What are the categories of digital assets?
At the Wuzhen World Blockchain Conference, Li Lao, Chief Operating Officer of Coco Finance, delivered a speech on "High-quality Digital Assets in the Enlightenment Period" at the conference, sharing his thoughts on the development of the digital asset market and how to evaluate and select high-quality digital assets.
I think this content is very inspiring to everyone, so I will share it with you based on my thinking and understanding. The content of this sharing is relatively long, so I will share it with you in series.
1. Typical differences between digital asset investment and traditional asset investment
Investment in digital currency differs from traditional investment markets in two important ways:
One is that this market was a global market from the very beginning, and anywhere in the world, as long as there is the Internet, you can enter the digital currency exchange for token trading and investment;
The second is that this market is a market with no barriers to entry, which means that anyone, regardless of age, financial strength, or national boundaries, can trade and buy in this market.
These two characteristics make the digital asset investment market face more and wider potential risk factors than the traditional investment market.
For example, since our A-share investors and sources of funds are mainly domestic, any changes in domestic policies and the environment will affect the source of funds for A-shares, which in turn will affect the A-share market. The impact of the external environment on A shares is indirect and the impact will be much smaller.
The digital currency market is different. Its funds come from all over the world, so any major event in the world will affect the entry and exit of funds in the market. From the Mentougou incident in the early years, to the subsequent bank run in Cyprus, to the 94 incident in my country, these sudden incidents that occurred around the world have had a major impact on the entire digital currency market.
On the one hand, such a market brings extreme transaction convenience to investors and digital assets, and on the other hand, it also exposes investors to huge risks.
Therefore, investors' consideration and analysis of risks should be more complicated and prudent, especially for long-term investors who take "value investment" as their basic starting point, the risk factors and risk impacts they will face in the process of holding assets for a long time will be more complex. many.
2. Classification of digital assets
Based on this cognition, from the perspective of "value investment", digital assets in the market can be divided into three categories:
One is native digital assets, mainly Utility Token (application token), and the representative currencies are BTC and ETH. They are the initiators of blockchain development and are native to the blockchain ecosystem.
They were born to solve problems in the on-chain ecology rather than in off-chain application scenarios.
Their birth and development have promoted the development of the blockchain ecology itself, created usage scenarios in the on-chain ecology, and gradually affected off-chain application scenarios from the on-chain ecology, thereby attracting the attention of off-site users and investors Note that this makes these tokens start to carry more and more value.
The second is the token economy digital asset, the representative currency is BAT.
BAT is a token issued by the Brave browser project team. The role of this token is to block the ubiquitous and pervasive advertisements in the Internet world. In the Brave browser, if you want to insert an advertisement, the advertiser must pay BAT tokens to the user who watches the advertisement, and cannot force the user to insert the advertisement.
The starting point of most of these projects is not to solve the problems in the blockchain ecology, and actually does not require the innovation of blockchain technology. Its focus is to use tokens as a tool to solve problems in an existing industry. For example, insufficient incentives, unclear interest relations, etc., hope to use blockchain technology as a tool to reconstruct the format of a certain industry, change the relationship between producers and consumers, and change the value distribution system in the original format.
The third is securities digital assets, represented by platform tokens, which are what we call exchange platform currencies, typically BNB, HT and OKB.
The platform token of the exchange is closely related to the interests of the platform, and the innovation and business operation capabilities of the platform will affect the value of the platform token. As the business form with the most commercial value in the blockchain industry, the platform token of the exchange relies on its own huge commercial value, and its asset value potential has also been continuously released.
These three types of assets have different origins of value, so they face different risks. Investors must clarify their risk sources when investing in these three types of assets in order to avoid risks and maximize returns.
In the follow-up sharing, I will analyze the risks and investment strategies of these three types of assets one by one.
