The First Principles of Web3's New Economy
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The First Principles of Web3's New Economy
In the Web3 new economy, all blockchain protocols are open-source, free, permissionless, and trustless.
Navigating Web3 tides with focused insightsBy HashKey Tokenisation Team
I. Blockchain's "1995 Moment"
1.1 The Revolution of Distributed Ledger
Accounting is the foundation of human economic activity. Every major transformation in accounting methods has been accompanied by an upgrade in human economic systems and has profoundly impacted society.
Human accounting method 1.0 dates back to single-entry clay tablets used by Sumerian societies in Mesopotamia around 3500 BC. These simple ledgers recorded lending relationships developed through temples. They enabled inventory tracking and taught people how to balance income and expenditure. This was the origin of credit-based money and the first time humans observed the world quantitatively and managed their economic activities accordingly.
Human accounting method 2.0 began with double-entry bookkeeping invented during Europe’s commercial expansion in the 1300s. Double-entry accounting combined seven elements—writing, arithmetic, private property, monetary symbols, credit, long-distance trade, and capital—and established the principle that “every debit must have a corresponding credit.” This method better protected fund providers (mainly banks and investors), facilitated capital pooling and circulation, and shifted the focus from balancing income and expenses to managing assets and liabilities, profits, and shareholder equity growth. It marked a significant leap forward for human commercial civilization and played a crucial role in the rise of modern corporate systems and global financial structures.
Human accounting method 3.0 emerged in 2008 when Satoshi Nakamoto introduced blockchain technology in the Bitcoin whitepaper. Blockchain enables trusted, transparent distributed ledger recording, making value transfer as efficient and seamless as information transfer—all without reliance on intermediaries. Digitally tokenized currencies and assets not only redefine units of account but also enhance global capital flow and liquidity aggregation. Economic and financial activities now transcend national borders and increasingly expand into digital realms. Human division of labor and collaboration are undergoing profound changes—individuals are empowered, organizations restructured, and a vibrant Web3 new economy is emerging.
1.2 Maturation of Blockchain Infrastructure and Application Explosion
Blockchain infrastructure capable of supporting large-scale applications has largely taken shape. Since 2023, Bitcoin Layer-2 protocols have shown immense innovation potential. Ethereum has steadily advanced along its roadmap—from monolithic chains to Rollup-centric architecture, modular blockchains, and the Dencun upgrade, moving toward future innovations like account abstraction and chain abstraction. High-performance alternative Layer-1 chains continue iterating, with thriving and dynamic ecosystems. Meanwhile, many developers are making progress in niche areas such as full-chain game engines, real-world ZK applications, and breakthroughs in fully homomorphic encryption.
The barriers to blockchain application development continue to fall. Projects can now compare options like DApps, Rollup Apps, Layer3s, and App Chains based on scalability, decentralization, autonomy, and security, choosing the optimal technical approach. Open-source tools that reduce development complexity, ecosystem grants, and platforms fostering developer exchange and learning have made Web3 application development more convenient and efficient.
Digital currencies and digital assets are integrating into mainstream financial systems. The U.S. SEC's approval of spot Bitcoin ETFs in 2024 was a landmark event for the Web3 new economy. It connects digital assets with broader user bases and liquidity pools, securing a place within traditional financial markets. Tokenization of real-world assets and securities (RWA and STO) will further embed digital assets into mainstream finance.
1.3 Approaching Blockchain's "1995 Moment"
In the 1990s, the birth of the World Wide Web and the decommissioning of the NSFNET backbone marked the beginning of Web 1.0 commercialization. The "1995 moment" was the pivotal shift from system and architecture building to platform-driven application development. Most global internet platforms—including Amazon, eBay, Yahoo, and Google—were founded between 1995 and 2005. Looking back, key factors behind the internet’s "1995 moment" included: technological iteration and mature infrastructure; open, free, and open-source culture; vast imagination and opportunity; and strong capital support.
Today, the blockchain space possesses all these enabling conditions and is approaching its own "1995 moment." Sixteen years of technological accumulation, a vibrant developer community, continuous risk-taking and innovation, the emergence of generative AI, the upcoming Bitcoin halving, and the integration of digital currencies and assets into mainstream finance will collectively catalyze a "Cambrian explosion" of blockchain applications over the next decade. The coming ten years will be the most exciting yet—99% of wealth creation in the Web3 new economy has just begun.
II. All Value Can Be Tokenized
2.1 Value Principles of the Web3 New Economy
The Web3 new economy is a "borderless economy." Constrained by technology, transaction costs, trust radius, and enforceability of contracts, most traditional economic activities are bounded—limited to individual enterprises or industries at smaller scales, or confined within national boundaries at larger ones, requiring complex trade relations to form unified markets. Built on blockchain’s features of decentralization, trustlessness, and smart contract-enforced automatic execution, the Web3 new economy naturally transcends time, organizations, industries, and even jurisdictions. As an open and transparent global public ledger, blockchain supports borderless value creation and transfer, making it the ideal accounting system for the Web3 new economy.
The Web3 new economy follows a high fixed cost, low—or even zero—marginal cost model. This principle distinguishes it fundamentally from traditional economies. In the Web3 economy, building protocol layers and infrastructure requires significant fixed investment. But once established, using these protocols incurs minimal or no marginal cost. This accelerates application development while concentrating more value at the protocol and infrastructure layers.
In the Web3 new economy, value exists in tokenized forms—digital currencies and digital assets. The technological foundation of tokenization lies in cryptography and blockchain. Registration, issuance, and circulation of digital currencies and assets rely on distributed ledgers and accounting, while smart contracts and tokenomics enable decentralized financial services and business applications. Since 2009, research and development in blockchain-related technologies, market innovations, and regulatory advancements can all be seen as efforts to build the financial infrastructure of the Web3 new economy—a system fundamentally different from traditional financial infrastructure (see Section IV).
Beyond being tokenized, value in the Web3 new economy exhibits two additional key characteristics. First, maximizing value requires open and permissionless access. Whether at the protocol or application layer, systems achieve maximum value only through open-source, open-access, and free-use strategies, leveraging network effects to generate and aggregate value. Closed systems tend to dissipate value. Second, usage rights outweigh ownership. When systems become open-source, open-access, and permissionless, ownership diminishes in importance, while usage rights become central to value maximization. As seen in Bitcoin and Ethereum, the Web3 new economy is an open economy of usage rights.
2.2 Digital Currencies
In the Web3 new economy, as accounting shifts from centralized to distributed models, the unit of account becomes digital currency. In traditional bookkeeping-based banking systems, the unit of account is fiat money. In internet account systems relying on online registration and bank accounts for electronic payments, the unit of account is platform currency tied to fiat. In distributed ledgers, the unit of account is digital currency, primarily divided into three categories:
Central bank digital currencies (CBDCs). CBDCs are digital currencies issued by central banks and belong to the base money category (M0). Essentially, they are digital cash.
Institutional digital currencies, represented by stablecoins. In mainstream financial systems, central banks issue base money, while commercial banks create broad money (M2) via credit activities and the multiplier effect. Stablecoins are created by private institutions rather than central banks and fall under M2.
Native digital currencies, including native tokens within blockchain protocols (e.g., Bitcoin and Ether) and smart contract-based native tokens built on standards like ERC20. Native digital currencies are algorithmically issued, unlinked to fiat currencies, and represent the most innovative form of digital money. There is some overlap between native digital tokens and utility tokens discussed below.
2.3 Digital Assets
With the introduction of new units of account, the Web3 new economy has given rise to a new class of assets—digital assets—divided into four main types:
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Utility tokens, representing virtual goods. Users purchase utility tokens to gain access rights to virtual goods. Thus, utility tokens are essentially fractionalized usage rights of virtual goods.
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Security tokens, representing fractionalized ownership of companies. Traditionally, company ownership is converted into shares. With distributed ledgers, company ownership is tokenized into security tokens.
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Non-fungible tokens (NFTs). In the physical world, verifying identity or relationships often requires proofs from multiple independent institutions. In digital environments, third-party identity verification becomes difficult. NFTs serve as self-sovereign proof tools with significant value. NFTs are not only proofs of identity and credentials but also of work, contributions, rights, and powers—even potentially serving as universal self-proof tools for everything in the digital world.
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Tokenized real-world assets (RWA). Real-world assets such as real estate trusts, credit instruments, securities, and funds can be issued to investors in token form. Some RWAs may be listed on digital asset exchanges, while others trade institutionally in tokenized form.
It is important to clarify several concepts related to digital currencies and digital assets. First, digital currencies and digital assets are products of tokenization and do not include digitally formatted money and assets based on traditional account systems and double-entry bookkeeping within conventional financial infrastructure, despite their digital nature (see Section IV). Second, crypto assets are a subset of digital assets. According to the Basel Committee, all digital assets except CBDCs fall under the category of crypto assets. Third, data assets originate from data factor markets. Data assets are generally unrelated to either traditional or Web3 financial infrastructures, typically stored in databases and categorized as structured or unstructured. They are easily replicable, usable simultaneously by multiple parties without depletion, and difficult to clearly assign ownership—exhibiting strong public good characteristics. In contrast, digital currencies and digital assets have clear ownership, with transactions reflecting changes in ownership, making them classic private goods.
III. Individual Empowerment and Organizational Restructuring
Technology drives society and reshapes the future. Productivity transformations triggered by the Web3 new economy will inevitably lead to innovations in production relations, first manifested in individual empowerment and organizational restructuring.
3.1 Rise of Individual Capabilities
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Network states—trans-temporal digital spaces. The Web3 new economy is built upon interconnections among billions of computer users, creating a new social space—a global, free, and borderless network environment known as the "network state." On one hand, digital technologies transcend geographical boundaries, decouple economic functions, and break traditional employment constraints, allowing employees and employers to operate across jurisdictions. On the other hand, the global nature of the digital economy surpasses national borders, accelerating global division of labor and crowdsourced collaboration. As user groups become digitized and virtualized, more economic activities occur within the network state. This fundamentally alters information and transaction costs, thereby transforming the logic of economic and commercial activities. Global factors will grow in influence, while regional ones decline. The Web3 new economy targets global users, unlocking broader commercial opportunities beyond any single country or region.
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Sovereign individuals—individual capabilities surpassing organizations. Web3 and AGI will greatly enhance the productivity of individuals with unique skills and talents. Most occupational boundaries will dissolve, learning new knowledge will no longer require adherence to the 10,000-hour rule, and accessing professional expertise in law, medicine, programming, and art will become easier and cheaper. The economic value of memory as a skill will decline, while skills in information synthesis and creative application will grow in importance. This will inevitably disrupt existing power structures and management models in the economy. Firms’ advantages in information and transaction costs are eroding, capital taxation will decrease competitively, artificial economies of scale sustaining long-term corporate existence will vanish, and lifelong employment will disappear. At the same time, sovereign individuals are rising—gaining greater control over economic and social resources and reshaping resource allocation. Within the network state, self-governed survival principles will thrive, enabling sovereign individuals to achieve both autonomy and outsized returns. In the future, most wealth can be created, earned, spent, and traded anywhere—while businesses must adapt to empower sovereign individuals to maximize their value.
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Digital nomads—moving freely in search of opportunity. In 1997, Hitachi’s former CEO Tsugio Makimoto coined the term "digital nomad," referring to people earning first-world incomes via the internet while living in lower-cost developing countries. The Web3 new economy accelerates this lifestyle. With the emergence of the network state and the rise of sovereign individuals, talent mobility, knowledge sharing, and cultural exchange across transnational virtual communities are occurring at unprecedented scale and efficiency. For example, in Vitalik Buterin’s experimental mobile community Zuzalu, top talents from crypto, biosciences, philosophy, politics, and art around the world actively participate. Spontaneous discussions emerge on cutting-edge topics like longevity, public goods, zero-knowledge proofs, synthetic biology, and network states. After cohabiting for two months, participants disperse globally, spreading pioneering ideas. In February 2024, Japan opened a “Digital Nomad Specific Activity” residency visa, allowing IT workers six months of visa-free stay.
These phenomena appearing worldwide may seem random, accidental, and decentralized, but they share a common logic: the Web3 new economy is giving rise to new ways of living and working—blending mobility with cohesion, digital spaces with local cultures, and globalization with individualization.
3.2 Transformation of Business Organizations
In the Web3 new economy, business organizations must rethink human-machine collaborative structures and redefine the division and cooperation among intelligent agents.
We welcome OpenAI’s adoption of a unique equity structure. OpenAI has established a for-profit corporation but caps profit distributions to shareholders—an unusual governance model combining non-profit and for-profit entities. Ultimately, OpenAI aims to evolve into an open-source, permissionless, trustless, and universally accessible infrastructure akin to the internet’s TCP/IP protocol. This innovative structure would be nearly impossible under Wall Street norms. Only highly digitalized tech firms like those in Silicon Valley adopt such models. They recognize their social responsibilities and understand how, in the age of AGI, novel frameworks for profit distribution and intellectual property licensing can alleviate concerns about monopolies and disproportionate gains by a small elite.
In the Web3 new economy, all blockchain protocols are open-source, free, permissionless, and trustless. Anyone can use them, fork existing protocols, or build applications on top—no approvals required. A key difference between blockchain protocols and traditional open-source projects is the inclusion of utility tokens, which standardize and fractionalize usage rights, capture network value, and enable economic incentives and value distribution. This mechanism perfectly aligns with the high fixed cost, low marginal cost economics of the digital economy.
The ownership market is declining in significance, while the usage market rises. The industrial economy gave rise to ownership markets trading ownership (equity), grounded in shareholder capitalism. Under shareholder capitalism, corporations embody equity structures, where shareholder interests are securitized and traded on stock exchanges. The digital economy fosters usage markets trading usage rights, grounded in stakeholder capitalism. Under stakeholder capitalism, non-profits and open-source organizations dominate. Usage rights cannot be securitized—they are tokenized instead. Utility tokens derived from them are tradable on digital asset exchanges.
IV. Global Financial Infrastructure 2.0
4.1 Web3 Financial Infrastructure
Web3 financial infrastructure is the product of distributed ledgers and distributed accounting, fundamentally different from traditional financial infrastructure based on conventional account systems and double-entry bookkeeping. Traditional financial infrastructure carries currencies and financial assets such as central bank money (excluding cash), commercial bank deposits, internet payment account balances, and stocks, bonds, and commodities recorded in central securities depositories or custodians. These are essentially values represented as account balances within traditional account systems. Their transfers and transactions are fundamentally debit and credit operations based on double-entry accounting. Web3 financial infrastructure carries digital currencies and digital assets, supporting their registration, issuance, custody, circulation, trading, clearing, and settlement. Digital currencies and assets are tokenized value with property-like characteristics, notably “possession equals ownership” and “transaction (or payment) equals settlement.”
Web3 financial infrastructure represents version 2.0 of global financial infrastructure. At its core, a financial system consists of states and transactions—states reflect the distribution of assets and liabilities among participants at a point in time, while transactions represent activities driving state updates. Both states and transactions can be recorded either through traditional account systems or distributed ledger systems. Only at this level can we appreciate the innovative significance of Web3 financial infrastructure. It offers superior features in management, transactions, clearing, settlement, and privacy protection.
First, greater openness. Any individual or institution following blockchain protocols can use the system without permission or trust—key to financial democratization and inclusivity.
Second, inherently anonymous yet supporting controllable anonymity. Compared to traditional financial infrastructure, Web3 better protects user privacy and ensures user sovereignty over personal data. It can comply with financial regulations on KYC, AML, and CFT—forming the basis for digital currencies and assets to integrate into mainstream finance.
Third, peer-to-peer transactions with instant settlement. Enabled by Web3 infrastructure, any two individuals—regardless of location or mutual trust—can conduct convenient, secure value exchanges without third parties. This greatly enhances human cooperation and expands market reach.
Fourth, transactions are inherently cross-border. From inception, Web3 financial infrastructure supports global financial resource allocation, price discovery of financial assets, and risk management.
Fifth, merging value carriers with programmable logic (smart contracts) introduces programmability to transactions, enhancing composability of on-chain activities and enabling innovation unseen in traditional finance. Market validation of smart contract-driven innovation is already evident in NFTs and DeFi.
Sixth, high security. Distributed ledgers are public, secured by cryptography and consensus mechanisms, ensuring tamper-proof transaction records. Anyone can download and verify the ledger. Asymmetric encryption ensures only private key holders control their digital currencies and assets.
Web3 financial infrastructure is naturally suited to digital-native economic systems. First, in digital-native economies, asset issuance and trading are fully digital, borderless, and require a financial infrastructure supporting massive free flow and deep interoperability of value. Web3 provides the most efficient global value network. Second, blockchain’s decentralization eliminates high intermediary costs and trust barriers inherent in traditional finance. In Web3 infrastructure, users enjoy stronger sovereignty over assets, greater data transparency, and enhanced transaction security. Third, digital-native economies are usage-based, where network effects drive value maximization. Web3 infrastructure better promotes liquidity and efficiency in usage markets.
4.2 Web3 New Economy Ecosystem
The Web3 new economy ecosystem revolves around digital currencies, digital assets, and related commercial applications and activities, consisting of three main components:
Primary market activities for digital currencies and digital assets. This is the origin of the Web3 ecosystem, involving the creation and issuance of various digital currencies and assets outlined in Section II. These represent diverse values, serve different use cases, appeal to distinct investor groups, and follow varying regulatory frameworks. Primary market activities meet three key needs: project fundraising; liquidity for early investors; and network-building to foster ecosystem growth. High-quality digital currencies and assets are critical to Web3 success, requiring professional work in legal compliance, tokenization, technology development, and market expansion.
Secondary market activities for digital currencies and digital assets. The core of secondary markets is trading platforms that provide liquidity, facilitate price discovery and resource allocation, allow flexible market entry and exit, and support risk management. Currently, secondary market trading is active and diverse. Professional players and licensed regulators play vital roles in ensuring compliance and orderly market functioning. Regulators prevent market manipulation, protect investor interests, and maintain stability and transparency through strict rules. Effective regulation also boosts market confidence, attracts more participants, and accelerates the maturity and development of the entire digital financial ecosystem.
Industry services for digital currencies and digital assets. These include blockchain technical support, issuance processes, legal counsel, project consulting, and licensed financial services—providing essential support and connectivity for primary and secondary markets. Industry services cover the entire lifecycle from project launch to transaction completion, aiming to ensure every step meets industry standards and participant interests. During preparation and issuance, services include market analysis, token design, and compliance review to ensure smooth launches. Technical providers build and maintain trading platforms for security and efficiency. As projects deploy, legal and audit teams offer regulatory compliance and financial transparency support, while cybersecurity experts and AML agencies ensure transaction safety and legality. Data analytics and consulting firms deliver deep market insights and strategic advice, helping participants make informed decisions in a complex, evolving landscape. Collectively, these services aim to provide a stable, efficient, and transparent operating environment for Web3 participants, promoting healthy industry development.
V. Conclusion: The Future-Oriented Web3 New Economy
The Web3 new economy will lead the global economy toward greater openness, efficiency, and inclusivity, contributing to the prosperity and advancement of humanity.
In serving the real economy, the Web3 new economy will promote efficient resource allocation and stimulate industrial innovation and economic vitality through more efficient, transparent mechanisms for monetary and asset flows and financing. Its decentralized and programmable features will provide emerging tech startups and projects with a flexible, low-cost development environment, accelerating the transformation and application of scientific achievements.
In advancing financial development, Web3 financial infrastructure—as Global Financial Infrastructure 2.0—is naturally aligned with digital-native economic systems. It breaks down geographical and temporal barriers of traditional financial services, making finance more global and interconnected, offering new opportunities for the convergence and innovation of global capital markets.
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