Interview | Zen, PANews

Author | Zen, PANews

In the "Lost Thirty Years", Japan missed the entrepreneurial wave of the Internet era, and even failed to produce a domestic Internet giant. By 2023, the country's gross domestic product has been surpassed by Germany, slipping to the world's fourth-largest economy. After fully recognizing past mistakes, the Japanese government began to relax its cryptocurrency policies last year in an attempt to catch up with the new wave of Internet development, Web3.0.

Benefiting from relaxed regulatory policies and reduced regulatory uncertainty, many large Japanese companies have begun to actively participate in the Web3 field. The influx of capital and research and development capabilities brought by these companies will play an important role in the development and popularization of Web3 technology. In the process of many traditional Japanese companies entering the Web3 space, the figure of Astar Network, Japan's largest public chain, often appears. Recently, Astar has thrown a "bombshell" by partnering with Sony to establish a subsidiary and announcing plans to launch a "Sony Chain" that competes with Base.

Recently, Sota Watanabe, the founder of Astar Network, came to China, and PANews had an exclusive interview with him. During the conversation, Sota shared his personal experience and the development process of the Astar project. He also revealed some details about the recent developments of "Sony Chain," which has attracted public attention.

Sota Watanabe: Entrepreneurial Journey and Extensive Experience

Before the COVID-19 pandemic, Sota, who had just founded Astar Network (then known as Plasm Network), had visited China multiple times and left his mark in cities such as Beijing, Shanghai, and Hangzhou. After many years, on this return to China, Sota and his Astar are no longer newcomers to the industry. Astar is now Japan's largest blockchain public chain, and Sota himself has become a well-known entrepreneur in the Web3 industry, serving as a director of the Japan Blockchain Association. Additionally, on the day of the interview, the Japanese Ministry of Economy, Trade and Industry announced the recruitment of enterprises for the "2025 Demonstration Project for Building Digital Public Products Using Web3 and Blockchain," in which Sota, as a member of the advisory committee, will participate in its system and design.

"As an entrepreneur, it is very important to see the world with your own eyes. Especially when making long-term strategic decisions, especially about cryptocurrencies, because they are decentralized, so we need to collaborate with many people from different countries," Sota said. Prior to this trip to China, he had just returned from Mexico and spent a few days in Japan for transit.

In fact, during his university years, Sota began to travel to various countries and witnessed many social issues such as poverty and discrimination. After experiencing the disparities in the world, he also joined a non-profit organization. "I can bring happiness to ten people in front of me, but there are more people who are beyond my reach. However, through Internet technology, we can empower people. When I started my business, I considered whether to choose artificial intelligence or blockchain, but I ultimately chose the latter because it can empower people."

With Support from Sony, Samsung, and Others, What's the Secret of Astar's Success?

In early 2022, Astar Network launched its mainnet and gradually expanded its business by being listed on mainstream exchanges such as Binance, OKX, and Upbit. From this period onwards, Astar shifted its focus to domestic development in Japan and successively gained support from several traditional industries and Web3 giants.

Astar signed a cooperation agreement with the Japanese telecommunications operator NTT Docomo and received sponsorship for Astar Network's hackathon from the automotive giant Toyota. After establishing a foothold in the Japanese market, Astar expanded overseas, not only securing investments from Samsung and Dah Sing Bank but also being the first user to launch Astar zkEVM, a Layer 2 solution based on Ethereum, as part of Polygon's new "AggLayer" technology. Astar zkEVM has already attracted several well-known enterprises and entrepreneurs, including Deloitte Tohmatsu Japan, which will develop a baseball-themed NFT game, and Yoake, a new entertainment company co-founded by one of the creators of AKB48 and Nogizaka46, which will create entertainment content and idol economy within the ecosystem.

The most deeply involved commercial giant collaborating with Astar Network is Sony, a comprehensive group of companies involved in electronics, semiconductors, entertainment, and finance. In February 2023, a business unit of Sony Group, Sony Network Communications, collaborated with Astar Network to launch a Web3 incubation program. Subsequently, the collaboration between the two parties deepened. A few months later, Astar's development company, Startale Labs, received a $3.5 million investment from Sony Network Communications. Later, in September 2023, the two parties established a joint venture company, "Sony Network Communications Labs Pte. Ltd." According to BizFile, a portion of Startale Labs' equity has been transferred to the group company of Sony Network Communications, indicating that the strategic position of "Sony Chain" has been further enhanced. This project may enjoy a larger budget and access to more resources from Sony.

During the interview, Sota also shared the secret of Astar's business expansion. "Many people focus too much on technology, starting from technology and then considering user experience. We believe that we should start from user experience and then develop technology." He believes that almost all technological inventions in computer hardware and software have originated in the United States, while the commercialization of technology after its introduction is a strength of East Asian countries such as "China, Japan, and South Korea." "Another strategy is storytelling," Sota added. Japan has experienced continuous economic stagnation over the past thirty years, and Web3, as the next wave of IT, has become the next major trend that the government must invest in. "The Japanese government and the Japanese people have this narrative, so I can talk to many government officials, corporate personnel, and entrepreneurs because we share this narrative."

Aspiring to Become a Global Project, the Key Lies in Self-Development

However, Sota does not want to focus solely on the Japanese domestic market. His main purpose in coming to China this time is to discuss cooperation with several well-known Internet companies in the country. "We are not satisfied yet. Japan is an important market, but we hope to become a global project, reaching out to the entire Asia, especially hoping to enter the U.S. market."

"My mission is to popularize Web3," Sota said. The adoption rate of cryptocurrencies and Web3 is only 3% of the global population. This is an incremental game, so what needs to be done is to bring the remaining 97% of people into this ecosystem. Astar will use Sony and other companies to bring a large number of people into the blockchain. "We hope to promote the development of the Japanese economy and lead the Web3 industry. This is what Astar and Sony aim to do." However, even if the goal is to become a global blockchain project, it is still essential to focus on the local market and achieve success. Sota admitted that the Japanese government is very supportive of them, and as Japanese entrepreneurs, they need to achieve achievements such as being in the top five or top ten projects. Otherwise, even with government support, they cannot form a narrative. "So it depends on us."

Backed by Sony's Entertainment Empire, What Can We Expect from "Sony Chain"?

The competition in the public chain ecosystem has become intense, and it is quite challenging for each to retain its own position. "Sony Chain" will undoubtedly face many challenges at this time. When asked about the core competitiveness of "Sony Chain," Sota pointed out that Sony, as a commercial giant, has a wide-ranging influence in the entertainment ecosystem, involving multiple fields such as movies, games, and music, while Coinbase is a cryptocurrency company, and Telegram is a social networking company. "So, based on Sony's resources and influence, we can truly bring millions of people unfamiliar with Web3 into this ecosystem. Just like everyone uses the Internet in a coffee shop without knowing the TCP/IP and HTTP protocols. We hope to achieve this through the collaboration between blockchain and Sony."

Sony's cameras, audio-visual products, gaming consoles, and televisions have high recognition and popularity. In China, there is even a widespread slogan "Sony is great" with a sense of "faith," which limits many people's perception of Sony to just an electronic consumer brand. In reality, Sony has a far-reaching presence in the entertainment industry, including early acquisition of the rights to the superhero IP "Spider-Man" and the recent global success of the anime "Demon Slayer" produced by its subsidiary Aniplex. According to financial data, the total sales of Sony's entertainment businesses, including gaming and network services, music, and movies, accounted for nearly 60% of the group's comprehensive sales in the 2023 fiscal year.

The special emphasis on cultural IP by Sony is inherited. Sota stated, "One of the core strategies of 'Sony Chain' is to introduce a large amount of intellectual property and then share the revenue, exploring new ways of collaboration between Web3 projects and IP on the blockchain. The business model has not been fully decided, but we can ensure authenticity on the blockchain." He said, "Sony Chain" will initially start with deploying Web 3 projects and in the long run, will introduce gaming, music, and other fields.

"But we will focus on user experience, not just creating NFTs and conducting simple transactions. User experience is very important, and they don't need to know whether they are using Web3 or Web2. This is the best user experience we want to achieve," added Sota. He currently cannot disclose more detailed information about "Sony Chain," but he revealed to PANews that there will be a major update for the project in August this year. Additionally, Astar will also undergo a new brand upgrade and milestone in the coming months.

Utilizing the Extensive Touchpoints of Established Giants to Accelerate Mass Adoption

In today's Web3 industry, there is an urgent pursuit of achieving mass adoption on one hand, and on the other hand, there is a proliferation of fraud, asset risks, and excessive speculation. Sota believes that the U.S. government and some Japanese politicians' view of cryptocurrencies as merely a gambling game is based on their assessment of the current market situation. "Through practical use cases, we need to prove ourselves and make political leaders and regulators believe that cryptocurrencies are no longer just a speculative tool," he said. Industry practitioners need to provide practical solutions that help improve people's lives. Cryptocurrencies should not be the exclusive domain of the wealthy but should also benefit those with less power.

Regarding the topic of mass adoption, Sota stated that Web3 technology will not be the sole reason for Japanese companies to use it, as Web3 itself is no longer a distinguishing factor. "I believe that the actual benefits and user experience are more important. We are not talking about blockchain; we are talking about solutions that improve user experience."

Sota also cited the early story of Microsoft growing into a giant with the help of IBM and later supporting OpenAI. He pointed out that utilizing existing assets and touchpoints is crucial for achieving mass adoption because new Web3 companies alone cannot reach millions of users in a short time, which takes twenty years. "So, Web3 needs to use existing large companies and products to achieve this goal, as they have unique advantages in mainstreaming blockchain."

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