Korea’s ambitions to launch Tier 1 blockchains will accelerate in 2023

Korea's ambitions to launch Tier 1 blockchains will accelerate in 2023

Why Startups and Fortune 500 Companies Are Stepping Up DeFi Efforts and Launching Tier 1 Blockchain

In 2022, we have seen more major South Korean financial companies than ever before jump into decentralized finance (DeFi) as they embrace new and creative forms of financial innovation. This local trend tracks broader cryptocuriosity sentiment among global organizations. In particular, institutions are beginning to explore the realms of DeFi and decentralized exchanges, an area of ​​the crypto ecosystem that currently underserved.

For example, most recently, JP Morgan conducted its first public chain DeFi trade as part of a pilot program to explore potential DeFi applications in wholesale funding markets. Clearly, Fortune 500 companies have begun to realize the benefits of using DeFi and blockchain technologies. Even the largest financial players are joining the blockchain-based tokenization of real assets.

As for the South Korean mega-corporations, they seem to have a particular taste for launching their own Tier 1 blockchains. For those unfamiliar, a “Tier 1” blockchain refers to an underlying layer network such as Bitcoin, BNB Chain or Ethereum, and its function as an underlying infrastructure refers to a wider Tier 2 ecosystem, etc. Independent and often already fully operational core networks, these blockchain networks provide a potentially transformative opportunity to return value to users and customers. Expect more in 2023.

Better control and more autonomy

In 2022, we are seeing how companies and developers are increasingly concerned about their own autonomy. Breakthrough moves from mainstream Web2.0 platforms, such as Google’s adjustments to Play Store fees, are changing how users and developers perceive the value of Web2.0 models. By launching their own layer 1 blockchains, companies seek to regain control over their own ecosystems.

Native assets on these Tier 1 platforms function as a shared medium of exchange within the network, representing a revolutionary shift towards a user-owned economy. In 2023, we predict a growing demand for decentralized application (DApp) development, utility, and transactions as the focus continues to shift towards greater control and autonomy. DeFi is likely to gain an edge over centralized finance (CeFi) applications such as centralized exchanges (CEXs) due to greater transparency for all stakeholders.

In the early days, Tier 1 core networks were the focus of the entire decentralized cryptofinance system. Just as the mainnets started the crypto revolution, the appeal of greater independence and freedom of action is now once again pushing companies to launch their own Tier 1s. As this trend intensifies in 2023, we expect Korea to have a more inclusive and resilient crypto community, especially in the gaming space. .

All eyes on gaming giants

In particular, gaming companies have started launching their own layer 1 blockchains in 2022, and this trend has great revolutionary potential in the financial, technology and gaming sectors. While this phenomenon is common in South Korea, we are also seeing similar changes in the Japanese market. Take, for example, Japan’s Oasys, which recently announced the launch of its own Layer 1 network.

Web3 games have quickly changed the video game landscape in 2022. Leading South Korean blockchain platforms such as Bora Network.

WEMIX is an NFT blockchain gaming platform developed by WeMade Tree, which in turn is a subsidiary of WeMade, the South Korean game developer behind The Legend of Mir franchise. WEMIX combines core gaming content with blockchain technology. By introducing technology that lowers barriers to entry for both developers and users, WEMIX has increased mainstream adoption, contributing to the development of sustainable games.

Pay special attention to safety

By building their own core network and the broader ecosystem associated with it, companies can better control their revenue and revenue models, which is not possible in Web2.0. This includes activities such as issuing tokens and setting up transactions or staking fees. The new paradigm is one of “real ownership” of the network, as opposed to the “IOU system” that exists today, which supports larger centralized platforms.

However, while self-expansion can provide more autonomy, it comes with a directly proportional level of responsibility. The security of any blockchain is fundamental to its sustainable operation and the creation of ongoing trust within the wider ecosystem. Take, for example, the Ronin layer 2 network hack earlier this year. The incident significantly damaged the Axie Infinity community’s trust in the game’s developers.

The enhanced integrity that smart contract auditing guarantees is essential for the success of these newly created networks, both before and after launch. Public release of an insecure core network leaves the entire network and its users vulnerable to attackers. Auditing smart contracts should be considered a prerequisite for the launch of any blockchain, especially level 1.

In summary, this Tier 1 launch acceleration reflects a widespread desire to circumvent unfair revenue models within Web2.0. We foresee further changes and significant innovations on this front in 2023. The rise of Tier 1 will force existing platforms to rebuild their infrastructure to accommodate new players. Where South Korea has begun to realize this potential to strengthen the user-owned economy, we are confident that a Tier 1 takeoff will not remain a regional phenomenon for long.

As a security researcher at DeFi infrastructure service provider, Jasper Lee conducts security audits of various DeFi and NFT services such as KLEVA and Klaycity. The South Korean-headquartered company aims to be SWIFT for Web3.0 and connect the Korean DeFi ecosystem with the rest of the world. The company specializes in DeFi product development and smart contract auditing, offering one-stop custom solutions for financial institutions.

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