Sustainable Web3 SG 2023: Emerging Crypto Trends in 2024

Sustainable Web3 SG 2023: Emerging Crypto Trends in 2024

Cobo is honored to be invited as featured speakers at the Sustainable Web3 SG Conference on the 14th November 2023.

Our leadership trio – CEO Discus Fish, COO Lily King, and Chief of Staff Jeanette Tai – offered invaluable perspectives on the landscape and future of Web3.

In this recap, we highlight crucial takeaways and delve into the realm of Web3 innovations and emerging crypto trends. From scalable MPC Wallet-as-a-Service to revolutionary DePIN networks. Insights also extended to navigating the regulatory landscape and fortifying Web3 ecosystems with innovative wallet technologies.

You may watch the full recording of the keynote & panels on YouTube:

[Keynote] Next-Generation MPC Wallet-as-a-Service

Presentation by: Discus Fish, Co-Founder & CEO of Cobo

Key Takeaways

  • Wallet security is fundamental for crypto adoption, but remains a major challenge with over $10B stolen historically and attacks spiking since 2021.
  • Industry moving from custodial wallets towards non-custodial self-custody wallets to give users control while eliminating single points of failure.
  • Smart contracts wallets and MPC wallets emerging as leading self-custody solutions, complementary in addressing different needs.
  • As a leading custody solutions provider, Cobo offers a full spectrum of custody solutions - custodial, MPC, and smart contract wallets. Trusted by 500+ institutions with billions in assets.
  • MPC wallets divide private keys into shares across multiple parties to remove single point of failure risk. Enable features like asset recovery and B2B2C use cases.
  • Key MPC wallet benefits: no single point of failure, lower fees, chain/asset agnostic, recovery capability, include end users.
  • If we’re going to achieve mainstream adoption of crypto, people need to feel that their assets are safe. Therefore, aim to empower more developers with MPC Wallet-as-a-Service – a plug-and-play MPC wallet infrastructure with comprehensive APIs and SDKs which developers can integrate easily and build custom features on top. Also, with our recent collaboration with Google Cloud, we aim to introduce a cloud-hosted MPC Wallet-as-a-Service solution so that developers worldwide can build, deploy, and scale faster than ever before.

[Panel] DePIN For Real World Application: Use Cases And Real-World Assets

Featured Speaker: Lily King - COO of Cobo

Tokenization Of Real-World Applications

Tokenization is an important topic of this discussion. What is your opinion on tokenization of real world applications and the key benefits of tokenizing assets?

  • Tokenization of real-world assets using blockchain technology offers several transformative benefits
  • Increased transaction efficiency and speed
  • Reduced costs through smart contract automation
  • Transparency and immutability in record-keeping
  • Enhanced liquidity by allowing fractional ownership of traditionally illiquid assets like real estate, broadening investment opportunities to a wider range of investors
  • Global access to assets and allows for programmable features, enhancing trust among participants

How important is it for the tokenization of real-world applications in the Web3 space? When market conditions improve, and the bull market returns, will real-world applications still be attractive?

  • According to a16z, Web3 is the next generation of the internet that is orchestrated by tokens. If tokens do not have real value or real-world application, they will simply be a zero-sum game. The intrinsic value of tokenization lies in its ability to bring new assets on-chain and create new opportunities.
  • If the token bull market returns and market conditions improve, real-world applications will continue to be attractive. Afterall, institutional capital will be only drawn into cryptocurrencies that are backed by tangible value and utility. There is plenty of upside potential for cryptocurrencies, with a total market capitalization of currently USD 1.3 trillion, which is only half of that of Microsoft's market cap. Institutional capital will be essential to propel cryptocurrency to new levels.

Decentralized Physical Infrastructure (DePIN)

What are some challenges that need to be addressed in order to make DePIN (Decentralized Physical Infrastructure) more widely adopted in real world applications?

  • Firstly, there's a need for public and stakeholder buy-in. People and organizations must understand and trust the efficacy and benefits of decentralized networks.
  • Secondly, regulatory and policy hurdles must be navigated, as current frameworks may not adequately account for or support decentralized infrastructure models.
  • Thirdly, technical challenges like ensuring network stability, security, and interoperability are crucial, especially when integrating with existing centralized systems.

What are some of the regulatory considerations that need to be taken into account when developing DePIN (Decentralized Physical Infrastructure) applications?

  • Infrastructure regulations
  • Compliance with existing infrastructure regulations and standards is essential, as these applications often intersect with critical public services like energy, water, and transportation.
  • Environmental regulations
  • Considering environmental regulations is key, especially for projects that impact land use, energy, emissions, and natural resources.
  • Data privacy & security laws
  • These laws are important, particularly if DePIN applications involve collecting and managing user data.

[Panel] Secure Wallets And Decentralized Hosting: Exploring Web3’s Backbone

Featured Speaker: Jeanette Tai - Chief of Staff of Cobo

What is the current state of wallet security in the Web3 space and what trends do you foresee in the near future?

  • Wallet security has definitely improved over the years but attackers, both external and internal, are also getting more and more sophisticated. Looking at statistics, there has been a very sharp spike in the number of crypto heists as well as the amount stolen since 2021. This means that wallet security still remains a significant challenge today, which makes choosing the right wallet provider a very important decision.
  • In terms of trends, we have seen a trend away from custodial wallets and towards non-custodial wallets. We will continue moving towards that, in particular, towards seedless self-custody which is, custody or wallet that does not have a single point of failure of the private key. Within this space, there are two main categories which are namely MPC wallet and smart-contract wallet.

User Experience & Security

How do you balance the need for robust security in wallets with user-friendliness, especially for those new to Web3?

  • Harmonizing security and user-friendliness of wallets is a delicate challenge that requires deep expertise and experience.
  • At Cobo, we are a security-first company. Security is non-negotiable. With that as the basis, we do a few things to optimize user friendliness, leveraging our 6 years of experience in serving institutional clients.
  • First, we ensure that our UI / UX is intuitive and seamless for all levels of users. Second, we provide dedicated customer support to ensure that our users get the help they need, especially for those that are new to Web3. And third, we provide comprehensive resources to our users, including user manuals, FAQ library, video tutorials, etc.

Interoperability and Collaboration

How important is interoperability between different Web3 services and wallets, and what steps are companies taking to enhance this?

  • Interoperability is key to the broader adoption of Web3. Users want to be able to easily transfer and manage their assets across various platforms, and interact with applications and services seamlessly.
  • Recognizing this, at Cobo, we offer Cobo Connect which is a browser extension that allows our users to securely and directly interact with DApps. We are also integrated with Metamask Institution and WalletConnect.
  • Currently, we are also working on unifying the APIs for all types of crypto wallets, including custodial wallets, MPC wallets, smart contract wallets, and exchange wallets, further enhancing interoperability.

Decentralization vs Centralization

In the context of wallets, where do you see the line drawn between decentralization and centralization for optimal performance and security?

  • In the context of wallets, looking at the spectrum from centralization to decentralization, there are 3 main categories: centralized custody, co-managed custody, and self-custody.
  • There is no optimal solution because custody or wallet is not one-size-fits-all. Different use cases or user profiles will require different solutions.
  • It is important for users to speak to reputable wallet providers, carefully compare the various options, and identify the solution that is most aligned with their needs. At Cobo, we do offer custody solutions across the entire spectrum so we will be happy to assist with that.

Threat Landscape and Mitigation

What are some of the emerging threats in the Web3 ecosystem, and how are your platforms adapting to mitigate these risks?

  • Attackers are getting more and more creative and sophisticated, and we are seeing more phishing attacks, social engineering tactics, internal hacks which are more difficult to detect, etc. Looking at statistics, there has been a very sharp spike in the number of crypto heists as well as the amount stolen since 2021.
  • At Cobo, we have a multi-layer security architecture which includes our proprietary risk control layer. This is a culmination of our 6 years of experience defending against all sorts of threats. It combines our security know-hows, AI-powered threat detection system, and real-time monitoring and alert tools. Threats are always evolving and emerging, so we are constantly reviewing, auditing, and refining our security architecture.
  • We are proud to say that since Cobo’s incorporation in 2017, we have had zero security incidents. Late 2022, we even halted a security attack on one of our clients which prevented the loss of a few million dollars.

Regulatory Compliance and Privacy

How do your services navigate the complexities of regulatory compliance while ensuring user privacy and security?

  • In many cases, regulatory compliance actually helps to ensure user privacy and security. As a regulated and licensed provider, at Cobo, we strictly adhere to industry best practices and privacy laws including PDPA in Singapore and PDPO in Hong Kong.
  • We are also SOC2 and ISO27001 certified, which means that we have a robust information security management system that has been thoroughly audited by independent third parties.

Advancements in Cryptographic Security

Could you discuss any recent advancements in cryptographic techniques that are particularly exciting or promising for wallet security?

  • One exciting and promising area of advancement is definitely the application of MPC technology in crypto wallets. With MPC technology, the private key is broken down into multiple key shares and a full private key never exists at any point in time. This effectively eliminates the single point of failure of the private key which is a key risk as we have seen across crypto history.
  • MPC wallets also allow for asset recovery in the event the client loses his or her key-share, or if it’s compromised. Additionally, MPC wallets also extend the use cases into B2B2C scenarios where the end user can be given a key-share and participate in transaction signing. This opens up a new world of possibilities.
  • Other benefits of MPC wallets: Chain agnostic, lower transaction fees (since it runs off-chain)

Educating Users on Security

What role does user education play in wallet security, and what initiatives does your company have in place to educate users?

  • User education plays a foundational role in wallet security. At Cobo, user education is a priority for us. We do it as part of our client onboarding process. On top of that, we provide comprehensive resources through product guides, FAQs, video tutorials, webinars, newsletters, etc, to educate our users about our security features, best practices, emerging threats to watch for, etc.

If you are an institution interested in exploring enterprise-grade digital asset custody, Cobo offers best-in-class products and services. Check out or drop us an email at [email protected] to find out more.