More than once, I heard "outside voices" calling Russian blockchain projects "hardcore". Whenever this happens, the figure and accent of the former Soviet scientist in the old movie will appear in my mind.
Buffett recalled in the HBO documentary "Becoming Warren Buffett" that when he first graduated, he would read the pages of "Moody's manuals" (Moody's manuals), looking for undervalued stocks. Finding "value depressions" appears to be the winning formula for top institutions. Then, how to discover the market and judge the value becomes particularly important.
How is blockchain technology developing in Russia, and is its value underestimated? How big is the market? How is the policy and talent environment? What core elements does the project party focus on? Why is the industry not speaking out much?
Curious about these issues, Odaily contacted GENESIS, a blockchain investment company that is deploying overseas, and Russian local investment institutionsBlock Rock Capital, Russian blockchain development platformCredits、The Powerand blockchain solution providerSUMUSsecondary title
An overview of the Russian venture capital sector
It is understood that the Russian venture capital market is relatively small, similar to that of Germany and France.
In 2017, Russian venture capital institutions invested a total of US$120 million, with an average of US$800,000 per project, a decrease of 27% compared to 2016. Among them, government funds account for the majority of shares. According toProudo Yonghua and CB Insights reportIn the same year, the amount of venture capital investment in the United States exceeded 70 billion US dollars.
On the other hand, it is difficult for Russian startups to attract VCs. One is that there is a lack of criteria for judging innovative companies in the market, and the regulatory requirements for start-up companies are still immature; the other is that many start-up companies do not design products based on user needs, and lack thinking about the nature of business.
Throughout the field of Russian venture capital, more attention is focused on financial B2B service platforms and SaaS; key investment areas include IT, biotechnology, and manufacturing; "recognized" innovation trends include blockchain, AI, and AR.
The more established IT giants are Yandex, Mail.ru Group and Avito (valued at $11.2 billion, $6.9 billion and $2.7 billion, respectively). Its main business gives the impression that it is similar to the Russian version of "Sina + Baidu", Tencent, and "Taobao + Dianping".
Leading startups include Telegram (IM), IVI.ru (video site), TradingView (social network in trading verticals), Litres (online bookstore), Coub.ru (short video), Ecwind.ru (online shopping) and Ligualleo ( education), etc.
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Blockchain enters Russia, and the regulatory attitude changes drastically
As early as 2014, cryptocurrencies were "little famous" in the Russian market, but there is still a lack of Russian voice in the global blockchain technology community.
The Russian central bank has issued risk warnings on bitcoin transactions and banned bitcoin-related activities. Block Rock Capital, a blockchain investment institution, and V God, the founder of Ethereum, established an Ethereum skill center in Russia, inviting politicians, businessmen, shareholders, etc. to participate in meetings and forums, and gradually promoting the Russian market's awareness of blockchain. Since then, the Central Bank of Russia and other departments have jointly developed the Masterchain Ethereum payment network. For the first time, the blockchain has received official support. In June 2017, President Vladimir Putin met with V God to discuss the application of blockchain technology in Russia, and the regulatory policy was released accordingly.
A picture to understand the global digital currency regulatory attitudeA picture to understand the global digital currency regulatory attitudeIt was concluded in "Russian digital currency exchanges are subject to license management, and the Russian Federal Financial Monitoring Service (FFMS) stipulates that cryptocurrency transactions must comply with the anti-money laundering and anti-terrorism financing provisions in Russian Federation laws, otherwise the business will be revoked." license.
In May of this year, a subsidiary of the Russian state-owned bank Sberbank cooperated with the Russian National Depository (NRD) to carry out ICOs using the framework of the Russian Central Bank's "Regulatory Sandbox" (Regulatory Sandbox). In September, Ivan Semagin, deputy director of Russia’s Ministry of Financial Market Development, said,The Central Bank of Russia has successfully completed an experimental ICO within the framework of its test platform (sandbox). In October, according to the new draft of the "Digital Financial Assets Act",secondary title。
Russian Blockchain Ecological "Map"
According to Block Rock Capital, the number of blockchain projects in Russia is roughly around 200. Well-known companies and projects in the community include BitFury (mining group), TON (operating system), Credits (development platform), POA (Russian team's project in the United States), Waves (development platform), Cindicator (prediction and Asset management), INS (retail), BankEx (financial technology), DAO Casino (guessing), SONM (fog computing), Storiqa (enterprise services), DMarket (games), Playkey (games), MyWish (smart contract platform), LaToken (coin reform), etc.
From the perspective of traffic entry, Russian local exchanges include Exmo, Livecoin, Bitflip, etc., but investors tend to choose highly liquid overseas exchanges such as Binance, Bittrex, and Bitfinex. Vertical media in the field of digital currency and blockchain include forklog, bits.media, bitnovosti, coinspot.io, etc.
In terms of personnel training, universities such as Moscow State University, Russia's Higher School of Economics, St. Petersburg State University of Economics, Moscow Institute of Physics and Technology, and National University of Science and Technology have all offered courses related to blockchain technology.
Developers have no obvious preference for participating in public chains or application construction, and will comprehensively consider the project's goals, structure, popularity, and work returns, office locations and other factors.
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Three Cases of "Technology Flow"
CreditsPositioned as a high-speed, scalable, blockchain development platform that supports project party tokens, it focuses on financial and Internet of Things applications.
Credits chooses the Java language to create smart contracts, provides developers with an SDK, and usesApache Thrift(Facebook's open source cross-language RPC communication framework) further lowers the development threshold. Currently, the DAPP based on the Credits platform has an identity security management systemSocial Identity Platform。
The highlight of Credits is that it does not draw on public chains such as Ethereum, designs codes from scratch, and combines DPOS and BFT to establish its own consensus mechanism, interaction mechanism and data confirmation mechanism, and has applied for a patent. Credits also achieves the processing of 1 million transactions per second, the fastest confirmation speed of 10 milliseconds, and the lowest transaction fee of $0.001 by reducing the size of the data packet and optimizing the entry and storage mechanism of the transaction pool.
Its team is more than 70 people, based in Moscow and London, 45 of them are developers.
Blockchain Development PlatformThe PowerA layered system architecture is adopted: the management layer is responsible for the address registration of nodes, the verification layer uses the MTP (Merkle Tree Proof) algorithm to verify cross-shard transactions, and the shard layer is responsible for transactions and smart contracts.
At the same time, The Power supports transaction sharding, relying on the synchronization protocol "Resonance" (similar to BFT consensus) to ensure intra-chip security and point-to-point timely exchange of information. Currently, the system contains 20,000 nodes, and each shard has 100-150 nodes. Considering security and stability, at least 30 nodes are required in each shard. The team said that The Power can customize an independent economic system in a single shard according to actual business needs, and is currently focusing on solving the problem of transaction fee losses caused by weak connections between shards.
In a testnet environment with 210 nodes supported by Microsoft Azure, The Power's TPS exceeded 100,000. The peer-to-peer transaction fee rate is fixed at $0.01.
In terms of attracting developers, The Power presents a visual user interface directly on the server; in order to enhance privacy protection, The Power also provides a KYC proxy server. In addition, The Power has established a Power hub (which can be understood as an ecological social center) in order to meet the business needs of developers and partners.
The team currently has about 20 people, and plans to expand a commercialization team to achieve faster scale.
Regarding the application scenarios of the blockchain, The Power is optimistic about the Internet of Things, mobile payment, P2P lending, sharing economy and other fields, and will release the first DAPP on the testnet this month (the details have not yet been disclosed).
Blockchain solution service providerSUMUS, based on more than 20 years of project and system development experience and self-developed technology, it has achieved 10,000 TPS. The core team currently has 35 mathematics/cryptography experts and more than 150 developers.
Different from the previous two entrepreneurial projects, SUMUS has accumulated a certain amount of business and incubation experience. After choosing the business route to open source code and API, it develops partners and representative nodes in various countries, and provides centralized and decentralized solutions at the same time.
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Prediction of the "post-bear market era"
Like domestic projects financed through ETH, many Russian investors have suffered heavy losses this year. Individual investors are also gradually becoming more liquid "secondary markets".
Unfortunately, most individual investors in the community do not care about technology, but are attracted by various airdrops and operational activities. Fortunately, institutional investors still stick to the standards and look for projects with "hard" technologies, business models, and teams with a long-term vision.
As an optimist of blockchain technology, Block Rock Capital is optimistic about the future decentralized Internet and economy. Although Block Rock Capital is not sure about the path to the future, it believes that projects with a clear business model that are deeply integrated with business and user needs are more likely to "run out".
Block Rock Capital’s current fund size is US$100 million. It has only sold two projects, TON and Agregion locally. It is currently watching an English-language media and a data marketing project built by a Russian team. It will also pay attention to exchanges and technology-driven projects in the near future. Small start-ups, blockchain projects combined with traditional fields and STO, and continue to incubate business.
The project party, The Power, believes that the Russian blockchain market is full of speculators, and some teams don’t even have any business and technical background, relying entirely on marketing. However, two positive trends are that projects with strong technical strength have survived the bear market; at the same time, the attention of large companies and "industrial players" has begun to turn to the blockchain.
In these respects, Russia is like the rest of the world.
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Odaily's illustration | A picture to understand the regulatory attitude of global digital currency
I am Hao Fangzhou, senior editor of Odaily. I am looking for reports on high-quality blockchain projects. You can add nooxika. Please note the company + name + reason.
