AMA Recap with Jun Fang, a Senior Blockchain KOL
Q3: What do you think of Coinbase's Base testnet launch, and how do you believe it will impact the competition among layer 2 solutions?
Fang Jun: Who has been one of the most popular public chains in the past few years? It's not EOS that we talked about four or five years ago, not Polkadot, Cosmos, or even Polygon. It's BSC (BNB Chain). Actually, it has now become three chains. The first one is the consensus chain/beacon chain, the second one is the chain for executing the entire BSC application, which includes various applications such as Swap, NFT trading market, DeFi, lending, etc. Recently, they have also launched a storage chain called BNB Greenfield.
BSC is brought up before COINBASE because many transitioning from centralized platforms to blockchain believe they have to use Ethereum. However, Ethereum's costs are high, while BSC has attracted many developers and applications due to its low cost, as well as substantial assets through Binance.
Similarly, Coinbase has invested in numerous projects prior to this and may continue to attract more applications to its Base chain through investments. Secondly, it may bring tens of billions of assets to this chain through bridging, giving it the same two advantages that BSC had at that time. The only difference is that BSC was at its peak in the market back then, while Base is currently in a market downturn. However, this is not a concern as it can gradually build up its infrastructure over time.
It's important to consider more than just the chain itself while analyzing Base. In fact, recent news regarding Base has two important aspects. Firstly, Base has attracted significant attention in its own right. Secondly, it's been promoted by OP because the Base chain uses OP's Rollup framework, known as the OP Stack.
Does this mean that OP will have more opportunities? No, not always. Instead, we should focus on the underlying technological behind it.
OP Stack is built on top of the Ethereum platform using Geth as its client. Initially, OP attempted to develop their own client, but they eventually modified Geth to meet their operational needs, resulting in OP Geth. Although there are some differences in code, the majority is the same as Geth. This approach promotes the mutual advancement of technology within the Ethereum ecosystem, making it increasingly powerful.
So I think we should take into account three factors when evaluating the Base chain. First, whether the Base chain itself is viable and how it may affect Coinbase's stock price. Second, how it may impact OP. And third, how it may affect the entire Ethereum ecosystem. As of now, it could be beneficial for all three parties. Additionally, it may have a certain degree of impact on BSC, Polygon, and Arbitrum.
Q4: What impact will the Ethereum Shanghai upgrade have on the future of crypto trading?
Fang Jun: In summary:
- Pay attention to the LSD price and its impact on the Joint Staking Platform;
- Pay attention to opportunities for node operators;
- Pay attention to innovation in re-staking, with EigenLayer being the driving force.
Q5: Will the market see black swan events like last year? What other potential risks are there? Including regulatory risks, such as today's (February 24th) news that the Australian regulatory agency is investigating BINANCE Australia's derivatives business.
Fang Jun: Black swan cannot be predicted, there are clear "gray rhinos" in the market that have been ignored despite their potential to cause problems. Currently, there are two main regulatory risks, I personally believe local regulations like those in Australia will not have too much impact, the most crucial one is in the United States.
Messari's founder aims to "bring down" the SEC Chairman, citing the agency's policies as a significant influence on the blockchain industry. The classification of Ethereum (ETH) as a security is a critical question with potential implications for the broader crypto market.
In the past, when the consensus mechanism was based on PoW, it was clear that it was not a security. However, with the switch to PoS, it raises the question of whether it is compliant for a centralized platform to offer PoS staking services. Recent SEC regulatory actions suggest that they consider such practices non-compliant. The compliance of joint staking remains uncertain.
Whether Ethereum is deemed a security is a crucial question. Even a partial classification as such could lead to a prolonged period of regulatory uncertainty, hindering innovation and investment in the industry.
(WEEX Note: On February 27th, SEC Chairman Gary Gensler stated in an interview with the New York Times that almost all types of cryptocurrency transactions, except for Bitcoin, are considered securities transactions under SEC jurisdiction. These tokens are securities because there is an intermediary involved and the public expects profits based on the actions of that intermediary. Behind these cryptocurrencies, there are people using various complex and legally opaque mechanisms, but at the most basic level, they are trying to promote their tokens and attract investors. Bitcoin, on the other hand, is fundamentally different from other cryptocurrency projects due to its unique history and creation story.)
The second question is whether transactions on Ethereum will be subject to the long-arm jurisdiction of US law. Logically, we don't think it should be. However, recently, when a US lawyer sued a related project, he argued that these transactions occurred on Ethereum, and since so many nodes on Ethereum are operated in the US, US law applies to all transactions on Ethereum.
Currently, many nodes are discreetly complying with US regulations and following the limits established by the US Office of Foreign Assets Control (OFAC), in order to avoid being directly associated with it. Two major uncertainties exist for cryptocurrency traders dealing with Ethereum (ETH). Firstly, whether the US will classify ETH as a security, and secondly, whether Ethereum transactions are subject to US laws. As yet, there is no clear resolution to either issue, leaving traders at risk. (Note: Paradigm's general counsel suggests that PoS ETH is not a security, and A16Z has been lobbying the US government. Until a definitive resolution is reached, traders should be cautious when dealing with ETH.)
Prize-winning Q&A.
Q1: Who is the global brand ambassador for WEEX?
A: Wu Chung-Hsien.
Q2: Which regulatory licenses has WEEX currently obtained?
A: US MSB, Canadian MSB, and Saint Vincent and the Grenadines FSA.
Q3: What is the maximum leverage for WEEX BTC USD/ETHUSD contracts?
A: 200x.
Q4: What is WEEX's Twitter ID?
A: English Twitter: WEEX_Official; Chinese Twitter: weexglobal_ch.
Q5: What are the current ongoing activities of WEEX?
A: 1) Profit surge, add code to get 1 million U prize pool; 2) Buy coins and add codes for returns.
User Interaction Session
Q: As the CPA principle continues to exist, the congestion issues of Ethereum will persist, and L2 will also exist. However, with the increase of users, will the congestion of L2 and gas fees be similar to those of Ethereum?
Fang Jun: After the transactions are transferred to L2, dozens or even more transactions are combined into one, which is called Rollup. Therefore, the transaction capacity is increased. In addition, the current EIP-4844 expansion and Danksharding expansion will store transaction data in data blobs, so each mainnet block can accommodate more transactions, including L2 transactions. Therefore, L2 will greatly increase transaction capacity.
Q: Currently, there are more and more Layer 2 networks on Ethereum, and as their volume increases, they gradually compete with Ethereum. Will the market share of Layer 2 surpass Layer 1 in the future?
Fang Jun: In recent days, there have been instances where the number of transactions on Layer 2 exceeds that of Layer 1, and this trend will continue to increase. Gradually, the number of transactions will be concentrated on Layer 2. However, the transaction amount will still be larger on Layer 1 for a considerable period of time, and its role will be as a settlement layer.
Q: Some have dubbed 2023 as the year of AI. What are your thoughts on the potential for AI to be hyped up further? Is there still a significant space for speculation?
Fang Jun: The combination of AI and blockchain has not found its point yet. There are some possibilities, such as integrating the ChatAPI interface as a service, which is an application layer approach, or building a distributed network for computing power, which is an infrastructure layer approach. But overall, it is still too early. AI and blockchain are two different technological directions.
Q: Some have dubbed 2023 as the year of AI. What are your thoughts on the potential for AI to be hyped up further? Is there still a significant space for speculation?
Fang Jun: AI and blockchain have not yet found a point of convergence. Possible approaches include integrating ChatAPI as a service or building a distributed computing network. However, it's too early to determine their full potential as they are two different technological directions that require more research and development to find a meaningful connection.
Q: What impact will the Hong Kong license have on the industry?
Fang Jun: Introduction of the Hong Kong license is positive. Previously, some activities were non-compliant but now a specific range has been designated. However, if the range is too narrow, it could be negative. Currently, the range appears limited.
A: "Q: Both DEX and CEX platforms have their own platform tokens, do you think WEEX can issue its own platform token in this market? WEEX has already established a certain level of strength and ranking influence, right? Fang Jun: Platform tokens are already a mature model. To be honest, no one knows how new platforms should approach this issue. What is certain is that the approach from four or five years ago is no longer applicable, and even the governance token model of Uniswap (without empowerment) is being criticized by many.
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