Ten years to make a coin, analysis of the flywheel effect of HashKey ecological coin HSK

Author: Nancy, PANews

Last week, Trump's victory blew the horn of the crypto bull market. As Bitcoin took the lead in breaking through the historical high, market sentiment became more and more positive, and investor confidence gradually recovered, paving the way for the acceleration of the mainstreaming of cryptocurrencies. Unlike in the past, under the background of the gradually tightening global regulatory environment, the focus of this bull market has shifted to innovation and competition within the compliance framework.

A new cycle is bound to bring about a new narrative. For a long time, "compliance" was not a business that everyone could do. It was a consensus that it was costly and well-received but not popular, and there were naturally high barriers. But we must also face up to the fact that the era of regulatory arbitrage in Web3 has ended. After Trump was elected as the new president of the United States, he will inevitably lead a "policy bull market". "Compliance funds" from traditional financial institutions will enter the market as an incremental amount, which also means that the capital structure and competition landscape of the crypto market will undergo profound changes.

Based on this market background, HashKey Group announced that it will launch the ecological token HSK on HashKey Global, which is also the world's first "compliant ecological currency". As a carrier of the value of the entire HashKey ecosystem, the continuous empowerment of HSK will attract extensive participation from users in the global Web3 community.

Looking at the market, the well-known compliant exchange Coinbase has not yet issued a coin, and although offshore exchanges have platform coins, most of them are not compliant yet, and the space will become smaller and smaller in the future. In this way, HashKey, which is "compliant from the first day of birth", seems to have chosen to use HSK, the world's first compliant ecological coin, to explore the innovative boundaries of compliant business. This move is bold.

But just like Dr. Xiao Feng, Chairman and CEO of HashKey Group, who invested in Ethereum ten years ago, this is not a "snap shot" deal, but a "long-planned deal". According to the official introduction, HSK is not a simple " platform coin " of the exchange , but an " eco-coin " . The role of HSK is like the blood of HashKey , which revitalizes the entire HashKey ecosystem through continuous oxygen injection and energy supply, transportation value, and more.

The huge HashKey business empire takes 10 years to produce one coin, and HSK is the value capturer. The new round of value gears has already started turning.

Take it slow, it's faster

To understand the value support behind HSK, we must first understand the various pieces of the HashKey business empire.

Over the past few bull and bear markets, HashKey has established a global licensed exchange, investment and asset management, tokenization, infrastructure services and other fields. At the beginning of this year, HashKey Group completed a nearly $100 million Series A financing, with a valuation of more than $1.2 billion. Whether in terms of life cycle or business top-level, almost no project can surpass it.

Among them, the exchange business is the castle and core pillar of HashKey, and its compliance and high threshold constitute an insurmountable barrier. Tokensaition, Cloud and Capital are moats, and HashKey is committed to building them deep and wide, and has formed a huge ecosystem. HashKey Chain connects all existing ecosystems in series to form a system that can promote collaboration among strangers on a large scale. All ecological links promote each other and jointly provide nutrients and vitality for the castle business.

Let’s first talk about HashKey’s original intention - HashKey Capital. As one of the world’s top institutional asset management companies, HashKey Capital was established in 2018 and is also known as the “Asian a16z”.

According to reports, HashKey Capital will manage $1 billion in funds in 2024, and has invested in more than 600 blockchain projects, including recent investments in well-known projects such as Berachain, Babylon, Aethir, and Catizen. In the Bosera HashKey Bitcoin ETF and Bosera HashKey Ethereum ETF issued this year, HashKey Capital served as a deputy fund manager and jointly issued them with Bosera International. The positive externalities and good reputation that HashKey Capital has built over a long period of time have helped the brand build an indestructible moat.

The moat effect also helped HashKey develop its core business, which is HashKey 's castle - compliant exchanges. HashKey has compliance licenses in Hong Kong, Bermuda, Japan, and Singapore. The most well-known of them are two compliant exchanges, HashKey Exchange and HashKey Global.

HashKey Exchange started applying for licenses in 2019 and obtained licenses No. 1 and 7 in 2022. Judging from the development of major exchanges in the market, although HashKey Exchange is a latecomer, the brand effect of HashKey Group has made HashKey Exchange quickly accepted in the local market of Hong Kong and established a good reputation among overseas Chinese customers around the world. At present, the total transaction volume of HashKey Exchange has exceeded HK$535 billion, and the capital is about to exceed HK$6 billion. It is already the largest compliant virtual asset exchange in Hong Kong.

The time is neither long nor short. HashKey Exchange has been in Hong Kong for 5 years, accompanying the Hong Kong Web3 market to improve step by step, and crossing the river by feeling the stones together with the regulators. Today, the Hong Kong virtual asset market has entered the development stage from the prudent review period, and will even become a new compliance model for global virtual asset transactions in the future. HashKey Exchange has always been a "learning committee member" in it.

HashKey Global, an offshore compliant exchange that obtained a Bermuda license this year, has grown rapidly. It has achieved profitability within two months of its launch. As of November 11, according to the latest data from Coingecko, HashKey Global ranks 7th in global transactions, becoming one of the fastest growing licensed exchanges in the world in 2024.

Of course, the value of a compliant exchange is not just a few licenses, but also the key to supporting a series of unique compliance scenarios. For example, HashKey’s current main advantage of the fiat currency channel is irreplaceable, and in the future it may even be able to build a global banking channel, which has already begun to emerge in Hong Kong. For another example, narratives such as RWA , Payfi , and stablecoins all need compliance as a support to play their “ golden shovel ” role.

In addition, although the hidden costs and time costs of compliance are very high, which discourages many companies, the barrier advantages it brings are also huge, and it also has a " time compounding effect " . With the two flagship exchanges as anchors, HashKey has opened up the layout of the global matrix of Chinese compliant exchanges.

Based in Hong Kong, with a global perspective. In the regulatory competition in various places, HashKey is more easily accepted by locals due to its good reputation, and often requires a shorter review time before business development. This is the invisible advantage of native compliance - regulatory trust. For example, when applying for a scarce Bermuda license, it took only 3 months to pass the review. According to public information, HashKey has applied for licenses in Dubai, Europe and other places, and is expected to land at the end of this year or early next year.

The Eastern Coinbase is about to emerge. For reference, according to the latest data, Coinbase's market value has exceeded 80 billion US dollars, and its daily trading volume has reached 13.5 billion US dollars, which has far exceeded the overall market value of the Hong Kong Stock Exchange. The "similar views" layout of HashKey and Coinbase is bound to be full of imagination. According to CMC data, the current daily trading volume of HashKey's two exchanges is 150 million US dollars. Based on the proportion, the market value of HashKey Exchange has exceeded 1.4 billion US dollars. It is expected that with the passing of the era of regulatory arbitrage, compliant exchanges will further replace the market share of non-compliant exchanges. In the current market structure, the market share of non-compliant exchanges, compliant exchanges and Dex is approximately 75%, 15% and 10%, so it is inferred that compliant exchanges still have at least 75% of market development space.

Take it slow, it will be faster. Compliant innovative business models need time to accumulate. After years of hard work, the HashKey exchange sector will reap the rewards in this round of compliance policy bull market. Currently, the population of the Web3 industry is about 560 million. If compared with the 6 billion population of the Internet, it is roughly estimated that the overall business still has more than 10 times the space.

In addition, HashKey Group's Tokenisation, Cloud and other businesses are also closely linked. HashKey Tokenisation, a tokenization service provider, creates liquidity for Web and Web3 projects at all stages and provides unique assets for compliant exchanges, becoming a bridge connecting the real economy, supporting innovative technology and helping the construction of financial markets. The Tokenisation business has participated in the Hong Kong Monetary Authority's Ensemble project sandbox and will promote the development of industry standards for the tokenization market in Hong Kong.

HashKey Cloud provides professional, stable and secure blockchain services to global customers. Its node verification services cover more than 80 mainstream public chains, and its asset management scale reaches 1.2 million+ ETH, ranking top three in Asia and top ten in the world. ETH ETF Staking, which is being explored globally, can be completed perfectly within the company's business by HashKey Capital and HashKey Cloud, and is expected to become a new business growth point.

According to public information, HashKey has recently launched the public chain HashKey Chain. After a year of comprehensive internal testing, it has been opened to public testing. Users and developers can participate in the test through the official website hsk.xyz and become early supporters of long-termism. Thus, a full-stack encryption ecological platform has been formed.

It seems that HashKey's current business scale has far exceeded the US$1.2 billion valuation at the time of financing.

Ten years to develop an “eco-coin”

HashKey has always been the one who understands Web3 best in traditional finance and the one who understands compliance best in Web3 .

Among them, HSK reflects the value of the entire HashKey Group , shouldering the mission of building a bridge between encryption and traditional finance, connecting and integrating these two financial systems.

Ten years of hard work to make a coin, what is different about this coin? Regardless of the fact that "platform coins" have always been a hot business in the industry, for early investors, there is only a difference between making more and less money. On top of this, HSK has surpassed the concept of "platform coins" understood by ordinary investors, and has created the world's first "compliant ecological coin", empowering value in all business scenarios of HashKey.

First of all, HSK, as the native token and Gas token of HashKey Chain, will enable the long-term development and sustainable growth of the ecosystem. From the perspective of HashKey's benchmarking against Coinbase , HashKey Chain is the "HashKey version " of Base . As a full-stack crypto ecological platform, HashKey Chain is committed to helping Web2 companies seamlessly enter Web3, supporting core areas such as BTCFi, stablecoins, payment finance (PayFi) and physical assets (RWA). At present, the HashKey Chain ecosystem has attracted more than 150 projects, enabling companies to quickly experiment and deploy Web3 projects and connect global users by integrating payment, tokenization, lending and trading solutions.

In addition, as a medium for rewards, governance and transaction fees, HSK will be widely used in platform service fee payment, exclusive token priority purchase, public chain governance and decision-making, value-added services, cross-platform ecological cooperation, custody fee discounts or exemptions, node verification rewards, and research report releases. Users holding HSK will be able to enjoy a full range of encryption services from trading, investment to application deployment, connecting every core business of HashKey.

As the industry involution intensifies, technical, background and narrative theories are no longer the golden signs. The market is gradually turning to more practical value indicators, such as real adoption rates and revenue growth. The " value " given to HSK by the HashKey business landscape is destined to be fundamentally different from most of the " price coins " on the market that are at their peak.

In terms of token distribution, HashKey has also made many " long-term " attempts, such as de-firming, de -VCing , and returning to the community.

In the initial fundraising stage, HSK distributes initial chips through "gifts" and "ecological rewards" to reduce the actual circulating market value so that people who are truly passionate, make significant contributions and have a long-term vision can participate in the investment and share the benefits. In addition, in order to prevent the value dilution caused by token rewards, HSK introduces a destruction mechanism, which uses 20% of the platform's business profits to repurchase and permanently destroy HSK to ensure a steady increase in market value.

According to the HSK white paper, the total supply of HSK is 1 billion, of which 65% is used to support mid- and long-term ecological construction, 30% is allocated to the team, and 5% is used as a reserve fund. During the financing period, HashKey chose equity financing instead of issuing tokens to avoid short-term market fluctuations caused by VC selling pressure and ensure long-term development.

Eliminating the false and retaining the true, and crossing the cycle, are the strengths of the HashKey team. As the Web3 compliance market further expands, HashKey will surely be the leader. Therefore, the value foundation built by the core business lines of HashKey Group listed above is only static data. The value of HSK comes not only from the initial application itself, but also from the potential brought by HashKey's high growth rate.

This is not just a story about an “eco-coin”, but a journey about value creation and long-term growth.