A new economic and technological infrastructure is on the horizon as the next generation World Wide Web becomes a reality. In this new generation, known as Web3, concepts such as decentralization, digital currencies, token-based economics, and non-fungible tokens (NFTs) have permeated the mainstream economy. Because new technology brings terminology and tools unknown to even the most academically qualified individuals, this new arena of commerce has created a level playing field for businesses of all sizes to take advantage of.
Experts across the current Web3 and beyond economic infrastructure shared their views CFO About exactly how finance executives can use the latest and trendiest phenomena in the economy to improve their businesses.
Recognize the potential of decentralized finance (DeFi)
Lars Thayer ChristensenCo-Founder of Saxo Bank and Founder of Seier Capital CFO About how to do finance without intermediaries. Christensen believes that an objective ledger powered by blockchain technology could provide unprecedented, instant and secure transactions.
“[In DeFi]The data is completely protected and cannot be manipulated or rolled back,” said Christensen. “In the future, a lot of infrastructure will be built on blockchain. I highly recommend staying up to date with the rapidly developing industry. As such, the acceptance of cryptocurrencies as a means of payment and transaction could open up significant new business opportunities.”
Removing middlemen from financial transactions eliminates the fees and latency of large capital transfers. Blockchain technology could disrupt the way banking transactions are completed, as moving large sums of money from one account to another takes time and fees for both the sender and receiver in the current financial infrastructure. There is a nature. By removing Venmo, Visa, Mastercard, PayPal, etc. from transactions, Web3 can make moving money easier and cheaper.
NFTs aren’t just pictures, they’re tools with utility
NFTs offer utility to companies dealing with large amounts of secure data tracking and distribution. Both NFTs and non-transferable tokens (NTTs) allow you to monitor the location and use of your data. “NFTs can be enriched with a set of data that can be tracked across companies, their suppliers and clients,” says Christensen, increasing financial transparency and improving logistics processes.
NTT (one-way NFT) can act as a virtual identity card or credential document for organizations concerned with granting individuals access to valuable information. Through NTT, these types of credentials can be granted, tracked, and removed instantly. “NTT is inherently associated with an individual and could be an efficient way to associate specific information with an employee or line of business, such as credential registration, access control, or individual performance,” says Christensen. says Mr.
Other executives believe that NFTs have the potential to win regular customer business and hold real value for organizations investing in repeat business.
“There are many ways NFTs can help, but the most prominent one is rewarding employees and customers.” Christos Macridis, Chief Technology Officer, COO, and co-founder of Living Opera, a Web3-based tech startup. Macridis, who is a professor of Web3-related topics at both the Columbia Business School and the University of Nicosia, has broad thoughts about the potential of blockchain to disrupt corporate finances.
In evaluating the use of NFTs, and blockchain technology as a whole, the Web3 professor will direct executives to evaluate how these types of tools can help within their companies. He says he has to ask one question.
Makridis explained that the value of these types of tokens, not only their use cases, but their ability to talk about their value is essential for executives looking to offer Web3-triggered bonuses. Developing a method of compensating and rewarding employees using internal tokens is certainly one use case, but managers should ask why it is worth more than other non-wage benefits or just higher wages. should be explained.
For business-to-consumer (B2C) companies, especially those that rely on repeat business, Makridis sees NFTs as a potential way to strengthen brand loyalty in their customer base. “Organizations, especially consumer-facing ones, can also think about how they can use NFTs to reward their customers and learn more about them,” he said. “Organizations can purchase market-rated NFTs and use them as gifts and tokens of appreciation.”
NFTs were created to give their owners specific benefits.For example, social media genius Gary Vaynerchuk’s NFT line It offers membership benefits such as access to certain restaurants, and you can even meet him. game industry Leveraging NFT and blockchain technology, we offer tokens as playable characters that can be traded between gamers.
Modernization of accounting principles, especially in fraud detection
As large amounts of data are transferred, reviewed and transmitted in accounting tasks, the idea of decentralized information transfer through objective ledgers offers the potential to transform the way numbers are described and tracked.
“Because data and accounting entries are time-ordered and immutable, with a clear indication of the source of the entries, a blockchain ledger implemented across the enterprise is extremely useful in both account management, auditing, and fraud prevention. When asked about the potential of blockchain in accounting and bookkeeping, Christensen said:
Permissioned blockchains are very useful for internal accounting and creating trustworthy audit trails. — Christos Macridis, CTO, COO, Co-founder of Living Opera
Macridis agrees with Christensen, especially regarding the possibility of detecting fraud. “Permissioned blockchains are very useful for developing internal accounting and trustworthy audit trails,” said Makridis. Value of Activity Since her chain is recorded, permissioned blockchain applications can not only detect fraud more easily, but also thwart it more frequently.
ENS domain is Web3 dotcom
The Ethereum Naming Service, better known as ENS, is a naming system that allows users conducting transactions on the Ethereum blockchain to give their digital wallets or Web3-based websites a unique name. Rather than being known as a 64-character code that must be used when sending tokens to a particular wallet or his website, the ENS domain allows the wallet owner, business or individual to identify their wallet. can be named. With ENS, companies can have names like CFO.eth instead of randomly generated letters.
“The current Internet-based domain name system is not very secure,” said Christensen when asked about the value of ENS domain names in Web3. Blockchain is a more secure and independent way to store important brand names and corporate identities, but there are too many of them in practice to discourage companies from securing every brand across every platform. You can’t hope. Christensen said it’s better to choose a few major platforms where you’re expected to interact with your clients, and don’t worry too much about unrelated services.
“ENS is a great use case for decentralized ownership,” said Makridis. He believes companies already functioning on Web3 should have their own ENS domains to maximize the value of their ventures into blockchain-based technology and promotion.
Involving the customer-facing organization in particular,[they] By airdropping NFTs and fungible tokens, we will be able to reach consumers directly while preserving their privacy,” Macridis said. “The larger theme that corporate finance should be concerned with is the shift to decentralization, and ENS is just one use case for individuals who own domain names and the data around them.”
A future hedge against endless inflation
Elena GaladisCFO of Defy Trends, an algorithmic data-driven crypto intelligence and education platform, said: CFO Her thoughts on why investing in cryptocurrencies can be a viable long-term hedge against future inflation. I pointed out how it helps to maintain
In the long term, cryptocurrencies, especially bitcoin, are likely to act as inflation hedges due to their pre-programmed supply and demand characteristics, i.e. fixed supply. — Elena Garadis, CFO of Defy Trends
“In the long term, cryptocurrencies, especially bitcoin, are likely to act as inflation hedges due to their pre-programmed supply and demand characteristics – fixed supply,” Galadis said. “At its core, inflation is about supply and demand dynamics. Right now, the U.S. economy and much of the world economy are experiencing inflation due to COVID supply chain disruptions and rising raw material costs due to the war between Russia and Ukraine. increase.”
Galadis said the devaluation of fiat currencies is also pushing the idea of cryptocurrencies as a hedge against inflation. “Having a high-value currency in circulation means that people are accepting and paying higher prices. This is due to the increase in disposable income driven by interest rates.”
While talking about cryptocurrencies’ short-term protection against inflation, Garadis cautioned against allocating wholeheartedly to cryptocurrencies as a short-term hedge against economic turmoil. Note that we allocate cash reserves to cryptocurrencies to maintain their value. [and] medium-term operating cash reserve,” she said. “The market is still immature and volatile and cannot protect working capital.”
Blockchain-based finance executives need to continue to see demand for things like Bitcoin continue to grow with greater adoption of blockchain technology into mainstream business and corporate financial processes to become a viable hedge in the long term. pointed out that there is
“What is lacking in Bitcoin’s ability to act as an inflation hedge is the demand side,” said Garadis. “[Bitcoin] It should either remain steady or increase over time. For this to happen, we need to see massive adoption and utility that steadily builds trust and perceived value in cryptocurrencies. ”
“Cryptocurrencies are not just stores of value, they are also a rich ecosystem that can transform entire industries,” said Garadis. “This includes solving privacy, mining and interoperability issues. We believe this will also lead institutional investors to separate cryptocurrencies from traditional risk assets in their investment strategies. In the long term, cryptocurrencies, especially bitcoin, are likely to act as inflation hedges due to their pre-programmed supply and demand characteristics, i.e. fixed supply.”