In the process of stepping into the Web3 era, China and the United States chose different ways. Compared with the United States, China’s Web3 companies, for sure, are facing more regulations, causing the market iteration slow. However, we believe China will accelerate the openness and development of Web3 regulations in the next decade.
Web3 (Web 3.0), not like Web2, embraces hotshot concepts such as blockchains, cryptocurrencies, and NFTs. The term has been in talk for over two decades, and now, with the development of decentralized technology, people find its potential to dominate the next internet era. In the Web2 era, ownership and value of user data are monopolized and controlled by major platforms, while in the Web3 era, the Internet will be dominated by users, with tokens as links. Despite high replacement costs and network effects concerns, netizens’ pursuit of independent and self-control rights will eventually lead to a new age.
According to Emergen Research, the global Web 3.0 market size reached USD 3.2 billion in 2021 and is expected to register a CAGR of 43.7% in the future decade. Meanwhile, the capital market also rushes to the trending field as they always do. According to CB insights, in 2021, the investment amount of global Web3-related (blockchain) start-ups reached USD 25.2 billion, surging 700% compared with one year ago. In terms of the larger picture, an increasing number of Web3initiatives launched by governments of various countries provide endorsements to the field.
In the process of stepping into the Web3 era, China and the United States chose different ways. In the United States, the market has become the world’s main guiding direction of Web3 development, with a robust innovation environment and a leading and complete Web3 infrastructure chain. Essentially, individualism and egoism have become the main endogenous driver in the field of Web3. In terms of policy, beginning in 2020, the US government assigned different supervisor institutions according to tech and product categories, including SEC, CFTC, FDIC and FED. However, the regulations are still less intensive compared with other markets. All these have promoted the further development of Web3-related industries in the United States.
Unlike the United States, China’s Web3 development focuses on data sharing and industrialization, playing down its financial characteristics. Web3-related technology, especially blockchain, naturally has the characteristics of easy financialization and anti-supervision, further considering China’s unique internet environment (low cost of telecom frauds), making government-led projects the inevitable path of development in China. Several state-owned rising stars have emerged, such as China’s blockchain-based service network (BSN), Xinghuo blockchain infrastructure and facility, chainmaker and other new infrastructures. In February 2022, 16 government departments jointly carried out the pilot work of state-owned blockchains. In May 2022, China directly released opinions of the Supreme People’s Court on strengthening blockchain applications in the judicial field (Chinese: 《最高人民法院关于加强区块链司法应用的意见》), marking China’s incorporation of blockchain technology into the field of legal governance. As for the most crucial application of virtual currency in Web3, although China has had a blanket ban on tokens, China has introduced legal virtual currency, E-CNY (DC/EP), guaranteed by national reputation. The pilot work of E-CNY has been extended to 23 regions in 15 provinces. Compared with the United States, China’s Web3 companies, for sure, are facing more regulations, causing the market iteration slow. Nevertheless, we believe that in the next decade, China will accelerate the openness and development of Web3-related industries under the pressure of international competition.
On June 15, 2022, Hurun Research Institute released Hurun China Metaverse Companies with the Greatest Potential 2022, which comprises the 200 Chinese companies and teams continuing to develop metaverse technology. The list includes tech giants such as Tencent, Alibaba, Baidu, NetEase, Huawei, China Mobile, China Telecom, GoerTek, Xiaomi, JD.com, and ByteDance also contains some growing players with great potential.
GrowthEase is a one-stop enterprise service provider backed by NetEase Group and has 25 years of experience in AI, big data, communications, audio and video technologies. GrowthEase is committed to offering digital content risk control, integrated communication PaaS, all-in-one service and marketing SaaS to over 1,000,000 clients in social media, entertainment, gaming, retail, government, and finance industries. The firm launched three platforms, including CommsEase, GuardEase and BizEase. We think GrowthEase is the key for NetEase to fight back its leading position in the Web3 era.
Guangzhou NINED Digital Technology Co., Ltd was established in June 2014. It is a leading high-tech enterprise in the domestic VR industry, integrating R&D, production and application. It relies on independent R&D of intelligent hardware and VR customized service product system. NINED Successfully landed the first B2B2C innovative business model in the domestic VR industry and is committed to providing customers with the richest VR experience scenarios. The company has 100+ Intellectual Property Rights and 100+ original VR content and has already expanded to North America, Europe and Southeast Asia.
SequoiaDB has been developing its native distributed databases in the past decade, mainly serving customers in the financial industry. The company’s product SequoiaDB is a financial-grade distributed relational database. Its self-developed native distributed storage engine supports total ACID, has an elastic expansion, high concurrency and high availability, and is compatible with MySQL, PostgreSQL, and MongoDB. As the first company to deploy distributed database products in China, SequoiaDB has been widely used in over 100 financial companies, including Bank of China, PICC, ICGB, CSDC, Harvest Fund, Bank of Shanghai and government departments such as The People’s Government of Guangzhou City.
If you want to learn more about the trends of overseas expansion, join us in Manhattan on July 29-30, WIM (World Innovators Meet) 2022 and we will hold a panel, “A Look Into Future Global Dynamics of Web3, DeFi, and Blockchain”. We invited people from many industries with skillful knowledge of overseas expansions to the panel to share their thoughts about cutting-edge biotechnology. Meanwhile, you could interact with like-minded business leaders, investors, scholars, and international relations experts on the key issues and opportunities facing U.S-China business collaboration and investments.
Over the course of 2 days, hear from speakers on the past, present, and future of innovation and exchange between China and the world–from trends in Blockchain, IoT, AI, 5G, Biotech and Fintech for 10 sessions, and network with 175 attendees representing top institutional investors, venture funds, and investment firms.
