OKX President Hong was invited to attend the “2024 Hong Kong Web3 Carnival” main forum on April 6, 2024, and delivered a keynote speech on “Responsible Innovation.” The full text of the speech is as follows:
(Background:
OKX Hong Kong Executive Director Frank: Opportunities, Risks, and Future of RWA Track)
This article is a press release written and provided by OKX and does not represent the position of the organization.
Good afternoon, I am honored to be invited once again to participate in the Hong Kong Web3 Carnival organized by Wanxiang Blockchain Lab and HashKey Group. This provides us with a great opportunity to come together and discuss how to build a healthy and sustainable Web3 ecosystem.
The topic I am sharing today is “Responsible Innovation,” but before delving into this topic, I would like to talk about two interesting sets of data.
The first set is “2 years” and “7 weeks.” In 2004, it took over two years for the first gold spot ETF to reach $10 billion in assets under management. In 2024, the first Bitcoin spot ETF approved by the U.S. Securities and Exchange Commission at the beginning of the year quickly surpassed $10 billion in assets under management in just seven weeks. These two form a very interesting comparison.
The second set is on-chain transaction data. For those who have experienced bull and bear markets in the capital market, there are various signals, some of which are noise, while others are significant long-term trend signals. The second set of data shows that the number of on-chain transactions has been steadily increasing since 2019, regardless of whether it is a bear or bull market. Even if we look back further, such as the past 10 years, the data shows a similar trend. Whether it is the Bitcoin network, Ethereum network, or others, the overall number of on-chain transactions has been steadily increasing.
These two sets of data tell us that there are noises in the market that should be ignored, as well as long-term trend signals that are worth paying attention to through price performance. I believe there is a long-term trend happening, which is that technological development is driving more and more activities to move to the chain and gaining more attention.
The first Bitcoin spot ETF accumulated the same assets under management as the first gold ETF in a shorter period of time, which shows the importance people attach to Bitcoin. As the first unique global digital currency network, Bitcoin provides people with the values of maximum transparency, control, and choice, all of which are brought by the unique technology of blockchain.
Returning to today’s topic, what does our industry represent? Since the birth of Bitcoin and Web3, the true spirit of the industry has always revolved around transparency, responsibility, and rights. How can we provide more transparency, responsibility, and rights through the enablement of technology, products, and solutions? This is our purpose here.
In the past two years of development, in addition to bringing the best applications as innovators, entrepreneurs, and builders, we are also learning and drawing from regulated industries to enhance transparency, responsibility, and rights by adopting their best practices. Next, I am pleased to share with you the development direction of OKX in these aspects.
Firstly, we increase transparency and responsibility through technology. Since November 2022, we have led the industry in the widely adopted Proof of Reserves (POR) program and built it into a monthly automated technical solution. We have been publishing monthly reserve proof reports for 17 consecutive months, and this is not just a simple repetition. In fact, we decided to update the POR program by accepting feedback and continuously improving it, as well as providing more technical support for the program. We have expanded the coverage of assets in the POR from 3 to 22 and publicly disclosed the 450K+ addresses we hold on-chain, openly allowing users to verify their ownership.
In addition, we are the first platform in the industry to adopt zkSTARK technology to ensure the integrity of the POR program through mathematics, cryptography, and technical guarantees, so that users can trust the program even without the involvement of third-party intermediaries. We believe this is an important step for industry self-regulation, using technology to bring more transparency and meet users’ expectations for traditional financial audit standards that centralized platforms can meet.
Secondly, we have invested heavily in Web3 technology and launched our self-custody wallet, the OKX Web3 Wallet, which has become a powerful one-stop Web3 gateway. We believe that by allowing users to have control over their private keys through the self-custody wallet, it is the most important way to reduce platform misconduct risks. Additionally, through hard work, we are committed to making the OKX Web3 Wallet provide users with more accessible public chains, DApps, NFT platforms, and DEX aggregators. We have done the heavy work of integrating these options to provide users with the most comprehensive and free choices, and all of this is currently free.
Like many other innovative technologies, in the early stages of technological development, the entry barriers are usually higher for new users who are not proficient in technology. Therefore, we are committed to technological solutions, and we believe it is crucial as a platform to make it simpler and more convenient for a wider audience to enjoy the benefits of new technology. Therefore, we are very pleased and proud to continue investing in convenient features such as account abstraction, MPC wallets, and social recovery brought by them to help more users use self-custody wallets without the need to remember and manage mnemonic phrases, and in the event of accidentally losing mnemonic phrases, they can continue to own and control their wallets through their chosen social contacts.
As a leading platform in the industry, the OKX Web3 Wallet has launched AA Smart Contract Wallet through the adoption of account abstraction technology, aiming to help our users trade and transfer between different chains with a simpler experience, faster speed, and lower costs. All the efforts we have made in our products are based on the belief that when providing customers with more choices in a simpler and safer manner, they will be more capable of making wiser decisions.
In addition, we also believe that a self-custody wallet is a purely technical solution, which is important for ensuring transparency. More transparency, of course, means more responsibility. In the OKX Web3 self-custody wallet, there are multiple open-source and audited modules that anyone can view our code on GitHub. If they are interested in security audits or want to provide feedback on these modules, we would be very welcome. These modules include but are not limited to account generation, transaction creation, transaction signing, and MPS algorithms.
We are proud of open-sourcing these modules and will continue to open-source more modules to receive feedback from the community. We believe that as a software and technology-driven platform, providing more transparency means more responsibility, which will bring more value to our customers and the community we serve.
As a technology platform, in addition to applying the latest technology to platform construction, we also recognize that as a centralized platform involving user assets, we have great responsibilities. Therefore, we believe that establishing appropriate internal control systems is crucial. We have been applying for licenses in many important and strategically significant jurisdictions, not only because it is important for our global operations and business, but also because we believe that the license application process is an important part of building internal constraints and balance mechanisms.
In the past 12 months, we have obtained the conditional approval and license from Dubai VARA and the principle approval of the Major Payment Institution License (MPI) in Singapore. These are important milestones that we are proud of, but they are not the end. These are acknowledgments of our efforts so far, and we are very confident that we are moving in the right direction. But more importantly, as an organization, we will strengthen governance, improve operations, collaborate with relevant departments and regulatory agencies, and use technology and tools to jointly combat financial crimes.
As a centralized platform, we will continue to adopt advanced technological means to ensure transparency with users, partners, regulatory agencies, and major stakeholders, and consider it as our important responsibility. One of our key global strategies is to ensure that we are transparent, responsible, and provide relevant permissions to our customers and stakeholders, so that we can better serve and contribute to the local community. Hong Kong is a location of strategic importance to us, and we are honored to be part of the Hong Kong Web3 ecosystem. We are also honored to build the Hong Kong Web3 ecosystem with many partners, stakeholders, and legislators. We will insist on localization to integrate into the Hong Kong Web3 ecosystem and make contributions so that we can make long-term investments and maintain compliance.
As an important participant in the industry, we are glad to be part of the industry, and we will continue to work towards building a healthy and sustainable ecosystem in the Web3 industry to create value. We look forward to bringing more transparency, responsibility, and rights to users and the industry through technology, and building a better future together. I am very optimistic about this. Thank you for your attention.
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