Investing in the Future Saison Capital’s Qin En Looi Talks Web3, Blockchain, and Fintech Innovation

Summary

This interview explores the transformative potential of blockchain technology, particularly in financial services and real estate. The speaker discusses how blockchain can eliminate intermediaries, enhance security, and foster transparency. They delve into real estate tokenization, highlighting its benefits in markets like Indonesia and Brazil, while stressing the importance of trusted institutions for legitimacy. The speaker also shares insights from their extensive experience in Web3 investments, focusing on the long-term potential of blockchain. With a forward-looking approach, they emphasize the significant opportunities in emerging markets, particularly Latin America, where blockchain adoption is accelerating.

Takeaways

• 😀 Blockchain eliminates financial intermediaries, improving transparency, security, and efficiency in financial systems.
• 😀 Tokenization of real estate allows for fractional ownership, opening up international investment opportunities, particularly in markets like Indonesia.
• 😀 Real Estate Investment Trusts (REITs) are available but rely on established infrastructure, which may not be present in emerging markets.
• 😀 Blockchain can address issues in international real estate by offering more secure and transparent transactions.
• 😀 Tokenization of real estate, like in Indonesia, benefits from the involvement of trusted institutions, such as large banks, to ensure credibility.
• 😀 Blockchain technology in real estate faces challenges with proving property authenticity without institutional verification, which reduces the risk of fraud.
• 😀 Tokenization is still in its early stages, especially in private real estate markets like single-family homes, and requires institutional involvement for security.
• 😀 The speaker’s venture fund has invested in over 50 Web 3 projects, focusing on companies that are actively building blockchain solutions, especially post-FTX crash.
• 😀 Investment in Web 3 is more resilient when markets are down, as it separates long-term builders from opportunistic 'tourists' who leave during downturns.
• 😀 Brazil is emerging as a key market for blockchain adoption due to proactive support from its central bank, which is creating its own blockchain infrastructure.
• 😀 The central bank of Brazil is supporting 16 blockchain consortiums, with a focus on creating an EVM-compatible blockchain that could accelerate tokenization in the region.

Q & A

How does blockchain technology help improve the financial system?

Blockchain removes middlemen in financial transactions, increasing transparency and security. It also allows for more direct interactions between parties, reducing complexity and the potential for errors or fraud.

What is the significance of tokenization in the real estate industry?

Tokenization allows real estate assets to be represented digitally on the blockchain, enabling easier access for international investors and increasing transparency. It offers a way to break down traditional barriers in markets that are hard to access, such as the Indonesian real estate market.

Why does the speaker mention the role of trusted institutions in real estate tokenization?

Tokenization in real estate requires trusted institutions to verify the legitimacy of assets. While blockchain ensures security and immutability, it cannot inherently verify that an asset exists or is accurately represented, making institutional involvement essential to ensure trust.

What is the main challenge when tokenizing real estate in regions like Indonesia?

The primary challenge is the difficulty of non-local investors accessing and understanding the local real estate market. Issues such as fraud, unclear processes, and lack of transparency discourage foreign investment, which tokenization aims to address.

What is the role of the largest mortgage-issuing bank in Indonesia in the tokenization project mentioned?

The largest mortgage-issuing bank in Indonesia is helping to tokenize high-quality real estate assets. Their involvement provides credibility and trust to the tokenization process, offering foreign investors confidence in the market.

How does the speaker view the future of blockchain technology in private real estate markets?

The speaker believes that while blockchain will play a role in private real estate markets like single-family homes in the future, it may take several years to develop the infrastructure and trust needed for such applications.

What risks still exist in blockchain-based real estate transactions?

While blockchain ensures the security of transactions, there is still the risk of fraud because the information off-chain (like property ownership) may not be adequately verified. This gap could lead to issues if proper third-party validation is not in place.

How does the speaker differentiate between tourists and true Web3 investors?

Tourists are those who invest in Web3 during market booms but disappear during downturns. True Web3 investors, on the other hand, remain committed even in challenging times, investing in companies with long-term potential.

What is the significance of Brazil in the speaker's current investment focus?

Brazil is emerging as a key market for blockchain adoption due to the central bank's progressive approach in developing an EVM-compatible blockchain. The country is also seeing high crypto adoption and growth, making it an attractive area for Web3 investment.

What makes Brazil different from other countries in terms of blockchain adoption?

Brazil's central bank is not just welcoming blockchain innovation, but is actively building the infrastructure for it, including creating consortiums involving both large banks and early-stage startups. This proactive approach sets Brazil apart from other countries that often only show support in principle without substantial follow-through.