroes of Mavia" is already carving a path to success. Joining the ranks of ambitious gaming ventures vying for mainstream acclaim, including "Star Atlas," "Illuvium" and "Shrapnel," its promising trajectory is marked by its early triumphs.Photo by LinkedIn Sales Navigator on Pexels100,000 benefit from airdropA grand total of 100,000 players have earned eligibility for today's token airdrop of the MAVIA token, with a generous allocation of up to 6,250,000 tokens available for claim, representing 2.5% of the total token supply of 250 million. With a valuation soaring to $100 million, Skrice Studios stands as a testament to its remarkable growth since its last funding round two years ago, which saw an infusion of $2.5 million led by Crypto.com Capital. The studio's ascent was further fueled by a $5.5 million seed round in 2021 spearheaded by Binance Labs. In total, Skrice Studios has amassed $9 million in funding, as disclosed in its latest statement. The studio's enduring appeal has attracted notable venture capital firms keen on blockchain gaming, evidenced by its seed round in January 2022. Led by Binance Labs, that round also saw participation from esteemed investors such as Genblock Capital, Delphi Digital, Mechanism Capital, Alameda Research and Animoca Brands, among others. In a strategic move to ensure the sustainability and vitality of its in-game economy, "Heroes of Mavia" officially enlisted in Machinations’ Game Economy Health Monitoring Service. The Machinations platform can be harnessed to design and predict game economies and systems for play-to-earn blockchain games. Drawing parallels to the iconic Clash of Clans, "Heroes of Mavia," captivates players with its strategic depth, emphasizing base building, resource management and immersive tactical combat. The highly anticipated "Heroes of Mavia" token commenced trading at 7 a.m. ET on Tuesday on major exchanges such as Bybit, KuCoin and HTX, debuting with a unit price of $1.83. As of the latest update, the token is trading at $3.62, signaling a promising start to its trading journey. Blockchain gaming emerged through projects such as Axie Infinity, developed by Vietnam’s Sky Mavis. Engaging gameplay didn’t factor in the first play-to-earn iteration. However, through projects like Heroes of Mavia, 2024 could prove to be very different. 

KISA to establish blockchain trust framework for public servicesThe Korea Internet & Security Agency (KISA) is developing a system called the Korea-Blockchain Trust Framework (K-BTF) to facilitate the development and operation of blockchain-based public services, said Lee Kang-hyo, a senior official at KISA, during the 2023 Blockchain Grand Week on Wednesday (local time).Blockchain Grand Week is an event hosted by the Ministry of Science and ICT and jointly organized by the National IT Industry Promotion Agency (NIPA), the Korea Internet and Security Agency (KISA) and the Institute of Information and Communications Technology Planning and Evaluation (IITP) to promote the value of blockchain technology in enhancing trust in the digital age.Photo by Philipp Katzenberger on UnsplashPrevious roadblocksKISA has executed over 100 blockchain pilot projects over the last five years, but only a few have been carried out due to significant costs and interoperability barriers between services. According to the agency, it costs KRW 450 million (approximately $348,000) to carry out one project. Therefore, it has shifted its focus to making development easier and supporting data interoperability between services.“Developing blockchain-based public services entails building a blockchain platform, developing services and connecting them with government legacy systems,” Lee explained. “Blockchain developer APIs are becoming standardized overseas, and we thought it was time for us to leverage such advantages as well.”Another challenge was that previous blockchain-based public or governmental services did not offer smooth user experiences (UX), often requiring the installation of separate wallets or applications with each use.Bringing cost-efficient, user-friendly public blockchain servicesTo address these issues, KISA decided to focus on three key areas for building K-BTF — cost reduction, convenient development and usability — with an overall groundwork that covers interfaces, services and security while minimizing intrusion into the private sector.Once the K-BTF is established, government agencies will be able to easily plan and operate blockchain-assisted services such as decentralized identifiers (DIDs) and non-fungible tokens (NFTs). The costs for development will be determined based on how much a given service is used instead of the original base cost of KRW 450 million.Also, public institutions tend to go through staffing changes quite often, and building services under K-BTF will enable governmental operations to run normally without any roadblocks or inconveniences caused by such changes.Lee went on to mention that although a wide array of services can be built on the framework, there will be basic requirements in terms of functionality, performance and security that must be fulfilled for a service to run on it. To verify this, the KISA established a testing and certification system that utilizes its Cloud Security Assurance Program (CSAP) certification system and the Information Security Management System (ISMS).To improve usability, the framework will require users to install only one digital wallet that stores digital forms of identification and various authentication certificates.The KISA is set to start working on the K-BTF next year. Notably, it plans to create a governance system consisting of government agencies — those that are the demand clients for the framework –, private corporations and related experts. Six core services that will employ K-BTF have already been selected after a review of 34 pilot projects proposed in 2021 and 2022 and major national blockchain projects from six overseas countries. These six services are NFTs, DIDs, data origin authentication, data history tracking, Blockchain as a Service (BaaS) and digital wallets.Lee emphasized that the goal of the K-BTF is to derive services that can be used by the public sector within regulatory and technological boundaries.