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PwC Singapore's Venture Hub, on the Investment Sentiment of Blockchain Startups

November has been a busy month for FinTech and the blockchain industry in Singapore. The Singapore FinTech Festival (SFF) and the Singapore Week of Innovation and TeCHnology (SWITCH) held 11 – 15 Nov gathered over 60,000 participants from 140 countries to foster the development of FinTech in Singapore. The Monetary Authority of Singapore (MAS) also announced key initiatives such as the joint development of FinTech Research Platform connecting investors and FinTech startups.

We arranged an interview with Lim Shu Ning, Director in PwC Singapore’s Venture Hub specializing in Blockchain during the SFF, which Shu Ning shared with us the investment sentiment of Singaporean blockchain startups and the state of enterprise blockchain adoption in Singapore.

Can you give us an overview of the Blockchain team in PwC Venture Hub? What is the scope of services that the team provides?

PwC Singapore’s Venture Hub adopts a one-stop shop approach to providing solutions, services and collaborating with motivated entrepreneurs, venture capitalists, incubators and accelerators within the venture ecosystem to help them expand into their key markets.

Our team focuses on fast-growing Tech startups including blockchain companies, using our expertise and experience to help founders grow their businesses. We work closely with the companies on areas such as fundraising, strategy, branding and M&A, IPO/ICO advisory to audit & regulatory compliance, legal & tax services and governance advisory.

What are the key pain points faced by blockchain startups in Singapore? What are some of the best advice you can give to these startups?

Blockchain is clearly a large part of what the Singapore Government sees to be an important and innovation-filled future for Singapore’s financial sector. Despite being a potential game-changer, there are also clear emerging doubts.

One particular concern is cost and efficiency. Given that the amount of resources and money spent, some perceive that substantial progress has not yet been achieved. Of the various use cases we see in the market, a large number may be still at the ideation stage, some might be in the developmental stage but not many are widely adopted or see the widespread application.

This leads to another pain-point which is to identify the right ecosystem partners. The value of blockchain is maximized when partners in the ecosystems work together and operating on a common chain. Currently, we see different organizations in the same industry sector developing many different chains and this is detrimental to the growth of blockchain. That being said, we do see potential interoperability across different blockchain solutions which help to harness efficiency for the ecosystems.

Blockchain companies should focus on creating solutions to solve real business problems through the trust that the blockchain brings, to ensure their products are viable and scalable. Blockchain technology is not the solution to everything, the right application to the right problem statement is the key.

Are there challenges to find the right talent for the fintech/ blockchain industry? What initiatives have been done to tackle talent shortages?

As with any new technology, blockchain is relatively new and will continue to evolve. At the moment, we note that there is indeed a limited supply of people with developed skills in this space. On the other hand, the demand for qualified talent is increasing and costly. And this is particularly challenging here due to Singapore’s relatively small population size.

Singapore has the potential to become an Asian Blockchain Hub with its blockchain-friendly regulations and government support in nurturing blockchain development. With the government’s support, we believe that Singapore will continue to attract and groom the right talent in the near future.

How would you describe the enterprise blockchain adoption in Singapore and what are the interesting use cases in blockchain there?

In PwC’s Global Blockchain Survey 2018, we noted that 46% of enterprise blockchain adoption resides in the Financial Services industry, 12% in the Industrial products and manufacturing, 12% in Energy and utilities, 11% in Healthcare. Other segments include government, retail and consumer sectors. This trend is quite in line with what we observe in Singapore as well.

Some of the interesting blockchain use cases we see include (just to name a few):

– Digital identity: Blockchain to create an auditable source of personal identity information shared and verified across multiple organizations. This also empowers users (like us) to have control over our digital identity and personal information.

– Supply Chain visibility: Blockchain eases the existing pain points of buyers, sellers and various parties across the supply chain. Some of the track & trace blockchain solutions we have seen allow traditional businesses to digitize their traditional products include food products into traceable digital assets to tackle some of the key issues in global trade including food safety and wastage.

– Record keeping: Blockchain provides a method for collectively recording and notarizing any type of data. This could include education records and certificates, healthcare records and more.

– Provenance: Blockchain offers an immutable and irreversible source of information that tracks true ownership as well as the authenticity of a product. We see more relevance for this application in the retail luxury products sector and high-value collectibles.

How would you describe the market sentiment on investing in Singaporean blockchain startups in terms of M&A deals and fundraising?

Market sentiment into investing in Singaporean blockchain startups is picking up. Previously investment was mainly in the form of token sales which are more speculative in nature. However as the market matures, sophisticated investors, as well as corporates, entered the fray seeing the potential of adding blockchain technology to traditional business or seeing the potential blockchain technology brought to different industries. Investment is now into the equity of the startup itself rather via a token sale.

Through our partnership with Tribe accelerator, we have seen first hand the kind of solutions that corporates are on the look-out for and that they have invested in. While most investments in startups are focused on taking a stake, we may see a growing number of M&A buyouts as these startups grow and as their solutions become more concrete.

We also note that investors are more keen to invest in blockchain startups with specific industry-focused solutions and where they are combining with other technologies such as IoT and AI; rather than blockchain developer companies.

Allied Market Research: Blockchain Identity Management Will be a $11.46 Billion Market by 2026

Allied Market Research, a US-based research and advisory company, has reported that the worldwide blockchain identity management sector will escalate to $11.46 billion by 2026 from the $107 million recorded in 2018. According to the release shared with Blockchain.News, this will represent a compound annual growth rate (CAGR) of 79.2% because as blockchain are able to offer an immutable, interoperable, and unified infrastructure needed in the storage of digital identities.

Urge for transparent transactions

The report notes that retail industries have a growing appetite for reliability, authenticity, quality, and product safety, as this propels the realization of the set objectives. Identity management is crucial in the present internet drive economy, and blockchain-based solutions are proving to be a game-changer because of transparent and tamper-proof transactions.

As a result, the urge for transparency is stipulated to be the key factor driving the market growth in the blockchain identity management industry. Furthermore, the rapidly changing international trade and retail sector is speculated to offer a stepping stone to notable players in this sector.

Large enterprises are expected to rule the roost in this sector during the forecast period. Still, small & medium enterprises (SMEs) will have the fastest CAGR of 85.7% throughout the estimated time.

Identity theft is a problem that is rising at an alarming rate across the globe. Blockchain identity management solutions are expected to be embraced by retail businesses, healthcare organizations, and banks, among others, in curbing this menace.

Proliferation of E-Commerce

An increase in the demand for secure solutions, as well as escalation of E-Commerce, are anticipated to fuel growth in the blockchain identity management industry. The report also attests that the rise in government-based blockchain initiatives will be instrumental in its development.

Furthermore, elevated transaction and scalability speed is speculated to be another significant boost in upcoming years. Nevertheless, the lack of awareness pertaining to blockchain technology is anticipated to impede market growth during the estimated period.

On the other hand, recent research showed that the blockchain-as-a-service (BaaS) market is anticipated to skyrocket to $24 billion by 2027.

Image via Shutterstock

ShareRing Enhances Digital Identity Solutions by Merging ShareToken

To make sharing easier, ShareRing- a blockchain-based ecosystem providing digital identity solutions, has merged ShareToken (SHR) into the Ethereum and Binance networks through Multichain swap.

Users will have the opportunity to swap SHR, ShareRing’s native token, between Ethereum and BNB Smart Chain. Per the announcement:

“For those who have been holding BEP20-SHR, you are now able to swap it over to ERC20-SHR, and subsequently use the ShareRing App to swap your ERC20-SHR into SLP3-SHR.”

As one of the user-focused blockchain ecosystems, ShareRing allows the sharing, verification, storage and issuance of personal information and key documents.

ShareRing places great value on privacy and data ownership. They have built their own blockchain, ShareLedger, which uses technology from Tendermint. The report noted:

“Holders of BEP2-SHR can use the swap function inside Binance Wallet to swap from BEP2 to BEP20.”

ShareRing’s digital identity solutions have come in handy when revamping different sectors. For instance, the firm works with Chinese tech giant Tencent Holdings to deploy a blockchain-powered digital document and identity management solution to stimulate the travel sector, which is among the hardest hit by the COVID-19 pandemic.

As one of ShareRing’s main products, eKYC enables financial institutions to handle KYC processes faster and more efficiently. This allows customers to flexibly give and take consent for data sharing, supported by the blockchain on a decentralized platform. A Caribbean Credit Union has already tested and adopted it with success, and it ensures personal ownership of data and privacy, which highlights its potential for other financial organizations.

ShareRing is distinguished by its decentralized process, which places full control in the hands of the user, limits liabilities for businesses, and vastly improves convenience through the use of digital identification.By offering blockchain-powered identity management frameworks, ShareRing enhances privacy, accuracy, and efficiency.

ShareRing Adopts NFC Technology to Enhance eKYC Solutions

ShareRing, a blockchain-based ecosystem providing digital identity solutions, has integrated near-field communication (NFC) technology to make the electronic know your customer (eKYC) process more secure and reliable.

Per the announcement:

“NFC technology ensures that ShareRing IDs created with an e-passport have a high confidence level of attestation and trustworthiness since these are issued by a government body.”

The report added:

“It also reduces the likelihood of inability to extract the correct information from a document such as a passport since the information extracted from a chip is more reliable and trustworthy.”

Since ShareRing is a user-focused blockchain platform, it permits sharing, verifying, storing, and issuing personal information and key documents. Therefore, the NFC technology will come in handy for verification purposes. As a result, ShareRing will have more robust eKYC solutions. Per the report:

“NFC will be the future standard for ID cards for some time and therefore is supremely convenient for customers who already have NFC readers in their pockets. It, therefore, provides an excellent method for customers to process their ID documents during eKYC.”

As one of ShareRing’s main products, eKYC enables financial institutions to handle KYC processes faster and more efficiently. This allows users to flexibly give and take consent for data sharing, supported by the blockchain on a decentralized platform.

Meanwhile, the blockchain platform has updated the FaceMatch feature to enhance the face detection success rate. ShareRing pointed out:

“When new users sign up for a ShareRing ID, an official government ID must be provided in addition to a live selfie feature using our own technology called FaceMatch. This feature detects the face from the document and compares it to the user’s live selfie.”

Earlier this year, ShareRing integrated its native ShareToken (SHR) into the Ethereum and Binance networks through Multichain swap for enhanced digital identity solutions, Blockchain.News reported.

ShareRing Rolls Out Skinny ID for Frictionless Blockchain-Based Digital Identity Solutions

ShareRing, a blockchain-based ecosystem providing digital identity solutions, has launched Skinny ID, aimed at offering a seamless and frictionless onboarding process.

Per the announcement:

“Introducing Skinny ID, ShareRing’s simplified sign-up process that removes friction on the onboarding journey and allows users to explore the ShareRing ecosystem without having to provide any government IDs.”

Being a user-focused blockchain platform, ShareRing enables the issuance, storage, verification, and sharing of personal information and key documents. The report noted:

“Previously, ShareRing’s initial onboarding journey added friction to users who were stepping into ShareRing for the first time, which went against our mission to enable frictionless access. It was a more extensive sign-up process that asked for at least one piece of government ID followed by a selfie scan using our face match technology.”

ShareRing’s blockchain-powered platform also enables financial institutions to undertake processes more efficiently and faster based on its electronic know-your-customer (eKYC) product, which presents users with the flexibility to give data-sharing consent.

ShareRing recently integrated the eKYC process with near-field communication (NFC) technology to make it more reliable and secure, Blockchain.News reported.

Previously, ShareRing launched a new website with blockchain-enabled digital identities to usher in the Web3 era to tackle the challenge of the loss of autonomy on personal data experienced in Web2.

Given that the lack of the ability to manage digital identity and footprint in Web2 has been one the primary stumbling blocks to safeguarding privacy and ownership of data, ShareRing intended to solve this challenge with the blockchain-enabled website.

Heterosis Launches Dynamic NFT Flower Collection

Web3 has opened up new avenues of creative expression and individuality by allowing users to recreate their digital identity. NFTs have become increasingly personalizable and dynamic, making them a popular choice for digital art projects. Snark.art and OG.Art’s Heterosis project has taken advantage of this by launching a collection of dynamic NFT flowers on March 8.

The NFT flowers are breedable and customizable by holders, allowing them to create a hybrid species from the available catalog of flowers. As new flower traits are discovered, they spread across the entire population, creating diversification similar to nature. However, users must pay a fee to the owner of the flower they wish to breed with, creating two virtual flower markets – one for selling rare digital flowers and the other for selling DNA traits.

The collection was created by artists Mat Collishaw and Danil Krivoruchko, who wanted to create art that was unique to the metaverse. The mechanics behind the project are essential to Heterosis and can only be possible in a decentralized space. Krivoruchko stated that creating art for a project that can evolve with different traits was the most complicated digital art collection he has worked on.

The NFT flowers are housed in a metaverse greenhouse created by metaverse developers El-Gabal, modeled after a dystopian version of the National Gallery in London. The greenhouse can be accessed through a computer browser, mobile phone, and virtual reality sets, allowing users to explore the NFT garden through real-time audio-visual renderings in the cloud.

The Heterosis project offers users a unique opportunity to participate in a decentralized digital art project that allows for personalization and creative expression. With the development of new technologies, the possibilities for NFTs and Web3 continue to expand, providing users with even more ways to explore their digital identity.

Polygon Launches Web3 .polygon Domains with Unstoppable Domains

Polygon, a popular Ethereum scaling solution, has announced a partnership with Unstoppable Domains to enable users to create Web3 .polygon domain names. With this new offering, users will be able to log into Web3 applications, make use of human-readable wallet addresses, and create decentralized websites. The service will be available to an estimated 180 million users and 40,000 services across the Polygon blockchain ecosystem.

Unstoppable Domains, a blockchain domain provider, leverages Polygon to mint decentralized domains with zero gas fees. To date, over 2.7 million domains have been registered on the Polygon blockchain. Users will be able to use .polygon domains to create digital identities that are compatible across 750 applications, games and metaverse platforms. These can be used to login to web apps, as cryptocurrency wallet addresses and decentralized websites.

In addition to providing decentralized domain names, Unstoppable Domains also allows users to create profiles that can be connected to social media channels, acting as a digital identity across Web3 platforms and networks. A statement from Polygon Labs’ Vice President of Business Development, Sanket Shah, highlighted the importance of unlocking user-owned digital identity for Polygon users. He said, “Web3 domains will give our community a digital identity that they fully own, so they can log into dapps without giving away their personal information and transact crypto without lengthy wallet addresses.”

Unstoppable Domains will also offer access to premium .polygon gaming and digit domains from March 16. Decentralized domain services like Unstoppable Domains and Ethereum Name Service (ENS) have become increasingly popular over the past year, seeing considerable growth in domains registered.

In August 2020, American cryptocurrency exchange Coinbase partnered with Unstoppable Domains to offer payments through domain handles instead of cryptographic addresses. Coinbase then partnered with ENS in September 2022 to provide users with free “name.cb.id” usernames in an effort to replace alpha-numeric wallet addresses with human-readable alternatives.

Overall, the partnership between Polygon and Unstoppable Domains will provide a more user-friendly experience for interacting with Web3 applications, as users will no longer need to rely on lengthy wallet addresses or give away personal information. With digital identity becoming increasingly important in the blockchain space, this offering could be a significant step forward in creating a more accessible and user-owned Web3 ecosystem.

CFTC Receives DeFi Crash Course

The US Commodity Futures Trading Commission (CFTC) held their first Technology Advisory Committee meeting in Washington D.C. on March 22. As part of the scheduled meeting, members from the crypto space gave presentations to the CFTC, providing a DeFi crash course on key issues impacting the space. CFTC commissioner Christy Goldsmith Romero opened the meeting with remarks on the importance of understanding how DeFi works, as policy decisions related to DeFi are currently being made by regulators and lawmakers.

The panel began with an explainer on DeFi and blockchain technology, outlining the claimed benefits of blockchains, namely transparency, immutability, and privacy. Ari Redbord, head of legal and government affairs at blockchain intelligence firm TRM Labs, provided an overview of decentralization, highlighting the total value that entered DeFi in the last two years. Redbord concluded that DeFi is absolutely here to stay, and regulators should lead it in the right direction.

Carole House, executive in residence of venture firm Terranet Ventures, and Jill Gunter, chief strategy officer of blockchain infrastructure company Espresso Systems, then provided an overview of the current solutions for digital identity and noncustodial wallets, using Ethereum Name Service and MetaMask wallet as examples.

Michael Shaulov, founder of Fireblocks, and Dan Guido, founder of Trail of Bits, then presented the exploits and vulnerabilities that have taken place in the market. Throughout 2022, the top 10 exploits in crypto alone saw over $2 billion lost, with DeFi on the receiving end of 113 exploits out of the 167 carried out across the year.

The DeFi portion of the meeting ended with members unanimously voting for creating a Digital Assets and Blockchain Technology Subcommittee, which will focus on the “why of DeFi,” what problems it solves, use cases, vulnerabilities, and proposed legal and policy frameworks.

DeFi, short for decentralized finance, is a financial system built on public blockchains that seeks to disrupt traditional financial systems by enabling peer-to-peer transactions without the need for intermediaries. DeFi platforms provide access to financial services such as lending, borrowing, trading, and investing, with a focus on openness, transparency, and decentralization. The DeFi ecosystem has grown significantly in recent years, with DeFi’s total value locked reaching around $49.1 billion, according to DefiLlama, rising from around $15 billion at the beginning of January 2021.

Blockchain technology, the underlying technology powering DeFi, is a distributed ledger technology that enables decentralized transactions, immutability, and transparency. By removing intermediaries and enabling direct peer-to-peer transactions, blockchain technology provides a more efficient, secure, and transparent way of conducting transactions.

Digital identity is another critical aspect of DeFi, as it enables individuals to participate in the DeFi ecosystem without having to disclose their personal information. Digital identity solutions such as Ethereum Name Service and MetaMask wallet provide users with noncustodial wallets, enabling them to hold their own private keys and manage their own funds.

Exploits and vulnerabilities are an ongoing concern in the DeFi ecosystem, as the space remains largely unregulated. Hacks and exploits can result in significant financial losses for users, highlighting the need for more robust security measures and protocols.

In conclusion, the CFTC’s Technology Advisory Committee meeting highlighted the importance of understanding DeFi and its key issues, including blockchain technology, decentralization, digital identity, and exploits and vulnerabilities. The meeting also emphasized the need for regulators to lead DeFi in the right direction and proposed legal and policy frameworks to address current issues and vulnerabilities.