Compiled by: Hash Global
Recently, KK, founder of Hash Global, and Ms. Peng Jing, Global CEO of Noah Olive, exchanged views on the development stages of Web3, the value of the BNB ecosystem, and digital asset allocation at the Noah Black Diamond Client Annual Meeting. The content is as follows:
Jing: Hash Global has been investing in Web3 since 2018, investing in both early-stage projects and the secondary market; we are an early node of the BNB Chain and have also launched a crypto fund for institutions and families. We have experienced the industry "full-cycle and full-chain." Looking back from 2018 to today, what in the Crypto industry has truly been disproven, and what is the long-term direction that you are increasingly confident in?
... KK: What I think has truly been disproven is over-construction driven by a visionary vision but detached from actual needs. Web3 has many things built on the premise of "I think the metaverse needs it, so I'm building it." This infrastructure will be abandoned, like the excessive undersea cables laid in the early days of the internet. In recent years, the Web3 industry has made many meaningful attempts, such as socialfi and gamefi, but none have yet taken off. I think these are examples of temporary disproven developments. I believe there will be another wave, and perhaps a third wave. Many things that were not feasible or mature at first will naturally become mature and feasible once the business environment and policies are ready, and there are enough real Web3 product users. In my view, the technology is already there; now it's about finding the weaknesses in existing business models and the real pain points in the first dimension, and having the right teams create new models. The AI industry is the same; development is a spiral process. Many things that are temporarily "disproven" may simply have been done too early. You couldn't have done what Yahoo did in 1990 or Google did in 1996; no matter how strong the team, it wouldn't have worked. This is an objective law of development. Over the past few years, we've seen this industry, despite occasional bubbles and falsehoods, steadily progressing and making significant strides every year. I often say that the Web3 industry is too close to "money," making entrepreneurs easily "distracted," unlike AI entrepreneurs who are more focused. Some former entrepreneurs may have left the industry, but many more are entering. I recently heard from a friend that this year's Wanxiang Shanghai summit had an exceptionally large attendance, the largest in years, even more than the Hong Kong Bitcoin conference. The Wanxiang Blockchain team and CEO Xiao Feng have been consistently driving the industry's upward spiral. Web3 technology has already demonstrated tremendous power in the financial and payment sectors, but as the infrastructure for the next generation of the internet, it hasn't yet seen large-scale application. Even some friends in the industry are asking whether Web3 is just a form of Fintech. We believe that the significance of Web3 for business is the same as that of Bitcoin for finance. The underlying ledger technology changes, and both finance and business will change. It's just that the Web3 user base is still too small to create a network effect. Web3 is a network technology, requiring a certain user base threshold to be reached, unlike the single-point technology of AI. AI is a productive force, explicit, while Web3 is a production relations technology; its emergence is subtle and gradual. Even our parents are using it, but they won't know it. Web3 applications now need to revolve around solving business problems. We have already seen some projects using Web3 technology to effectively improve the operational efficiency of internet products. While reducing costs and increasing efficiency, some entirely new business models are emerging. For example, fans and creators can be bound together through Web3 technology to verify and distribute profits. Because it's commercially viable, we are very confident in its long-term viability; it's just a matter of who will implement it first and who will scale it up first. Jing: What is BNB's role in the entire Binance ecosystem? From the outside, everyone knows Binance has exchanges, blockchains, Launchpad, and ecosystem projects, but they may not be clear about BNB's true role in this whole system. What is BNB's long-term "value anchor"? Where will BNB's focus in the ecosystem shift in the next 3-5 years? KK: BNB is Binance's ecosystem token and the core value carrier of the BNB ecosystem. If you pay attention, you'll notice that we generally don't say "Binance ecosystem" or "Binance ecosystem," but rather "BNB ecosystem." Let me give you an example to illustrate this. If Tesla hadn't yet listed on Nasdaq, I believe Elon Musk would have issued Tesla tokens on the blockchain. This would allow Tesla owners to use Tesla tokens for discounted charging at any charging station worldwide. Elon could use Tesla tokens to bind the interests of all ecosystem participants—shareholders, users, management, upstream and downstream partners—together, and it could also be used within the ecosystem of sister companies like SpaceX. In the Web2 world, it's difficult to integrate points between companies; however, Web3 points or tokens, being on a single ledger (chain), are naturally interconnected. Tesla tokens can also extend beyond Musk's business empire. This is a completely new organizational model that doesn't require complete decentralization to generate significant economic growth and emotional value for users. Once Tesla stock (data) leaves the Nasdaq and DTC (Depository Trust Company) databases and becomes on-chain tokens, various businesses worldwide can exchange value with Musk's business system through Tesla tokens, achieving verifiable business trust. In contrast, Tesla stock can only bind management and shareholders at most—this is the value of Web3 technology. How could Web3 be just Fintech? BNB is Binance's ecosystem token, and it's been running for eight years; our model is already there. Hash Global defines tokens like BNB, which have both value input and various functionalities, as value-utility tokens. We predict a surge in the number of utility tokens over the next three years. We recently released an academic report discussing blockchain integration and value-utility tokens. We also had Chairman Wang from Noah Holdings write a commentary on our report, which you can find online. The token IDOL from Meet48, a leading entertainment company we've invested in, is also a value-utility token, and we encourage projects to design their ecosystem tokens based on BNB. For a token to have value, its underlying business model must first and foremost be healthy and sustainable. BNB's value anchor has at least two aspects: 1) the various utilities within the ecosystem; 2) the value support provided by the BNB Chain and the Binance exchange. The core of the BNB ecosystem is BNB. Through eight years of exploration and practice, Binance has effectively concentrated various ecosystem benefits on BNB. The increased value of BNB, the core engine of the entire ecosystem, helps attract more users, facilitates the issuance and trading of more high-quality assets, and thus attracts more developers to build upon it. This engine is organically and efficiently bound to all parts of the BNB ecosystem. In our view, the efficiency and power of this engine are unparalleled in the industry. Binance recently obtained its full ADGM license in Abu Dhabi. The Binance exchange already has over 300 million users globally, while the entire BNB ecosystem, including BNB Chain users, has over 500 million users. This is a truly unique, and currently unparalleled, internet-like financial infrastructure. CZ, He Yi, and the Binance management team have, through eight years of hard work, built a massive financial behemoth capable of providing comprehensive services for the emerging AI-powered digital economy. When it emerges, it will inevitably clash with the existing financial landscape and institutions. During this process, the Binance team also endured a lot of pressure, and we even witnessed some unfair treatment against individuals. We should thank the Binance founders and team; their contribution to the development of Web3 finance and its ecosystem surpasses that of all other platforms. Because this path is arduous, filled with uncertainty and pressure that most people couldn't bear, requiring continuous innovation and sustained fighting spirit, we believe its growth path is difficult to replicate. All assets will be issued and traded on-chain in the future. This isn't my statement, but that of Paul Atkins, Chairman of the U.S. Securities and Exchange Commission. I'd like to add that this applies not only to financial assets, but also to all non-financial assets and many "assets" that cannot yet be formalized into assets. Many people may not know that many tokenized U.S. stocks can already be bought and sold on-chain, and more than half of the global trading volume occurs on the BNB Chain. BNB has effectively become the primary pricing tool for many digital assets after they are put on-chain, rather than being priced by stablecoins. And a new stablecoin, in order to gain liquidity and achieve scale growth, also needs the support of Binance. In the next 3-5 years, in this new era of blockchain connectivity, we believe the BNB ecosystem will be the biggest beneficiary, with all assets seeking liquidity support from the BNB ecosystem. BNB is not only the driving force of the BNB ecosystem, but also the engine of the entire Web3 ecosystem and the digital economy. Jing: How should families and high-net-worth clients "get on board for the first time"? In a global multi-asset portfolio, what is a reasonable allocation range for Web3/Crypto as a whole? KK: I think that after an investor has allocated low-risk, safety-preserving assets such as insurance, gold, bonds, and real estate, they should allocate a certain proportion to growth assets. Among growth assets, we are most optimistic about AI and Web3. Professor Zeng Ming said that the upper layer of future intelligent business is the productivity brought by AI, and the underlying large-scale coordination network can only be Web3. In my view, AI and Web3 are two sides of the same coin in the digital economy. Let me explain with an example: Everyone is optimistic about the future explosion of agents, but the value exchange between agents cannot be through bank accounts, but only through on-chain addresses provided by Web3. During Binance Blockchain Week, we just co-hosted a machine economy forum in Dubai with Nasdaq-listed Robo.AI and the Arkreen team, a leading Web3 project in the machine economy field. The value exchange between machines can only be through Web3. Therefore, I suggest that growth assets should be allocated half to AI and half to Web3. Jing: From the perspective of family offices and high-net-worth clients in 2025, what three main themes would you use to summarize the main investment opportunities and risks over the next 3-5 years? KK: 1) First, I think the risk, and also the opportunity, for traditional investors in the next 3-5 years may lie in under-allocating to Web3 and over-allocating to AI. Given the high level of consensus in the AI industry, while the Web3 or digital asset industry is noisy and receives little attention, I think we should subconsciously increase our allocation to digital assets. 2) Secondly, investors may be overly focused on finding Alpha and neglecting Beta. In fact, it's very difficult to outperform BTC or BNB in the Web3 industry, just as it's very difficult to outperform Nvidia and Google in the AI industry. Therefore, investors must first seize Beta opportunities and avoid missing out on leading assets. Look at the leaders of the internet era; they remain leaders in the mobile internet era and even the AI era. How many times have they increased in value?! By occupying the leading positions, they have fully enjoyed the dividends of technological development and the advancement of the times: Google, Microsoft, Amazon, Alibaba, Tencent, etc. The same applies to Web3; you must first seize the leading and core scarce assets, and once you have them, don't let go. These are the most valuable assets, and in my personal opinion, their importance even surpasses that of assets like real estate. The third opportunity and risk is insufficient attention to the Web3 industry. Everyone knows what the AI industry is all about. You might be bombarded with research reports daily, and you might be intimately familiar with the financial data of Nvidia and Microsoft, but is all that operational data really important? Leave that to Noah's professional team. You can take some time to learn about Web3. If you bought BTC, did you really understand it? If you had truly studied it, you probably wouldn't be asking me, "Is it a good time to buy BTC at this price?" Friends who follow the Web3 industry sometimes ask me what I think of Coinbase and Circle stocks. I say I don't know much about them, but they should be good. I actually wonder why no one ever asks me what I think of leading digital assets like BNB. I suggest you spend some time learning about digital assets like BNB. You can find YZi Labs' research report on BNB online, as well as our research report, "Valuation Methods for Value-Functional Tokens." Believe me, while many may not fully grasp the value of Bitcoin (BTC), if you can understand Coinbase's research reports, you'll definitely understand BNB's analysis. For me, the difference between buying Coinbase stock and buying BNB is similar to the difference between Suning stock and Alibaba equity in 2009: one is a traditional company using internet technology, the other is a native internet company. They are not comparable; the native value creation model of new technologies is far more valuable. Coinbase is good, and you should invest, but since you're bullish on Web3 and digital assets, you should prioritize native Web3 assets. Last week, I spoke with two large investment institutions in the Middle East, and the consensus was that BNB is the elephant in the room. Everyone must pay attention to BNB. I've worked in the traditional asset management industry for over ten years. I believe BNB is the most undervalued digital asset, and at the same time, it's relatively easier for traditional investors to understand and accept. Warren Buffett called Bitcoin a "rotten apple," but if given the chance, I'm confident I could persuade him to buy BNB. Everyone should seize this asset opportunity in the next decade. I think BNB is like Moutai stock in 2004. Before 2004, only retail investors who drank Moutai knew how good it was. After 2004, institutions started seriously studying and researching Moutai and began building positions. Now, only people in the Web3 industry know how valuable holding BNB is; outsiders don't feel it or realize BNB's core position in the industry. I'm telling you, institutions are starting to look at it now. VanEck, a major US asset management company, recently submitted a product application for a BNB ETF in the US. For such a high-growth, high-yield, monopolistic asset, you invest and just hold it for ten or twenty years. Currently, institutional holdings of BTC are 12%, ETH is 9%, and BNB is only 0.4%. You can look at the stock price trend of Moutai after 2004. It increased more than tenfold in four years. Part of the increase was due to its own performance growth, but the greater increase actually came from institutional consensus. Institutional opinions are contagious. Jing: Within Crypto, how should BTC/ETH/BNB and other assets be layered and allocated? KK: We've been saying for many years that BTC, ETH, and BNB are the three "one of its kind" assets in the digital asset industry. Within their respective categories, they are unique. All three assets have high long-term value; they are actually completely different things. Specifically, I would suggest 40% BTC, 20% ETH, and 40% BNB. I recommend a high allocation to BNB mainly because holding BNB yields better ecosystem benefits, and the BNB ecosystem develops much faster and more efficiently. I believe that in the short to medium term, BNB can completely surpass the value of ETH. Ethereum's value will likely only become clear after the Web3 ecosystem has fully developed, perhaps in ten years? By then, everyone will understand just how much we truly need a fully decentralized infrastructure to unfold. There's a sequence to this, and it's also uncertain. I must state that I'm very bullish on ETH, and we hold ETH. However, in the business world, whoever can provide better services and solve real-world problems is often more valuable. Holding BNB currently yields over 10%, with 3-4% burned annually, totaling nearly 15%. This return stems from BNB's core position in the Web3 industry, a position similar to Nvidia in the AI industry. Everyone knows Nvidia exists in the AI industry; I'm telling you, the Web3 industry also has its Nvidia. With a little more time spent learning, everyone can discover this massive Beta potential for the next decade. The most appealing aspect is that traditional large institutions are only just beginning to understand it, much like the institutions that started looking at Moutai in 2004, even though those fund managers didn't drink Moutai before.