The Web3 industry is entering a "new era of Compliance". Have we been misguided in our pursuit of "mass adoption"?

Recently, there has been a lot of negative discussion in the industry about Ethereum. Not long ago, several industry veterans had an in-depth discussion lasting three hours on the topic of "What has happened to Ethereum?", covering various aspects such as the game theory relationship between Ethereum and Layer 2 networks, ideology, organizational structure, etc., which fully reflects the deep concern of industry insiders for Ethereum.

As a long-time observer of industry trends, I also have some unique insights to share. These views may not be mainstream, but I believe that only through rational and candid discussions can we promote the industry to develop in a healthier direction.

In the past year, I have been fortunate to be a founding member of a fintech startup in Singapore, deeply involved in collaboration projects with several central banks in the areas of tokenization and cross-border payments. This experience has broadened my perspective beyond the Web3 circle and has made me more attentive to the strategic movements of global central banks and traditional financial institutions.

By simultaneously focusing on the development context of the Web3 space and the traditional financial system, I find that the two fields present a clear state of disconnection. In the Web3 world, new technological infrastructures and concepts are emerging one after another, but most projects seem to focus more on short-term profits rather than real application value. Meanwhile, traditional financial forces are actively embracing blockchain technology, viewing it as an important opportunity to upgrade the existing payment and financial systems.

In 2024, the Bank for International Settlements ( officially proposed the concept of "Finternet" (financial internet), positioning tokenization and blockchain technology as the next-generation paradigm of the human financial currency system. This initiative caused a stir in the traditional financial sector, pushing global financial institutions and central banks to accelerate their exploration in areas such as tokenization infrastructure, asset digitization, and payment applications.

The BIS's strategic decision is not a hasty move, but a prudent choice based on years of in-depth research. As early as 2018, the BIS began systematic research on Web3 technology and established an innovation center in 2019 to carry out a series of experimental projects related to blockchain and tokenization.

Among the many projects of BIS, the most representative is mBridge—a CBDC cross-border payment bridge initiated by the BIS Hong Kong Innovation Center in collaboration with multiple central banks. However, against the backdrop of complex geopolitical situations, this project unexpectedly became a tool for BRICS countries to circumvent SWIFT sanctions, forcing BIS to temporarily withdraw.

Another important project is Project Agora, which brings together seven major central banks and more than 40 global financial giants, aiming to utilize blockchain technology to build a globally unified ledger system and optimize the existing financial monetary system. These initiatives indicate that traditional financial forces have shifted from observation to fully embracing blockchain technology.

In contrast, while the Web3 industry often shouts the slogan of "mass adoption," it actually focuses more on short-term speculation. This stark comparison raises the question: should the Web3 industry also reconsider its development direction as traditional financial institutions are actively promoting the large-scale application of blockchain technology?

Looking back at the "hit projects" in the Web3 field in recent years, it is not difficult to find a pattern: most of the so-called projects that achieve "mass adoption" are essentially speculative games dressed in innovative clothing. Whether it is MEME coins, GameFi, or SocialFi, they have failed to truly address the actual needs and pain points of users.

Even more concerning is that the entire industry seems to have become a breeding ground for hackers, phishing, and scams. According to an FBI report, American citizens suffered over $5.6 billion in fraud losses in the cryptocurrency sector in 2023 alone. This harsh environment forces us to reflect: are we pursuing a misguided direction of "mass adoption"?

It needs to be clear that Web3 should not, and cannot, merely stop at becoming a global casino. It needs to develop real applications that have sustainability and practical value. Payment and finance are undoubtedly the areas where Web3 technology has the most potential to land, and this has been agreed upon by traditional financial powers, governments, and the market.

For Ethereum or the entire industry, the core issue may not be whether the technological direction is correct, but whether we truly understand what valuable applications are. If we continue to ignore market demand and overly focus on conceptual hype, will we face the risk of being surpassed by the traditional financial system?

At this critical moment, regulatory compliance is both the biggest challenge and the most promising opportunity. An increasing number of signals indicate that the Web3 industry is gradually moving from the "wilderness era" to a "new era of compliance." This transformation is reflected in several aspects, including the improvement of regulatory frameworks, the standardized participation of traditional financial institutions, the compliance upgrades of infrastructure, and the compliance transformation of Web3 projects.

![The Web3 industry is entering a "new era of Compliance". Are we putting our utmost effort into "Mass Adoption" down the wrong path?])https://img-cdn.gateio.im/webp-social/moments-cc21af8be1bb2cfaf4f31a2740d6ba6b.webp(

Undoubtedly, the future battleground of blockchain technology will focus on areas such as innovation in payment systems, tokenization of physical assets, PayFi, and the integration of DeFi with traditional finance. This means the industry must face interactions with regulatory bodies and traditional financial institutions head-on; it is not a matter of choice, but an inevitable path for development.

Therefore, we need to think carefully: should we choose to embrace regulation and seek a path of symbiosis with the existing financial system, or should we adhere to the "decentralization" concept and continue to linger in the regulatory gray area? Should we pursue a purely "casino"-style mass adoption, repeating the speculative-driven path of the past decade, or should we focus on creating real, sustainable value and truly realize the revolutionary potential of blockchain technology?

The Ethereum ecosystem is currently facing a structural imbalance characterized by excessive stacking of infrastructure and a relatively lagging application ecosystem. In this context, Ethereum not only has to deal with challenges from emerging public chains in terms of performance and user experience but also needs to be wary of the competition from traditional financial forces that are strategically positioning themselves in the actual application market with compliant public permissioned chains.

How to seek breakthroughs under such dual pressure, while maintaining technological innovation without losing market competitiveness, are key challenges that Ethereum must face head-on in its pursuit of solutions. As industry participants, we should all contribute our efforts to promote the development of Web3 towards a healthier and more valuable direction.