Gerrit van Sittert | September 14 2022
Gerrit van Sittert | September 14 2022
The Future of Digital Assets with Orion - Part 1
What is the outlook for digital assets going to look like? To answer this question, it helps to have an idea of the direction society and the financial industry is heading toward on a global scale. In the first of this two-part article, we will explore the views expressed by the World Business Council for Sustainable Development (WBCSD) to guide us on our approximations of the future.
With the Sustainable Development Goals (SDGs) of the United Nations General Assembly outlining their horizons, the WBCSD paints a picture of the current macro trends shaping global society and financial institutions. Their outlook is admittedly bleak, which contextualizes the challenges we face while utilizing emerging innovative technologies in crypto and digital currencies. Financial market infrastructures may indeed approach notable changes through cryptocurrencies, with institutional demand now looking for diversified portfolios within a new regulatory framework of the future through digital assets. Client demand may also play a part.
This article introduces to our discussion how digital assets on the blockchain are being used to build sustainable processes for the modern economy and redefine the stereotypical asset class. It also highlights why the Orion Protocol initiative is so important - to provide advanced tools on a platform that unifies the crypto space for market participants so that the industry may rise to address the world’s broad range of most pressing issues.
The second part of this article, to be posted later, borrows insights from the ARK Invest research team to highlight five exciting platforms supporting 14 rapidly emerging, transformational technologies converging together to disrupt how we live our daily lives. Among their points is a breakdown of the current impact of blockchain technology, which plays a major role in our future, according to ARK Invest.
We will also learn from influential thought-leaders and other well-known individuals of capital markets, institutional investors like Warren Buffet and Elon Musk, to echo the importance of the current trends shaping tomorrow. With asset tokenization becoming increasingly popular across formerly traditional assets while regulatory compliance also grows across various areas, many financial institutions now look to digital assets as being part and parcel of financial markets.
Our investigation reveals a recurrent theme; digital assets on the blockchain are being woven into, and often interconnect, each of the mentioned emerging trends in society - across financial services and the general investment landscape. In the context of the looming threat of climate change, shifting demographics, rapid technological innovation, transitioning economies, and a typically negative outlook on the political landscape, assets on the blockchain seem to be increasingly relevant.
Wealth management and asset management financial institutions may look for alternate solutions moving forward as risk management is reviewed accordingly. Digital assets continue to increase in popularity across society across both retail investors and market participants, looking beyond traditional assets. The growth of exchanges and social media coverage is a testament to this throughout different business types.
We suggest that crypto assets on the blockchain are becoming the digital asset class infrastructure for the converging and disruptive technologies shaping the modern economy. NFTs (Non-Fungible Tokens) also play an important part along with DeFi protocols. This aligns accurately with Orion’s mission, as Orion Protocol bridges the gaps that plague the fragmented infrastructure of the crypto space, at least for the foreseeable future, while Orion Protocol grows to widespread adoption among users - creating a one-stop shop for digital assets in one place.
World Business Council for Sustainable Development (WBCSD)
In their “Vision 2050” issue brief, the Switzerland-based WBCSD outlines macro trends and disruptions shaping the years from 2020 to 2030.
What is the WBCSD?
The WBCSD “is a CEO-led organization of over 200 international companies”. As an organization, their mission is to accelerate the transition to a sustainable world as guided by the Sustainable Development Goals (SDGs) outlined by the United Nations General Assembly in 2015.
The opinions of the WBCSD mirror the global Environmental Social Governance (ESG) institutional narrative governing the regulations that dictate how public companies allocate their investments in capital markets. The gross value of the institutional market means that their investments inevitably influence the direction of global affairs. Real assets, real impact.
Six macro trends shaping the 2020s
According to the WBCSD, the following six macro trends are shaping the current decade:
Demographics: the generational handover from baby boomers to millennials and gen Z, and population growth in Asia and Africa
Environment: a worsening climate pushing innovation
Economy: the global economic shift of power to Asia, particularly China
Technology: automation and the pros and cons of datafication
Politics: increasing polarization and radicalism
Culture: post-materialism and “culture wars”
Summary of macro trends
In summary, the WBCSD’s macro trends paint an industry landscape of shifting powers and liberalizing attitudes while the general populace and geopolitical landscape become increasingly polarized and consumed by technology in the face of a world climate crisis.
Shifting economies, demographics, and the environment
While their brief does not mention blockchain technology among the financial information, digital assets are undoubtedly relevant. Younger generations and retail investors of the new world are adept at adopting new technologies and are likely to apply them as they increase their economic influence and growth. This is especially true for the growing populations of youth in the emerging economies of Africa and Asia, which are seeing data for the highest rates of Bitcoin and crypto adoption as an underlying asset.
Adapting to change
The stress of climate change means people need to innovate and adapt to adverse conditions. One example is the likelihood that people will migrate to more liveable regions. For instance, the majority of cities are situated very near to the ocean, which is vulnerable to rising sea levels and the increasing frequency of storms around the world.
Digital assets like Bitcoin often serve as lifelines for those needing to preserve their wealth while they lose everything else they have. This is standard practice for individuals fleeing their home countries, like Ukraine, or those who face crippling inflation and services, like Venezuela and Turkey.
Technology, Culture, and Politics
The exponential trajectory of technology is outpacing any individual’s ability to comprehend it. The result is limitless pros and inevitable cons. The world is becoming increasingly automated, which fits nicely with features of modern digital assets like smart contracts and the immutability of the blockchain. However, automation also implies that people will lose their jobs to machines. We are bound to see conflict as people face new challenges and, as stated in the brief, shift their values away from individualism toward collectivism.
The WBCSD notes that we will likely see increased radicalization and geopolitical instability. To get their way, governing bodies will use any tool at their disposal, including blockchain technology.
The fiat currencies of today are becoming the blockchain digital assets they manage (and control) tomorrow. Like any new technology, the possibilities they unlock can also be abused. Today, we are seeing incredible decentralizing innovation in crypto (and trading in markets), but the reality is that the same technology is already being used for concentrated centralization.
These government-issued, centralizing digital assets from central banks are known as Central Bank Digital Currencies (CBDCs), and they are not to be ignored. Most notably, China has been advancing its CBDC rapidly, amplifying its capacity for surveillance and control of the general public.
Orion and the future of crypto
As noted earlier, digital assets seem to be growing in relevance by the day throughout asset classes and investments. For better (Bitcoin and crypto transactions) or worse (CBDCs) they are being woven into our daily lives.
Therefore, accessing the blockchain efficiently is of increasing importance. Today, however, this is not a straightforward task due to the lack of inter-chain operability and that almost no exchange offers access to the whole crypto market.
Unique coins and tokens are spread across hundreds of exchanges, which are subject to different regulations or suffer from insufficient decentralized access to liquidity. Even for the most passionate crypto enthusiast of the trading markets, this can be a confusing, risky, expensive, and time-inefficient affair.
Orion Protocol is a rare exception. Orion has been designed from the beginning with a focus on digital asset aggregation in mind within the market. Orion tools, like the Orion Swap Widget, Orion Terminal, and Orion Bridge, operate on Orion’s growing amalgamation of decentralized access to nearly every coin, token, and all of the various crypto assets on the market. They exist on a platform designed to encompass a unified crypto market that can operate at scale.
For users seeking a single platform for the digital assets of the future, Orion provides unmatched service for institutional investors, capital markets, retail investors, and all looking for a way to trade finance in a modern way. Decentralized finance (DeFi) through Orion provides.