Editor | Colin Wu

In this issue of Wu's AMA, we focused on observations and feelings from the Hong Kong Consensus Conference, discussing the current state and future of the crypto industry. Participants included Wu's chief editor Colin Wu, XHunt founder DeFi Teddy, Hubble AI CEO & CTO Leon Liu, Conflux Hong Kong ecosystem head Esther, Web3 researcher Haotian, macro hedge fund PM Albert Luxon, Cindy from Jam Technology, as well as well-known crypto KOLs like Nana and Kirara.

The guests shared their views on the future of the crypto industry and their experiences from the conference. With the market's downturn and the rise of AI technology, the crypto sector is experiencing emotional fluctuations, and many people are beginning to feel pessimistic about the industry's prospects. The guests generally believe that the "consensus" in the crypto market has changed, and many traditional cryptocurrency projects are facing new challenges. Despite this, some believe that the idea that "the crypto market is dead" is overly pessimistic; the industry still holds potential, especially in areas such as payments, compliance, and stablecoins. The combination of AI and Web3 is considered an important direction for future development, particularly the integration of decentralization and the AI economy, which could bring new opportunities.

Additionally, guests shared many amusing anecdotes and outrageous experiences from the conference. Overall, while the current market faces challenges, many participants still hold hope for the future, looking forward to finding new directions for development and potential tracks.

The views expressed by the guests do not represent the opinions of Wu, nor do they constitute any investment advice. Please strictly follow local laws and regulations. Audio transcription was completed by GPT and may contain errors. Please listen to the full podcast on platforms like Xiaoyuzhou and YouTube.

Part One: Sharing Insights from the Hong Kong Consensus Conference

Colin: The Hong Kong government places a high value on the Consensus Conference, but it lacks industry hotspots, and the atmosphere at the venue is relatively cold

Colin: I didn't participate much in the events, but I can share a few of my observations.

Firstly, I tweeted that day, and a friend joked that it was the first event where you had to buy your drinks yourself — even at the bar, you had to pay out of pocket. I saw many comments echoing this sentiment, which I found quite amusing. To some extent, this reflects that the overall atmosphere of this Consensus Conference was a bit desolate.

The second point is a rather interesting observation. I feel that the Hong Kong government places great importance on this Consensus Conference. Perhaps they believe that Hong Kong’s role internationally has been somewhat diminished, leading them to prioritize such large conferences initiated by overseas parties. You can see that there were many big names speaking this time, even announcing several new policies during the conference. From an overall atmosphere perspective, the government indeed pays significant attention to this Consensus Conference.

The third impression is that indeed many foreigners were present. I saw people like Joseph Lubin came to Hong Kong, along with other representatives from overseas projects. However, overall, it felt like there weren't many true ground-level hotspots.

While the Hong Kong government highly values it, the hotspots relevant to the industry on the frontlines are relatively scarce. On one hand, there are not many overall hotspots in the industry right now. Currently, the two major hotspots are the prediction market and stock tokenization. But both of these directions face high compliance difficulties in Hong Kong, so although they are very popular globally, it's challenging to see actual implementations or in-depth discussions on these topics at this Consensus Conference.

Another point is that the mainland just released policies regarding RWA (Real World Assets on-chain). I noticed that many people discussed this topic at the conference, including people like Xiao Feng. However, since the Consensus Conference was predominantly organized by overseas parties, the level of discussion regarding new developments in RWA on the mainland and Hong Kong was not high. Perhaps in a few months, activities hosted by groups like Wanxiang will feature more discussions on the new developments in mainland and Hong Kong RWA.

Haotian: From "everyone talks their own," to "collective pessimism," the shift in industry sentiment at this Consensus Conference

Haotian: My most direct impression from the last Consensus Conference was that everyone was talking about their own topics. For instance, those involved in DeFi were calling for RWA, some were calling out AI, while others discussed communities — various tracks were competing for attention, but you would find that they really were playing independently without forming a true consensus or a collective force. There wasn't a widely accepted, jointly optimistic major trend, which was my impression from the last time.

But this time, what I felt instead was the presence of "consensus" — that "the crypto market is not doing well", "this industry is doomed." A unified performance of bearish sentiments and pessimism was a strong feeling I had. Of course, this does not represent my personal view.

The reason I specifically participated in this Consensus Conference, which was close to the New Year, was that I originally thought it would be different from the events in April and May that were more Asia-centric. Those events had a greater presence of Chinese projects, but I thought this time, with more overseas project initiators, their overall optimism might be better, or they would not be so easily swayed by emotions about the future.

However, after observing, I found it potentially differed from my expectations. The Chinese projects I interacted with, along with some KOLs, indeed had a more bearish tone. But I also networked with individuals from some overseas projects on-site, and they seemed to be in a worse state. They conveyed to me the feeling that emotions were irrelevant to them, the industry's future had nothing to do with them; they were focused on doing their own things, which you wouldn’t be able to comprehend. The overall presentation was one of numbness towards the industry, and even a little bit of complacency.

I actually think this state is worse. It would be better if everyone felt the industry was failing, collectively criticized it, and then sought new opportunities than to maintain an outward appearance of positivity while internally being completely unaware of the external sentiments, lacking a sense of urgency. Overall, I was quite disappointed personally.

Cindy: The Consensus Conference felt like a "top-tier club," bumping into Bullish CEO, the surreal scene of Sun Yuchen's banana NFT

Cindy: My experience at this Consensus Conference was rather absurd, a dual experience of absurdity and surprise.

The first feeling was that I genuinely met many of the world's top players at this conference; there were no retail investors, predominantly industry core figures. Moreover, you never know who is sitting next to you. For example, on the morning of the 11th, while I was listening to a presentation at the Consensus main venue by a manager from Grayscale, I noticed a gentleman next to me applying hand cream that smelled particularly nice. I added him on WhatsApp to ask him for the brand. After about half an hour, this person went on stage to present, and I realized he was the CEO of Bullish, Tom Farley, the one who invested in CoinDesk.

Additionally, while having coffee, I ran into the CEO of Securitize, Graham. The day before, BlackRock announced buying UNI (Uniswap token), and the compliance review was assisted by Securitize.

The craziest incident happened on the night of the 10th at a cocktail party, where Sun Yuchen also showed up. After dinner, he said he'd give everyone a dessert and distributed a huge box. When opened, it contained only one banana. At that moment, I felt it was particularly absurd but also quite amusing.

Cat Brother: Haha, that's like the NFT he bought earlier, right? The artwork with the banana taped up.

Cindy: Yes, that's right.

Teddy: The main venue felt deserted, institutions are entering, AI diverting funds and attention becomes the new "consensus"

Teddy: This time, my experience was quite different from previous Consensus Conferences. In the past, I would usually stay in the main venue for at least half a day or even a full day, but this time I spent very little time in the main venue, maybe just an hour.

Because after looking around, I found that many projects this time were not ones everyone was familiar with; they were more institutionally focused and related to compliance. When chatting with them, on one hand, I wasn't familiar with the projects, and on the other hand, there weren't many common discussion topics. So, the only in-depth conversations I had in the main venue were just some simple exchanges with Alibaba Cloud.

In fact, I felt that the side events were where more communication happened. For instance, at the BNBChain event, I was able to meet quite a few people and had better communication opportunities.

A very intuitive takeaway from this Consensus Conference for me is: the institutional era has arrived. I sense that institutions are entering while retail investors are exiting. Once institutions come in with large amounts of capital, they will emphasize compliance, licenses, and regulatory frameworks, which aren't very friendly for retail participation. So, from my personal experience, this Consensus Conference felt like a significant turning point between institutions and retail investors.

Regarding whether "the crypto market is dead," I believe it certainly won't die. The spirit of decentralization is still there, and the demand for it continues to exist and will remain strong for a long time.

However, the biggest problem now is that AI has taken away much attention from crypto, as well as funding, with many builders shifting towards AI sectors. Therefore, the "consensus" at this Consensus Conference isn't necessarily that the crypto market has died but that "we need to shift to AI."

The so-called "shift to AI" can be viewed on two levels. The first is a complete transformation, moving away from crypto to directly enter the pure AI sector, such as developing products around OpenAI and similar ecosystems. The second is the combination of Web3 and AI, such as creating AI agents or using AI technologies to cater to the needs of the Web3 industry, like helping Web3 projects with advertising, growth, and operations.

In summary, my feelings are encapsulated in three key words: institutionalization, shifting to AI, and an overall lack of high spirits. Whether project parties or KOLs, the sentiments are not particularly upbeat. I'll mention these first.

Nana: The Chinese sector focuses on price and bottom-fishing, the English sector is more relaxed, and AI becomes the "standard narrative" for projects

Nana: This time, I attended several Chinese and English networking events.

Starting with the Chinese sector, it was mainly situations related to exchanges. I felt a clear sentiment: in the Chinese sector, the core focus is still very much on coin prices. In almost every Chinese meeting, I’d be asked similar questions, such as whether the current price is a good time to bottom-fish or if there are any worthy cryptocurrencies to invest in. The overall sentiment seems to be that they are more sensitive to market fluctuations, and their emotions are more influenced by prices.

Then on the English side, I attended a gathering organized by a friend, resembling a get-together for KOLs and project parties, which included many representatives from Dubai and Europe. In that setting, almost no one talked about coin prices. The focus was more on relaxed exchanges, chatting about life and ideas. They basically did not address their views on the market or price trends. So I’d perceive that they were generally more optimistic, or at least not as affected by short-term market emotions.

However, in the Chinese sector, perhaps because many people generally hold heavier positions, they are more sensitive to price changes, leading to more noticeable emotional fluctuations.

Overall, I actually agree with what Teddy just said. Previously, I would have thought if the market were very bleak, the number of projects would reduce significantly. However, this time, I attended various public chain events and found that many projects are still being developed; it’s just that they are more concentrated in type.

There are essentially a few categories: First is AI. Almost regardless of the track, everyone is adding some AI elements. Whether in payments or dealing with RWA, they pile on an AI narrative and align towards that direction.

Additionally, I saw some founders who originally focused on Web3 directly pivoting to pure AI projects, potentially because more capital is flowing towards AI sectors now.

But I think, for those involved in projects, it’s vital to clearly identify what they truly excel in. Because I feel that AI and Web3 actually differ significantly in their financing logic and methodologies. Blindly transitioning may not be a beneficial choice.

Esther: Prediction markets and stablecoins are clustered together, market makers are returning, the battle for the Chinese market under international Consensus Conference

Esther: The following views represent my personal opinion and do not reflect any institutions.

This time attending the Consensus Conference gave me quite a different impression.

First, I noticed a significant number of teams dedicated to prediction markets, feeling like there are hundreds of teams working on it. The backgrounds of the participants were also varied, with projects being incubated by compliant brokerages, and even teams with backgrounds in actual offline gambling, like those from the casinos in Macau, also working on prediction markets. They realize that prediction markets might become a "new type of casino" on-chain in the future, and they already have natural traffic; aside from traditional gambling, they do not want to miss the potential explosion path on-chain.

My second observation is that there are particularly many Chinese teams working on stablecoins. It’s not just the common dollar stablecoins; there are non-dollar stablecoins in progress too. I even heard about a team that develops a live-streaming platform, mainly servicing the European and Middle Eastern markets for tipping, wanting to issue its own stablecoin. They don’t want their settlement to rely entirely on other stablecoins, hoping to maintain control over clearing and issuance rights. You will find that even application-layer teams now want to be stablecoin issuers.

The third observation is that market makers are notably active, beginning to "operate." Because projects are fewer and liquidity is lower, they are likely under greater performance pressures, thus proactively reaching out to project teams.

Another feeling is that this Consensus Conference is indeed very international. People from various regions and tracks came, including those from Europe, the United States, Japan, Korea, and Southeast Asia.

Additionally, a key point is that large European and American exchanges like Coinbase and Kraken are now beginning to pay significant attention to the Chinese market. They are realizing the potential of the Chinese market. Although the Chinese market is already a red sea, making it might not be easy to surpass local platforms in product and user experience; however, combining recent trends from Chinese region funds and capital movements, they too want a piece of the action.

Ultimately, you see that Chinese users have high trading frequencies and strong capital activity. Moreover, these overseas exchanges hold some advantages in areas not available to offshore platforms, like stock tokenization.

Albert: A secondary perspective on the Consensus Conference — Trading team contraction, traditional institutions taking over, with concerns about liquidity crises

Albert: I will speak from the perspective of the secondary market since everyone else basically talks from the primary market angle. I personally work in funds in Singapore, so I’ll share a few insights from the perspective of capital and trading teams.

First, attending this Consensus Conference revealed an interesting phenomenon: From the perspective of trading and funds, the overall state this time was significantly worse than the previous conference. The scale of the last conference was at least more than double that of this event. When I went to the main venue this time, my first feeling was: Why is there only one floor left? I specifically checked the exhibition list and found almost no newcomers.

The现场是谁的地方”与合规通道的变化，市场对新交易团队已失去吸引力或已成熟到新人无兴趣再进来。

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