Xangle Visits KBW 2022: ① BUIDL Asia

진종현(CH)외 2명
Senior Analyst/
Aug 17, 2022
Translated by Rhea & elcreto

Xangle Visits KBW 2022: ① BUIDL Asia



The Xangle Research Team visited BUIDL Asia 2022, which was held between last August 4 and 5. As an in-person event returning after a three-year absence, it was swamped with interested participants, making it hard for everyone even to find a seat. It was a clear demonstration of how much demand was built up for an offline and in-person blockchain event during the unexpected hiatus. With none other than “Vitalik Buterin” taking the stage as the opening speaker on the first day of BUIDL Asia 2022, the first session of the first day of the event undoubtedly received the most attention. In this article, we would like to briefly discuss the following four talking points that caught Xangle’s interest the most.

  • Competition Between Modular and Monolithic Is On-going
  • Pax Digita: The World of Digital Peace Coming Our Way
  • Exponential Growth of DeFi: Where Should It Be Headed?; The Rise of MakerDAO Amid Crypto Winter
  • Finding Investment Opportunities Lurking in the Crypto Winter


Competition Between Modular and Monolithic Is On-going

The hottest topic of BUIDL 22, bar none, was the competition between the team modular and the team monolithic. 

Illia Polosukhin, the founder of NEAR, compared this to the rivalry between Windows and Apple. Putting modular in place of Windows and monolithic in Apple will help us understand the whole situation more easily.

A modular chain is structured in a way that separates and divides each layer with different roles by functionalities such as data availability, consensus, settlement, and execution. “Since Ethereum’s L1 is a base layer, it should eventually stop having changes [such as hard forks]. The less change, the better,” Buterin said. He emphasized that Ethereum L1s will be dedicated to handling security for L2 solutions in a complete modular blockchain ecosystem as settlement layers. He showed much confidence that various L2 solutions based on Ethereum L1 will go on to generate various added values such as convenience, efficiency, and speed.

What could be the reason behind Buterin putting so much effort into securing security for Ethereum and taking such a positive view of the numerous L2 solutions out there? It lies in the rapid scalability of the modular model.

Like Windows, although modular chains take their foundation on L1 base layers (like Microsoft or Android OS), they have a high level of freedom to build what they want per project (like each PC or mobile device maker). This makes it much easier for projects to experiment with various solutions on each layer level in the early phase of their scale-up.

In fact, various scaling solutions, such as Optimistic Rollups, ZK Rollups, Validium, and Volition, are being developed and built in the Ethereum ecosystem, with their adoption also steadily underway. Twelve of such L2 solutions, including StarkNet, Optimism, and Celestia, presented their roadmaps for developing an Ethereum-based modular ecosystem during this conference.

Post-Merge, Buterin shared, Ethereum will undertake various upgrades, including the following:

  • Danksharding
  • Verkle Trees
  • Single-slot Finality
  • Light Client Infrastructure

With most of these focused on compressing data and increasing the number of nodes (enhancing security), Ethereum seems to be hard set on establishing its position as the “platform for platforms,” in other words, the major base layer for L2s.

However, Illia Polosukhin, the founder of NEAR, in the opposing camp supporting monolithic blockchains, stated that it must be easy to use for both users and developers for the mass adoption of Web3 to be successful, reiterating that the monolithic blockchain is the ultimate answer to providing such convenience. He also drew a very positive future for monolithic chains, even going as far as saying that parallelization is the only viable scaling solution. Polosukhin is certain that monolithic blockchains that can process all the blockchain functionalities on a single layer have clear and definite advantages over modular chains in terms of UI/UX and connectivity, much like how all of the different Apple devices are connected and support continuity in use via its operating systems.

Polosukhin claims that while modular chains offer easy scalability and “fast commercialization, the projects’ usability tends to drop over time” since each project is developed in different environments and for different goals. The NEAR Foundation Grants Program providing support for the onboarding of various projects working toward advancing commercialization, and the launch of JavaScript SDK, which can greatly improve the convenience for developers, seem to be illustrations of how focused NEAR Protocol, and the monolithic supporters by extension, is on delivering convenience for both users and developers.


  • The “Windows vs. Apple” saga is still on-going after decades of rivalry. Although Windows won the race to commercialization based on the modular model, it is slowly but steadily losing its market share to Apple, which has taken the upper hand in UI/UX and connectivity. It’s the same with the blockchain ecosystem. Ethereum, considered the representative modular chain, was able to reach dApp development and user adoption quickly. However, it will not have its monopoly on the market forever. The competition between “modular vs. monolithic” blockchain may continue for decades on end.
  • While the ecosystem of team modular is relatively established with one L1, Ethereum, at its center, team monolithic is still much divided in a fierce competition for commercialization with many projects (such as Solana, NEAR, Aptos, and Sui) proposing different consensus mechanisms and boasting their technological prowess. It remains to be seen which of the chains will end up setting itself as the “Apple” of the monolithic ecosystem.
  • It was rather unfortunate that the projects participating in the sessions and panel discussions in BUIDL22 heavily leaned toward the modular blockchain. In my personal view, it would have been more interesting if we were to have a more heated but balanced discussion from both sides with major mainnets like Solana, Aptos, and Sui, representing the monolithic supporters.


Pax Digita: The World of Digital Peace Coming Our Way

On the second morning of BUIDL Asia 2022, we had a chance to take a moment and think about the direction the world we live in is headed with a presentation given by Jason Potts, an economics Professor at RMIT University. In his presentation, Potts stated that the age of Pax Digita is coming. At a high level, the talk was on the systematic changes that blockchains will bring on. The claim is that as the cost of trust decreases, huge economic growth and systematic evolution would be brought on, and that blockchain is behind all of these. Potts likened blockchain to technologies like writing. I found the saying, “Writing is at the core of all technology,” particularly moving.

Potts started his session by defining two different types of technology and explaining that blockchain falls under the category of institutional technology. While the general purpose technologies, such as electricity and the internet, make great contributions toward economic growth, they are limited to simply making improvements on what was already in existence. Institutional technologies refer to those that enable us to do things with a brand-new approach and method.

Blockchain is a mechanism that allows us to share knowledge in a more efficient manner since it makes it easier to share local knowledge. For example, different departments in a government do not have complete trust in the data they exchange. Because of this, we built a structure where the trust is delegated to a few trusted institutions.

A blockchain-built digital economy can replace such entrusted institutions, allowing for more efficient knowledge sharing and reducing costs. Potts named such cost savings “digital surplus.” However, the digital surplus blockchain creates is not a simple productivity increase but rather a system-level cost saving. It refers to an overall reduction of the necessary cost required for many people to carry out activities for a certain goal. The cost thus saved can be redirected to operating new businesses.

Potts said that the blockchains “will cost less than markets or governments” because it costs less to prove ownership with blockchains. People have been establishing various institutions to maintain trust, which is essential in proving ownership. In the United States, 35% of the labor population works for trust-related jobs, and USD 29 trillion is spent every year to maintain such trust. Blockchain is a technology that can replace such institutions built to ensure trust, practically automating the ownership in the digital realm. Potts referred to this as “Pax Digita,” the digital peace.

Social agreements, such as identity, assertions, settlement, promises, conflict management, and contractual enforcement, are a form of services conventional government and economic institutions provide. Pax Digita refers to an age where we see an emergence of hegemonic crypto order that provides such services instead. Since this crypto order can lessen the social cost of maintaining and ensuring trust, it can not only enhance productivity but also become the foundation for new technologies to develop.

Web3 digital economy is what goes on the new “institutional stack” to be built on top of blockchains. As a new digital economy separate from the existing economic order based on governments and industry emerges, our global economy is headed toward not a post-industrial but a digital economy. Potts stated that the concept and nature of ownership in a digital economy are fundamentally different from that in the existing institutions, and added that such a fundamentally different change is bound to be followed by a new set of problems. One of such problems is the matter of coordination. Who will decide the direction of blockchains’ development? 

New tools are required as we work to make a new economic system. The crypto asset market has produced tools such as the ERC20 token standard, AMM, ERC721, and NFT marketplaces after going through various experiences such as the ICO boom, DeFi Summer, and NFT Summer. The year 2022 is in the spotlight with anticipation that it will be the year of DAOs. Potts noted that we need to focus on creating new tools because the more tools we have, the more innovations we can create.

It occurred to me that the answer to why governance has emerged as the hot topic in the crypto sphere lately may be found in the fundamental changes brought on by blockchains. The last page of Potts’ presentation slide read, “We’re in the business of designing economies.” I was pleasantly surprised and impressed that the current crypto asset market has been embraced as one area of serious academic studies rather than as a mere playground for anarcho-capitalists.

All these thoughts came down to one conclusion: we need experts and specialists in many different areas in order to build such a new system. Since we are in the phase of developing infrastructure, developers are of utmost importance. However, we may find ourselves in desperate need of philosophers in the digital economy to be built on blockchain in the near future.


  • At the moment, it is difficult for us to predict the shape of the future digital economy. Potts started his presentation with questions like, “What happens when we get an L1 that’s 1,000 times the ones we have?” and “What happens when we find a new utility for smart contracts?” It felt like it might be too haste an attempt to diagnose the future too early.
  • Potts’ lecture got me to recall Balaji Srinivasan’s network state. Are we in the process of building a truly supra-governmental economic system? The start-up societies Potts talks about may not be entirely unattainable. Maybe due to its relatively small size, the crypto market is still showing a tendency to follow the traditional market. However, it may just be a matter of time.
  • Blockchain is not just a break from the traditional financial system model but a way to reduce the social cost incurred in that system. What if we were to funnel the cost of keeping up such institutions elsewhere? For example, could we possibly dream of a sustainable future where we eradicate environmental issues, famine, and the gap between rich and poor?


Exponential Growth of DeFi: Where Should It Be Headed?

What’s your prediction for what DeFi would look like in the future?

As of Apr 2022, the TVL of the DeFi market hit $250B, posting a 250-fold growth in just a couple of years. DeFi has built a closely knitted ecosystem, housing DEX, lending, derivatives, stablecoins as well as chains, aggregators, and wallets.

Even with the downfall of Terra’s Luna that wreaked havoc on the confidence and activities in the DeFi market, it is undeniable that DeFi is an innovation that smart contract has enabled and an indispensable ecosystem that invigorates activities across various domains.

The DeFi ecosystem and the potential of stablecoins also were the primary topics of Messari’s presentation. It saw continued development of stablecoins as a driver for the growth of DeFi. The underlying idea is the flow of minting fees into the protocols that would only arise more vibrantly from larger amounts of crypto collateral and algorithmic stablecoins.

In the aftermath of the Luna debacle, questions linger over the sustainability of algorithmic stablecoins. No one seemed to disagree with the pressing needs for more safer and sustainable solutions.

I believe DeFi will always be put back into the spotlight when it comes to boosting on-chain activities, preventing off-chain fund transfer, and managing tokenomics after protocols establish their domains.

The Rise of MakerDAO Amid Crypto Winter

Indeed, the stablecoin that grabbed the most attention in the winter was MakerDAO’s DAI. MakerDAO is a collateralized lending platform built on Ethereum. Users can issue stablecoin DAI by locking their assets as collateral in the DAO vault.

The protocol has consistently pushed for collaboration with TradFi, as best illustrated by the following examples:

  • In Oct 2021, Societe Generale (SG) collaborated with MakerDAO to issue a collateral-backed 23.5B DAI loan for refinancing (rated AAA by Moody’s and Fitch).
  • In Jul 2022, MakerDAO went on to approve a 100M loan for Huntingdon Valley Bank in Pennsylvania.

MakerDAO says that it would start raising the adoption of RWA (Real World Asset) as the next step to DeFi’s expansion. Apparently, the focus of the protocol seems to be on a steady growth guarded against high volatility. 

As the slogan reads, “There is no CEO. That’s the point,” the transfer of power is considered to have been successful given that the foundation returned the tokens to the DAO after bootstrapping the project in its initial stage. Participants’ active engagement in discussion (10-20 topics daily) and governance is also considered desirable. It warrants attention to see how it collaborates with TradFi and real world assets and where the decentralized governance is headed.

Finding Investment Opportunities Lurking in the Crypto Winter

In another session I found impressive, crypto VCs discussed how they all agree on the crypto winter and how they are investing in the market. Most notably, they thought of a bear market as an opportunity to discern good investments and study projects more in depth. A significant chunk of the discussion consistently revolved around the distinction between Web2 and Web3 regarding ownership—or more specifically, of identity and data.

As for risk management, they all seemed to agree that the increasing number of regulatory frameworks being introduced across the world was one of the biggest risks facing the industry. Indeed, the changing regulatory landscape needs to be watched closely in the second half of this year.

Another point the VCs saw eye to eye on was the importance of the relationship between founders, core members, and investors for the success of VC investment. In particular, they emphasized investor-friendly communication and a sustainable roadmap.

The discussions so far seem to have boiled down to this: despite the ailing prices and contraction of the crypto market, this “winter” period is the watershed that would reveal the real investors and real deals. From a risk-reward perspective, this may have been perceived as an opportunity to buy a quality asset on the dip.


  • The DeFi market is expected to restore confidence and start growing again. In the course of it, numerous attempts and experiments will be done with stablecoins. Most notable examples would include collaboration with TradFi and RWAs and fresh attempts with algorithmic stablecoins.
  • Collaboration between Web2 and Web3 companies will continue, as well illustrated by MakerDAO. Increasingly, traditional large enterprises are expected to enter the P2E and NFT markets, potentially bringing a state of mass adoption.
  • VC investors are looking at the crypto winter rather as an opportunity. They are taking an approach where they discern quality projects/protocols and buy the dip. One of the things most evident was their belief that the good relationship they build in tough times tends to return bigger rewards in the bull market.



BUIDL Asia 2022 was held on Thursday and Friday before KBW (Korea Blockchain Week) officially took off. As such, it enjoyed attendance and participation by an impressive number of projects, builders, and investors; and also reflected the magnitude of potential demand for in-person events as BUIDL Asia served as a sort of a preview for KBW 2022. With a wide variety of projects participating in the event and opportunities to socialize between sessions, BUIDL Asia 2022 was a great chance for investors and developers to connect and communicate in person. Keeping in mind that “real deals and real investors will surface in the Crypto Winter,” Xangle will also attend many such events and do our part to contribute toward the right crypto ecosystem.


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