Web3 in China: Onboarding the Next Billion Users
Author: JhonyBy 2030, the global Web3 market size is expected to reach $81.5 billion, according to research and consulting firm Emergen Research. The Asia-Pacific region is forecasted to have a regional share of 45.4% with China being one of the key players.
Unlike the rest of the world, Web3 in China is slowly taking shape with Chinese characteristics. As Beijing has its own vision of Web3, the adoption and real-life application of blockchain technology in China is considerably different. Public, decentralised public blockchains do not make up the majority of the Chinese market, rather it is ruled by consortium blockchains: a type of blockchain that has much less transparency and is often approved by the state backed Blockchain Services Network (BSN).
On 20th February 2023, Hong Kong’s Securities and Futures Commission (SFC) published proposals for a new cryptocurrency licensing regime which will allow investors to trade certain “large-cap tokens” on regulatory compliant platforms. As China gradually shows signs of softening regulatory control over the emerging sector, it is to be expected that what we see in Hong Kong today, may very well be a glimpse of the future of Web3 in China.
Little Red Book (Xiaohongshu)
On 26th January 2023, the Chinese version of Instagram, Little Red Book (Xiaohongshu) integrated Conflux Network as permissionless blockchain allowing users to showcase NFTs minted on Conflux on their profile page in the digital collection section called ‘R-Space’.
With more than 200M Daily Active Users (DAU), this integration brings NFTs a step closer to mass adoption in China, where people are actively using Web3 technology on a daily basis within a Web2 system. The platform has previous alliances with blockchains and NFTs, but never a permissionless network like Conflux.
Ming Wu, CTO of Conflux said “large internet industry players in China have initiated efforts embracing the Web3 transition. Conflux is becoming the major bridge connecting the two worlds and taking a leadership role to expand Web3 technology into traditional industry scenarios.”
From a regulatory perspective, having such a large-scale company integrate a permissionless blockchain further solidifies China’s pro-NFT position and suggests we can expect an increase in local companies considering blockchain technology integration with existing Web2 companies.
The first Conflux NFT supported by Little Red Book is from the Mimic Shhans community, which has a large Chinese community base, and owners of the original NFT can go through a predefined process to receive the Conflux NFT that can be shown on their Little Red Book profile page.
China Telecom — BSIM
On 15th February 2023, Conflux Network announced that it has partnered with China Telecom, the 2nd largest wireless carrier in China (390M+ mobile subscribers) to bring Blockchain-enabled SIM cards (BSIM) to market. The entry-level Web3 product will be the largest blockchain hardware product ever seen globally, involving the most users and applications. China Telecom will launch the first BSIM pilot program in Hong Kong later this year. This will likely be followed by pilots in key mainland China locations such as Shanghai.
BSIM will dramatically lower the barrier to entry to Web3 for China Telecom’s 390+ million mobile phone subscribers, while making transactions faster and more secure. By making telecom users’ personal digital assets more secure, the goal is to make mobile phones more secure.
The BSIM card integrates Conflux’s Tree-graph, dual proof of stake and proof of work technology, enabling the highest system performance for any blockchain in the world. It uses the hardware security advantages of SIM cards to protect users’ private keys, which is a secure and convenient Web3 entry solution.
The BSIM Card is indistinguishable from a traditional SIM in appearance but the storage space is 10–20 times larger than the traditional SIM card, and the computing power is increased by tens of times. Users who switch to a BSIM card will be able to store digital assets safely, transfer their digital assets conveniently, and display their assets in a variety of applications.
The BSIM card will manage and store the user’s public and private keys in the card, and carry out digital signatures in a way that the private key does not exit the card. The BSIM card can also allow encrypted storage, key retrieval and other operations. The built-in Bluetooth module will be responsible for the signature and transfer of assets, to ensure the security of personal digital assets. This reduces the risk of the user being attacked by viruses and other malicious software on the mobile phone.
Users’ identifiers in the traditional world, such as mobile phone numbers, can be tied to their Decentralised Identifiers (DID). This will allow for better integration and interaction between virtual and real-world information. BSIM cards can also be combined with abstract accounts based on smart contracts, enabling blockchain applications to safely and efficiently use users’ crypto and traditional world information. Connecting DID with cell phone numbers may also alleviate some of the regulatory concerns stemming from the anonymity of the blockchain technology.
The initial agreement was signed in 2022 between Conflux Network and China Telecom and this prototype is the culmination of a strategic year-long engagement with the goal to build hardware products at the entrance to the world’s metaverse. The R&D phase of BSIM card is now complete, and it has successfully connected with Conflux’s main network in the test environment. This prototype has the storage and sending functions of digital assets. Conflux and China Telecom will now focus on enriching the BSIM card’s ecological applications, with emphasis on games, payments and other fields.
For more information, please refer to Conflux Network’s announcement video.
Taopai
Taopai is one of the first NFT Marketplaces and Web3 Solutions company in China developing on Conflux Network. In addition, Taopai was also the first project that included Conflux Network’s Fiat2NFT solution, so that users can freely purchase NFTs on Taopai using digital CNY.
As a mobile-first platform, Taopai NFT has more than 1 million users and their purchased user count has already exceeded 200,000. To ensure data security, Taopai makes use of Multi-Party Computation (MPC) and document signature technologies into private key escrow. Following the development of NFT in China, Taopai gradually changed from a technology solution provider to a leading NFT marketplace.
Taopai has cooperated with more than 200 well-established brands, including leading Chinese companies such as CCTV, People’s Daily, Huace Film & TV, Mango TV, or multinationals like Unilever to issue their NFTs for the Chinese market. Notably, Taopai’s cooperation with China’s Aerospace Science and Technology Cooperation is not only limited to physical merchandises, but also the launch of a Taopai satellite into space is expected in the near future.
For more information, please refer to this interview and Taopai’s website.
StarBitech
StarBitech is a digital content asset technology company founded in 2015 and is the first fully regulated NaaS (NFT-as-a-Service) provider in China. Committed to providing compliant Web3 services to individuals and enterprises in China, StarBitech specialises in digital asset creation, distribution, and development. It is jointly invested in by the Shanghai Tree-Graph Blockchain Research Institute and Fengyuzhu and is located at the Microsoft Accelerator in the Caohejing Development Zone in Shanghai.
The company focuses on providing individuals and businesses with algorithm-driven digital asset creation and publishing services, metaverse marketing, membership operation, digital ticketing, and IP derivatives.
With more than 6 million NFTs issued on their digital collection distribution platform Zverse, previous partners of StarBitech include PwC, LVMH, Huawei, Shanghai Jing’an Police Bureau, China Merchants Bank, the Shanghai Technology Exchange (STEX) and more.
The company has recently received support from Microsoft and OpenAI and will leverage its strengths in Chinese natural language processing and local compliance to develop AIGC (AI-generated content) services in fields such as chatbots, visual content creation, and marketing content creation. These services will be supported by GPT, DALL-E, and reinforcement learning, providing AI capabilities for industries such as marketing, gaming, animation, culture and tourism, and government.
For more information, please refer to this interview and StarBitech’s website.
MDBox Wallet
MDBox Wallet is a China market-focused multi-chain wallet that is both custodial and non-custodial. In order to comply with domestic regulations, MDBox Wallet only supports showcasing, holding, transfers, and interactions with NFTs. In addition, it is a multichain wallet that supports more than 5 consortium blockchains (regulated) and Conflux Network as the only permissionless blockchain network in China.
Currently, MDBox Wallet has more than 600,000 registered users and is the only wallet in the market that supports both consortium and public blockchains. MDBox wallet has more than 30 applications connected to it, which are divided into NFT platforms, the Metaverse space, SocialFi, GameFi, and exchanges.
For more information, please refer to this interview.
HELLO WAT
HELLO WAT is an original Chinese IP ecosystem that is based on the metaverse and blockchain technologies. All IPs are built, created, and shared with HELLO WAT’s users. Around these IPs, HELLO WAT have made blockchain-based NFTs, NFT leasing, DAO and even blockchain mini-games.
In order to further enrich the entire ecosystem, HELLO WAT made a 3.0 version of the SocialFi Metaverse, as well as creating a real-world campus and physical figures. From the Web3 spirit of co-creation and sharing, users can also make secondary creations and applications during the use process of all HELLO WAT assets and pictures.
HELLO WAT is a digital cultural product that can flow between the real and the imaginary, and ultimately, users will have a new way of living or working, which is known as X-to-earn. HELLO WAT started off on a consortium blockchain in China, but has since moved on to Conflux Network, the only regulatory-compliant public blockchain in China.
For more information, please refer to this interview and HELLO WAT’s website.
AnyWeb Wallet
AnyWeb wallet is a plug-in-free, highly compliant blockchain asset wallet and unified authentication service designed for the Chinese environment that supports the Conflux public blockchain. It has over 500,000 registered users and uses four technologies, including distributed hosting, private key hosting, MPC multi-party computation, and WASM WebAssembly to secure users’ private key security.
As a tailor-made wallet for the Chinese market, AnyWeb does not require users to remember their seed phrase or have a private key. Users can easily verify their identity with their mobile phone number and thus being regulatory compliant in China. Furthermore, AnyWeb makes use of contract gateways that are designed to ensure regulatory control. In the last quarter, AnyWeb officially passed the State Internet Information Office’s blockchain filling.
AnyWeb supports primary offerings, secondary consignment, and also the ability to flow to different metaverse platforms. At its core, AnyWeb provides two key services to its users:
- Return ownership of the user’s NFT assets to the user.
- After the NFT is given to the user, it can be connected to a number of platforms within the wallet to extend the value of its NFT applications.
In addition, AnyWeb JS SDK provides a set of simple APIs to facilitate project developers to quickly connect Dapps to AnyWeb and make use of convenient wallet services. Its features include:
- Supports wallet services on mobile and PC platform
- Supports wallet services within websites
- Supports multi-chain wallet services
- Supports both Hot and Cold wallets
For more information, please refer to AnyWeb’s website.
MetaCross
MetaCross is a Web3 company that focuses on helping brands and project parties to build their own brand metaverse. Through a complete set of hardware and software solutions, MetaCross allows brands to leverage their influence in the market and do marketing at a lower cost. MetaCross have collaborated with more than 50 major brands, including NFTs, project parties, and some offline exhibition organisers.
At the same time, it provides consumers with a brand-new consumption experience by combining reality and imagination. This is achieved by allowing the user to be immersed in it, to be able to take the same identity and be able to travel between the virtual and the real, between the metaverse of several brands. The key concept that MetaCross promotes is that NFTs and PFPs existence and usage should not be limited to virtual scenarios on the blockchain, but also expanded to the real world.
To that end, MetaCross uses NFC technology as a software identity system which allows users to interact with people as well as terminal devices to verify their identity and receive benefits (airdrop / POAP). These rights then enable users to literally travel between virtual and reality, binding their online on-chain identity and off-chain identity, or online identity and offline identity all together and into one whole.
MetaERA
MetaERA, a pioneer in the Web 3.0 era through technological inovation, is a comprehensive cultural and creative enterprise which focuses on:
- Music and animation production service platforms
- Development of animation intelligent technology systems
- Research and Development of new media technology
With a first-class music and animation creation team and domestic leading 3D animation production technology, it is one of the most powerful music animation comprehensive cultural and creative enterprises in China. In their own words, MetaERA insists on “creativity as the core competitiveness and technological innovation to create vitality”.
Since its establishment, MetaERA has cultivated long-term cooperative relationships with many domestic brand organisations, allowing its animation and music products to be quickly introduced to the market and form effective dissemination and sales.
MetaERA has since created its own IP, Metaverse Epic, its own (female) virtual idol, MetaGirl and MetaCluster, a unique product that helps brands to create their own brands NFT distribution platform.
MetaERA has more than half a million subscribers in their marketplace, with a 90% male customer base, and are mostly millenials.
For more information, please refer to MetaEra’s website.
Closing Thoughts
After a major crackdown on crypturrency in 2021, Beijing is now signalling a softer regulatory stance on the emerging sector. For all its worth, the future of Web3 in China is still unclear, but there are some certainties.
Given its particular state of government, China will have its own vision of Web3 and implement legislations as they see fit. Web2 integrations will bring the masses into the Web3 universe, and consortium blockchains will never fully realise the potential of Web3 as public blockchains do.
