1/All sectors of domestic narratives have seen a significant improvement recently. The narratives and valuation ceilings are nothing more than the currency layer and the ecological layer, which correspond to payment and public chains respectively. Recently, even the domestic public chain of Binance, a small-cap stock, has been hyped due to the "scarcity of shell resources." How does #CFX, as a leading compliant public chain, form differentiated competition with alliance chains?

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⇒ Project Introduction

2/Conflux, which claims to be the only compliant, legal, and government-funded public chain project in China, currently adopts a PoW/PoS hybrid verification mechanism. The two core points of the entire chain are ①DAG block structure, which can be simply understood as parallel processing to increase efficiency and reduce costs;

② Gas fee payment mechanism. The project party can pay the transfer and mint fees on behalf of users to achieve the so-called "coinless" blockchain. Although the country does not prohibit the use of public chains by digital treasures, it is necessary to ensure that users will not be exposed to related tokens. This ensures that digital treasure players built on the CFX chain can obtain NFT-like user experience without violating national laws and regulations.

⇒ Narrative direction: Multiple halos on the head

3/The light of domestic public chains has received some substantial support from the Shanghai Municipal Government. As early as 2019, Wu Qing, member of the Standing Committee of the Shanghai Municipal Party Committee and Deputy Mayor, attended the Shanghai Municipal Government’s “Conflux Blockchain Research Institute” in Shanghai.

The team's chief scientist was founded by a Turing Award winner, a member of Tsinghua University's Yao Class, and a member of the Academician Yao Qizhi, who has provided certain support for existing underlying technical issues.

4/ A special public chain suitable for China's national conditions. The top three issuance chains that Shuzang prefers to cooperate with are Ant Chain, Zhixin Chain and TreeGraph Chain, accounting for 43%, 29% and 14% respectively. At present, more than 70 Web3-related ecological platforms use Conflux's services, and more than 260 brands/IPs of Shuzang are issued on Conflux. Therefore, if Shuzang can prosper again in the future, Coflux will also benefit to varying degrees.

⇒ Current dilemma

5/CFX is currently a chain, but there are two trading pools, that is, the compliance business for Shuzang and Metaverse is isolated in separate trading pools, but in the end the data of the two pools can be verified and uploaded to the chain, that is, the compliance and public chain businesses are separated; Shuzang’s income, such as the cooperation fees with the Shuzang project party, but the off-chain income is compliant, so how to bring this part of the income to the chain may be a problem, and it is difficult to feed back to the chain under regulatory supervision.

⇒ Future development

6/ The battle between compliant public chains and alliance chains: Although domestic policies do not prohibit the use of public chains, they are still not encouraged and alliance chains should be used as much as possible. However, in the battle between public chains and alliance chains, the closure of Tencent's digital collection platform Huanhe means that the alliance chain leader Zhixinlian has also been abandoned by capital.

7/The alliance chain led by Internet manufacturers is not for "decentralization and trustlessness" services. It is more about bundled sales around its core web2 business. The involvement of blockchain will inevitably be subject to regulatory shocks and even face the risk of revocation of relevant game versions and xx licenses. Therefore, in the future, China's metaverse and digital treasures should be carried by public chains.

8/A year ago, it was reported that Conflux would pilot offshore RMB stablecoins in the Shanghai Free Trade Zone for cross-border payments. However, whether it can be circulated as a stablecoin in the crypto world is not realistic. Its usage scenario is "offshore RMB". If it is not offshore, it may be defined as a violation. Moreover, the volume of offshore RMB does not support the current market value of $120 million+ of cryptocurrencies.

⇒ Team members

9/Conflux brings together the most luxurious configurations in the domestic computer field and has very strong technical capabilities. Among today's blockchain projects, perhaps only Polkadot and Ethereum can compare with it.

At the end of 2018, the team continued to raise funds for half a year, negotiated with nearly 200-300 VCs, and obtained $35 million in financing from well-known institutions including Sequoia Capital China, Frees Capital, Baidu Ventures, IMO Ventures, etc.