At this year’s Token2049 event, DigiFT’s Founder & CEO, Henry Zhang, left an indelible mark with his keynote, “Real-World Assets Meet DEX: Exploring The Future Of DeFi.” His keynote caught the attention of industry titans and prominent media outlets, which highlighted DigiFT’s role in reshaping the landscape of decentralized finance.

DigiFT: Where TradFi Meets DeFi

DigiFT is not just another player in the DeFi space; we are a regulatory-compliant Real-World Asset (RWA) Decentralized Exchange (DEX) that boldly stands at the intersection of traditional finance (TradFi) and decentralized finance (DeFi). Our journey begins with the tokenization of real-world assets, a significant step toward revolutionizing capital markets as we know them.

In his keynote, Henry Zhang emphasized DigiFT’s core principles:

DigiFT is Revolutionizing Finance: We are a Regulatory-Compliant RWA DEX, merging the best of TradFi and DeFi. Our platform provides transparency, liquidity, and investor protection, addressing the challenges of both worlds.

DigiFT’s Innovative Approach: By bridging these two domains, we reduce intermediary costs, and drive innovation, positioning ourselves at the forefront of DeFi and TradFi convergence.

DigiFT’s innovative approach to digital assets is not just theoretical; it’s practical, actionable, and transformative. We are actively shaping the next generation of capital markets.

Watch Henry Zhang’s Inspiring Speech

If you missed Henry Zhang’s speech at Token2049, don’t worry. You can watch the full stream here:

The Full Transcript of Henry’s Speech:

Good morning. Welcome to the presentation about Real-world Assets meeting Decentralized Exchange. Basically, it is a combination of centralization, decentralization, traditional finance, and decentralized finance. It might sound confusing, but I hope to explain that in the next 10 minutes. Before I proceed to a couple of slides, please watch a very short 45-second video about DigiFT.

Let me dive a bit deeper into the message we’re conveying in the video.

As you can see from this team’s background, we call it ‘deep Fin’ plus ‘deep Tech.’ We’ve brought together a group of highly skilled individuals from traditional finance, Web2, and also Web3. This is how we’ve organized the team.

So, who are we, and what is DigiFT? DigiFT is a regulatory-compliant RWA DEX. Essentially, we focus on three key aspects of positioning. Number one, we tokenize real-world assets. But it goes beyond that; we tokenize not only real assets but also crypto-native assets with security features. We refer to this as the tokenization of security tokens. Number two, as a DEX, an exchange, and a marketplace, we mainly use DeFi technology because we are strong believers in decentralized finance, which means we use Blockchain as a tool. We use decentralized finance as a tool, not just as an asset, because decentralized finance, based on the blockchain, offers unprecedented value. Number three, and most importantly, we are licensed and regulatory-compliant. DigiFT is a regulatory-compliant DEX for security tokens, and we have combined all these elements. We are a Singaporean company, which is why we have obtained a license in Singapore. As shown here, we hold two licenses. These two licenses allow us to do two things: tokenize the tokens and trade the tokens. We are proud to be the first and, so far, the only one approved by the authorities in Singapore as a regulatory-compliant DEX.

What problem are we solving? What pain points are we addressing? We are bridging TradFi and DeFi. We see many advantages in both TradFi and DeFi, but there are also disadvantages or issues in both of them. Take TradFi, for example; it heavily relies on central parties. If the central party makes a mistake, the market faces problems. Additionally, there is a lack of transparency because of the reliance on central parties and the numerous intermediaries involved. Dealing with many intermediaries actually results in longer processing times, higher costs, and a higher probability of making mistakes. Moreover, since TradFi dominates, many TradFi institutions lack incentives to innovate.

On the other hand, there are many positive aspects of DeFi, but DeFi also has some disadvantages. I’ll list a few. DeFi is highly unregulated. Some people say DeFi is good as long as it doesn’t encounter problems. If anything goes wrong technically or in terms of governance, it’s in deep trouble. Number two, limited liquidity. There are very few popular assets on DeFi, like BTC and ETH. Asset volatility is another issue. While some volatility is good, DeFi assets are often too volatile. Furthermore, there is a high correlation between DeFi assets, which accelerates unnecessary volatility. Lastly, there is limited investor protection due to the lack of regulation. If anything goes wrong, there’s no one to turn to. Investor protection is essential, and there are issues to address. We are working on providing solutions to address these problems.

Many people have heard about marketplaces, and DigiFT is one of the marketplaces in the market. How does DigiFT compare to other marketplaces, often referred to as exchanges? Please take a look at this chart. Vertically, we have regulated on the top and non-regulated at the bottom. Horizontally, we have interoperability, essentially the adoption of DeFi technologies. On the left-hand side, it’s more centralized, and on the right-hand side, it tends to be more decentralized. You can see familiar names like NASDAQ, for example, on the top left. NASDAQ is a traditional marketplace, well-regulated and mature, but also very centralized. On the opposite end, you can see Uniswap on the bottom right. Uniswap is a brilliant invention in the market, very decentralized with high interoperability. However, it’s unregulated and cannot deal with security tokens, etc.

DigiFT’s approach falls into the top right quadrant, which means we love DeFi technology on the technological side. We aim to achieve interoperability, composability, and immutability, leveraging the benefits of DeFi. Simultaneously, we seek to be regulated and work closely with regulators, embracing regulations. By combining governance and technology, we occupy a unique space in the industry. Not many players are operating in this area yet, and that’s what we call the industry whitespace. Why is that? Perhaps people haven’t fully realized the value of combining technology with governance, and regulation tends to lag behind innovation. Regulators are starting to discuss it, but there isn’t much practical application in the market yet. In this regard, Singapore is quite advanced, which is why we chose to come to Singapore and obtain a license. Singapore is a tier-one financial market worldwide.

We’ve talked about what DigiFT is and the market. Next, let’s discuss the convergence of DeFi and TradFi. We don’t see them as mutually exclusive. We observe a trend of convergence from both sides. On one side, DeFi is recognizing the value of TradFi. For example, MakerDAO is allocating more and more of its reserves into traditional financial assets, like US Treasuries. Why? It’s secure and generates interest. About 80% of MakerDAO’s revenue comes from TradFi investments. This is DeFi moving towards TradFi.

On the other hand, we see the trend from TradFi to DeFi. For example, Hong Kong issued a green bond on the blockchain directly. This is a typical case of TradFi moving towards DeFi. We believe this convergence is the future, and this is where DigiFT is focusing. We’re not just talking; since we are licensed in Singapore and have been in the sandbox for a year, we’ve had the chance to launch real products in the market. We’ve already launched a couple of products, as shown here in this snapshot.

From the left, you can see the first product is a DCS token, representing Diners Club, essentially a private corporate bond directly issued on the blockchain with an automated market maker (AMM). The second product is called PBRT, a perpetual bond reference token. We’ve tokenized Barclays bonds, including a coco bond, a high-yield bond with a 9% interest rate. Last month, the yield was even higher, attracting investors seeking higher returns. What’s interesting is that, as we bridge TradFi and DeFi, investors can use not only US dollars but also USDC to invest directly in these real-world assets from their wallets. In other words, you can invest your Web3 money, stablecoins, into real-world assets without involving a bank. That’s what we offer.

The third product is called DUST, where ‘D’ stands for DigiFT, and ‘UST’ stands for US Treasury token. So, this is a US Treasury token. Many are doing it, but the one we’ve launched into the market is highly regulatory compliant. The real assets are very secure, bankruptcy remote, and even if DigiFT ceases operations, your assets will remain within the regulatory custodian. On the other side, we’re using DeFi. Again, you can use USDC from your wallet, like Metamask or Coinbase wallet, to directly invest in US Treasury without intermediation. You can complete this process in just a couple of seconds. However, KYC is required because it’s regulated. And finally, I want to mention something very interesting: dETH, which we launched this week, is DigiFT ETH. This is an Ethereum staking product. Now you can use USDC or US dollars to invest directly in Ethereum staking. So, this is Web2 money into Web3 assets. We are enabling the convergence of Web2 and Web3.

The last page I want to show is what we envision, what’s our dream? Our vision is aligned with what DigiFT and many other partners with similar values are doing. We are looking at the next generation of capital markets. Ownership is transitioning from paper-based to the current electronic-based, and it’s not stopping there—it’s moving towards a token-based system. The marketplace is also evolving. Currently, it’s more centered around electronic bases, but eventually, it will shift towards token-based platforms. This doesn’t mean that traditional markets like NASDAQ will disappear immediately. No, in the long term, both will coexist in the market. However, token-based platforms will play an increasingly important role down the road. Tokenization of real-world assets is a significant part of this digital transformation. But on the other side, I want to emphasize that we can further tokenize liquid staking or native crypto tokens in a legally-compliant way. Tokens with security features, such as SEC-compliant tokens, can also be traded on security token platforms that are regulated and compliant, like DigiFT. That’s why we use a big circle to symbolize embracing all these types of native assets and real-world assets. This is what DigiFT aims to achieve. Thank you very much for listening to the presentation.

At DigiFT, we’re committed to driving meaningful change in the financial industry. Stay tuned for more updates on our journey to build the intersection of Real-World Assets and Decentralized Finance. Together, we are shaping the future.