OKX President Hong: Leading industry transparency with responsible innovation
OKX President Hong was invited to attend the 2024 Hong Kong Web3 Carnival main forum on April 6, 2024, and delivered a speech on the theme of Responsible Innovation. The following is the full text of the speech:
Good afternoon everyone, it is an honor to be invited again to participate in the Hong Kong Web3 Carnival event co-organized by Wanxiang Blockchain Labs and HashKey Group. This provides us with a good opportunity to gather and discuss how to build a healthy and sustainable Web3 ecosystem. .
The topic I share today is Responsible Innovation, but before delving into this topic, I want to talk about two sets of interesting data.
The first group is 2 years and 7 weeks. In 2004, it took more than two years for the first gold spot ETF to reach $10 billion in AUM. In 2024, the first Bitcoin spot ETF approved by the SEC at the beginning of the year quickly exceeded $10 billion in assets under management in just seven weeks, creating a very interesting contrast.
The second group is on-chain transaction data. For those who have experienced bulls and bears in the capital market, there are various signals in the market, some are noise, and some are significant long-term trend signals. The second set of data shows that the number of on-chain transactions has been growing steadily since 2019, both in bear and bull markets. Even if we look further back, data from the past 10 years, for example, shows similar trends. That is, whether it is the Bitcoin network, the Ethereum network, or others, the overall number of on-chain transactions has been growing steadily.
These two sets of data tell us that there is noise in the market that should be ignored, and there are also long-term trends expressed through prices that deserve attention. I believe there is a long-term trend happening where technological developments are driving more and more activities to move on-chain and gain more attention.
The first Bitcoin spot ETF has amassed the same AUM as the first gold ETF in a shorter period of time, which shows how seriously people are taking Bitcoin. As the first unique global digital currency network, Bitcoin provides people with the greatest value of transparency, control, and choice, all of which are brought about by the unique technology of blockchain.
Returning to today’s topic, what does our industry represent? At the time of the birth of Bitcoin and Web3, the true ethos of the industry had always revolved around transparency, accountability, and rights. How do we provide more transparency, accountability and rights through the enablement of technologies, products and solutions? Thats what were here for. Over the past two years and more, in addition to bringing the best as innovators, entrepreneurs and builders, we are borrowing and learning from regulated industries by adopting best practices from those industries to enhance transparency, accountability and rights. Next, I am honored to share with you OKX’s next development direction in these aspects.
We start by increasing transparency and accountability through technology. Starting in November 2022, we pioneered the industry’s now widely adopted Proof of Reserve Program (POR) and built it into an automated technology solution that runs on a monthly basis. We have now published our monthly Proof of Reserves report for 17 consecutive months, and this is not just a simple repeat. In fact, we decided to improve our POR program by accepting feedback, making continuous improvements to update it, and providing more technical support for the program. We expanded the coverage of POR assets from 3 to 22, and disclosed the 450 K+ addresses owned on the chain, publicly 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 technology, ensuring that users can still trust the program without the involvement of third-party intermediaries. We believe this is an important step towards self-regulation in the industry, using technology to bring more transparency and meet users’ expectations for centralized platforms to comply with traditional financial auditing standards.
Secondly, we have also invested a lot of resources in Web3 technology, launched a self-hosted wallet - OKX Web3 wallet, and built it into a powerful one-stop Web3 entrance. We believe that allowing users to control their own private keys through self-hosted wallets is the most important way to reduce the risk of evil on the platform. In addition, through hard work, we are committed to making OKX Web3 Wallet provide users with more accessible public chains, DApps, NFT platforms, DEX aggregators, etc. as much as possible. Weve done the hard work of integrating these options to provide users with the most comprehensive and free choice, all for free.
Like many other innovative technologies, in the early stages of technology development, there are often high barriers to entry for new users who are not tech-savvy. Therefore, we are committed to technology solutions and we believe that as a platform, it is very important to make it easier and more convenient for a wider range of people to enjoy the benefits of new technologies. So, we are very happy and proud to continue investing in convenient features like account abstraction, MPC wallets and the social recovery they bring to help more and more users can use self-hosted wallets without having to remember and manage assistants. Memorize the mnemonic phrase, and in the event of accidental loss of the mnemonic phrase, it is possible to continue to own and control your wallet through the social contacts of your choice.
As an industry-leading platform, OKX Web3 Wallet has launched the AA smart contract wallet by using account abstraction technology, aiming to help our users trade between different chains with a simpler experience, faster speed, and lower cost. and transfers. Everything we do about our products is based on the belief that when customers are given more choices in a simpler, safer way, users will be better equipped to make more informed decisions.
Beyond this, we also believe that self-hosted wallets are a purely technical solution, which is important to ensure transparency. Of course more transparency means more responsibility. There are multiple open source and audited modules in the OKX Web3 self-hosted wallet. Anyone can check out our code on Github if they are interested in security audits or wish to Feedback on these modules will be very welcome. These modules include but are not limited to account generation, transaction creation, transaction signature, MPS algorithm, etc. We are very proud to open source these modules and will continue to open source more modules to the community to receive feedback. We believe that as a software and technology-driven platform, providing more transparency means more accountability, which will bring more value to the customers and communities we serve.
As a technology platform, in addition to applying the latest technology to platform construction, we also realize that as a centralized platform involving user assets, we have a huge responsibility. Therefore, we believe that it is important to have an appropriate internal control system in place. We have been applying for licenses in a number of important and strategic jurisdictions, not only because they are important to our global operations and business, but also because we believe that the process of applying for licenses is an important part of building internal checks and balances.
Over the past 12 months, we have received conditional approval and license from VARA in Dubai and in-principle approval for a Major Payments Institution (MPI) license in Singapore, which are important milestones that we are proud of. But its not the end. This is recognition of the investment we have made 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, cooperate with relevant departments and judicial agencies, and use technology and tools to jointly fight financial crime.
As a centralized platform, we will continue to use advanced technological means to ensure transparency with users, partners, regulators and key stakeholders as an important responsibility of ours. One of our key global strategies is to ensure we are transparent, accountable and empower our customers and stakeholders to better serve and build locally. Hong Kong is a strategically important location for us, and we are honored to be part of the Hong Kong Web3 ecosystem. We are also honored to work with many partners, stakeholders, and legislators to build the Hong Kong Web3 ecosystem. We will insist on localization to integrate into the Hong Kong Web3 ecosystem and contribute so that we can invest in the long term and remain compliant.
As an important player in the industry, we are happy to be a 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 using technology to bring more transparency, responsibility and rights to users and the industry, and build a better future together. Im very optimistic about this. Thank you for your attention.
Disclaimer
This article represents only the authors personal views and does not represent the views of OKX. This article is not intended to provide any advice, including but not limited to: (i) investment advice or investment recommendations; (ii) an offer or solicitation to buy, sell or hold digital assets; or (iii) financial, accounting, legal or tax advice. Holding digital assets, including stablecoins and NFTs, involves a high level of risk and may fluctuate significantly or even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. Please consult your legal/tax/investment professional with questions regarding your specific situation.
