Author: Nancy, PANews

Last week, Trump's victory sounded the horn for the crypto bull market. With Bitcoin leading the way to break historical highs, market sentiment has surged, and investor confidence is gradually recovering, paving the way for the mainstream adoption of cryptocurrencies. Unlike previous cycles, the focus of this bull market has shifted towards innovation and competition within a compliant framework against the backdrop of a tightening global regulatory environment.

In a new cycle, new narratives are bound to emerge. For a long time, "compliance" was not a business that everyone could engage in; it was widely recognized as costly and often unprofitable, creating significant barriers to entry. However, it must also be acknowledged that the era of regulatory arbitrage in Web3 has come to an end. With Trump's election as the new U.S. president, what follows is inevitably a "policy-driven bull market," where "compliant funds" from traditional financial institutions will rush in as new capital, indicating a profound change in the funding structure and competitive landscape of the crypto market.

Against this market backdrop, HashKey Group announced the launch of the ecological token HSK on HashKey Global, marking it as the world's first "compliant ecological coin." As a carrier of the entire HashKey ecosystem's value, HSK's continuous empowerment will attract widespread participation from the global Web3 community.

Looking at the market, the well-known compliant exchange Coinbase has yet to issue a token, while offshore exchanges may have platform tokens, but most are still non-compliant, and their future potential is diminishing. In this context, HashKey, which was "compliant from day one," seems to be choosing to explore the innovative boundaries of compliant business with the world's first compliant ecological coin HSK. This move can hardly be called anything but bold.

However, just like Dr. Xiao Feng, chairman and CEO of HashKey Group, invested in Ethereum a decade ago, this is not a "spur-of-the-moment" business decision but one that has been "long in the making." According to official information, HSK is not simply a trading platform token but an "ecological coin." HSK functions like the blood of HashKey, continuously supplying oxygen and transporting value, revitalizing the entire HashKey ecosystem.

The vast HashKey business empire has spent 10 years crafting a coin, and HSK is the value capture device within it; the new round of value gears has already begun to turn.

Take it slow, but comparatively fast

To understand the value support behind HSK, one must first grasp the various components of the HashKey business empire.

Having traversed several bull and bear markets, HashKey has established a global licensed exchange, investment and asset management, tokenization, and infrastructure services across various fields. Earlier this year, HashKey Group completed nearly $100 million in Series A financing, with a valuation exceeding $1.2 billion. In terms of lifecycle and business excellence, few projects can rival it.

Among them, the exchange business is HashKey's fortress and core pillar, with its compliance and high barriers creating insurmountable obstacles. Tokenization, Cloud, and Capital serve as its moats, and HashKey is committed to making them both deep and wide, forming a vast ecosystem. HashKey Chain connects all existing ecosystems, creating a system that can significantly promote collaboration among strangers, with all ecological links mutually reinforcing and collectively nourishing the fortress business.

Let’s start with HashKey's original intention—HashKey Capital. As one of the world's top institutional asset management companies, HashKey Capital was established in 2018 and is also known as "Asia's a16z."

Reports indicate that HashKey Capital's assets under management will reach $1 billion by 2024, having invested in over 600 blockchain projects, including well-known projects like Berachain, Babylon, Aethir, and Catizen. In this year's issuance of the Bosera HashKey Bitcoin ETF and Bosera HashKey Ethereum ETF, HashKey Capital served as a co-fund manager, jointly issued with Bosera International. The positive externalities and strong reputation that HashKey Capital has built over the long term have helped establish an unassailable moat for the brand.

The moat effect has also helped HashKey develop its core business, which is HashKey's fortress—compliant exchanges. HashKey holds compliance licenses in multiple locations, including Hong Kong, Bermuda, Japan, and Singapore, with the two most well-known compliant exchanges being HashKey Exchange and HashKey Global.

HashKey Exchange began applying for licenses in 2019 and obtained licenses 1 and 7 in 2022. According to an interview with Livio Weng, COO of HashKey Group and CEO of Exchange, "Although HashKey Exchange is a latecomer in the history of exchange development, the brand effect of HashKey Group has allowed HashKey Exchange to be quickly accepted in the local Hong Kong market and has established a good reputation among global overseas Chinese clients. Currently, HashKey Exchange's total trading volume has surpassed HKD 535 billion, with assets about to exceed HKD 6 billion, making it the largest compliant virtual asset exchange in Hong Kong."

Time is neither too long nor too short. HashKey Exchange has steadfastly operated in Hong Kong for five years, accompanying the Hong Kong Web3 market as it gradually improves, navigating regulatory waters. Now, the virtual asset market in Hong Kong has transitioned from a cautious review phase to a development phase, and it may even become a new model for compliant virtual asset trading globally, with HashKey Exchange consistently serving as a "learning committee."

This year, the offshore compliant exchange HashKey Global, which obtained a Bermuda license, has also experienced rapid growth. It achieved profitability within two months of launching, and as of November 11, according to the latest data from Coingecko, HashKey Global ranks 7th in global trading, becoming one of the fastest-growing licensed exchanges in 2024.

Of course, the value of compliant exchanges is not merely about having a few licenses; it is also key to supporting a series of unique compliant scenarios. For example, the fiat channel advantage that HashKey currently emphasizes is irreplaceable and has the potential to build a global banking channel, which is already beginning to take shape in Hong Kong. Additionally, narratives such as RWA, Payfi, and stablecoins all require compliance as a foundation to realize their "golden shovel" functionality.

Moreover, although the hidden costs and time costs of compliance are very high, deterring many enterprises, the barrier advantages it brings are also significant, possessing a "time compounding effect." Anchored by its dual flagship exchanges, HashKey has opened up a global matrix layout for compliant exchanges among the Chinese community.

Based in Hong Kong and looking globally. In the regulatory competition across various regions, HashKey, due to its good reputation, is more easily accepted locally, often requiring shorter review times before business development, which is the hidden advantage of native compliance—regulatory trust. For instance, when applying for the scarce Bermuda license, it was approved in just three months. According to public information, HashKey has applied for licenses in Dubai, Europe, and other regions, with expectations to land by the end of this year or early next year.

The Eastern Coinbase is on the horizon. For reference, the latest data shows that Coinbase's market capitalization has exceeded $80 billion, with daily trading volume reaching $13.5 billion, far surpassing the overall market capitalization of the Hong Kong Stock Exchange. HashKey's layout, which is "similar" to Coinbase, is bound to be full of imagination. According to CMC data, HashKey's two exchanges currently have a combined daily trading volume of $150 million, which suggests that HashKey's exchange market capitalization has also exceeded $1.4 billion. It is expected that as the era of regulatory arbitrage passes, compliant exchanges will further replace non-compliant exchanges in market share. Currently, the market share of non-compliant exchanges, compliant exchanges, and DEXs is approximately 75%, 15%, and 10%, respectively, leading to the inference that compliant exchanges still have at least 75% of market development space.

Take it slow, but comparatively fast. Innovative business models in compliance require time to accumulate. After years of cultivation, the HashKey exchange sector is poised to reap rewards in this round of the compliant policy-driven bull market. Currently, the Web3 industry has around 560 million users; if we benchmark against the 6 billion internet users, it is roughly estimated that there is still more than tenfold space for overall business growth.

Additionally, HashKey Group's Tokenisation, Cloud, and other businesses are interconnected. The tokenization service provider HashKey Tokenisation creates liquidity for Web and Web3 projects at various stages and provides unique assets for compliant exchanges, becoming a bridge connecting the real economy, supporting innovative technology, and aiding in the construction of financial markets. The Tokenisation business has participated in the Hong Kong Monetary Authority's Ensemble project sandbox, which will promote the development of industry standards in the Hong Kong tokenization market.

HashKey Cloud provides professional, stable, and secure blockchain services to global clients, with its node verification services covering over 80 mainstream public chains and asset management scale exceeding 1.2 million ETH, ranking among the top three in Asia and top ten globally. In the global exploration of ETH ETF Staking, HashKey Capital and HashKey Cloud can achieve a perfect closed loop within their own businesses, potentially becoming a new growth point.

As Livio Weng envisions: "We aim to become the best spot virtual asset trading platform, the largest ETF custodian, and the most important Ethereum node service provider. We have made in-depth layouts and constructions in multiple Web3 fields, including stablecoins, asset tokenization, and public chain infrastructure." According to public information, HashKey has recently launched the public chain HashKey Chain, which has opened for public testing after a year of comprehensive internal testing, allowing users and developers to participate in testing through the official website hsk.xyz and become early supporters of long-termism. This has formed a full-stack crypto ecological platform.

In this light, HashKey's current business scale has far exceeded the $1.2 billion valuation at the time of financing.

A decade to craft an "ecological coin"

HashKey has always been the entity that understands Web3 best in traditional finance and compliance best in Web3.

Among them, HSK reflects the value of the entire HashKey Group, bearing the mission of bridging the gap between crypto and traditional finance, connecting and integrating these two financial systems.

A decade to craft a coin, what makes this coin different? Regardless of the industry, "platform tokens" have always been a hot business, with the only distinction for early investors being the amount of profit made. HSK goes beyond the ordinary understanding of "platform tokens" by pioneering the world's first "compliant ecological coin," empowering value across all business scenarios of HashKey.

Firstly, as the native token and Gas token of HashKey Chain, HSK will empower the long-term development and continuous growth of the ecosystem. In comparison to Coinbase, HashKey Chain is the "HashKey version" of Base. As a full-stack crypto ecological platform, HashKey Chain is dedicated to helping Web2 enterprises seamlessly transition to Web3, supporting core areas such as BTCFi, stablecoins, PayFi, and real-world assets (RWA). Currently, the HashKey Chain ecosystem has attracted over 150 projects, enabling businesses to quickly experiment and deploy Web3 projects by integrating payment, tokenization, lending, and trading solutions, connecting global users.

Additionally, as a medium for rewards, governance, and transaction fees, HSK will be widely used for platform service fee payments, exclusive token priority purchases, public chain governance and decision-making, value-added services, cross-platform ecological cooperation, custody fee discounts or waivers, node validation rewards, and research report releases. Users holding HSK will enjoy comprehensive crypto services from trading and investment to application deployment, connecting with every core business of HashKey.

As industry competition intensifies, technical discussions, background narratives, and storytelling are no longer golden trademarks. The market is gradually shifting towards more practical value indicators, such as real adoption rates and revenue growth. The "value" that the HashKey business landscape endows HSK with ensures that it is fundamentally different from most "price tokens" that peak in the market.

In terms of token distribution, HashKey has also made various attempts at "long-termism," such as decentralization, de-VCing, and returning to the community.

During the initial fundraising phase, HSK distributed initial chips through "gifts" and "ecological rewards," lowering the actual circulating market value so that those who truly love, contribute significantly, and possess a long-term vision can participate in the investment and share in the benefits. Additionally, to prevent value dilution caused by token rewards, HSK has introduced a burn mechanism, using 20% of platform business profits to repurchase and permanently destroy HSK, ensuring a steady increase in market value.

According to the HSK white paper, the total supply of HSK is 1 billion tokens, with 65% allocated to support medium- to long-term ecological construction, 30% distributed to the team, and 5% as a reserve fund. During the financing period, HashKey chose equity financing instead of issuing tokens to avoid short-term market fluctuations caused by VC sell-offs, ensuring long-term development.

Distilling the truth and transcending cycles is the strength of the HashKey team. As the Web3 compliant market further expands, HashKey is bound to be a leader in this space. Therefore, the value foundation built by the various core business lines of HashKey Group listed above is merely static data; the value of HSK comes not only from its initial applications but also from the potential brought by HashKey's high growth rate.

This is not just a story of an "ecological coin," but a journey of value creation and long-term growth.

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