Blockchain Industry Structure Discussion Paper

Working Group(s) Financial Applications & Social Economics (FASE)
1

Co-Chairs,
Regarding the Blockchain Industry Structure Discussion Paper, which we Shin’ichiro suggested in the last WG call, attached please find an English translation of provisional paper.
How we can allocate the slot for 30 minutes (20 minutes briefing by Prof. Morishita and 10 miutes discusison) in the next WG call on Wednesday 17th June, at the beggining of the call or in the late half if we have other agenda items?

* The draft in Japanese has been updated on 11th June and in the process of translation. We’ll keep you posted with the new one.

Draft_Translated_en_Blockchain_Industry_structure_discussion_paper_05182026.docx (2.9 MB)

WG call on June 17
2

Hi all, below please find the updated version (English translation) of the discussion paper to be presented during the call on June 17th.

The Industrial Structure of Digital Assets (EN)_rev.docx (1.4 MB)

Digital_Assets_Industrial_Structure.pdf (454.9 KB)

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Hi @KenKatayama @ChloeWhiteAus @shinichiro.matsuo

Please find the link to the English version of the paper here - The Industrial Structure of Digital Assets (EN)_rev.docx - Google Docs

These are my suggested updates:

  1. Separate “3.1.2 Operators and Operation-Support Providers of Chains, etc.” into two distinct profiles
    1. Profile (A) - Chain Operators: Chain Operators are the entities responsible for the existence, security, and direction of the core protocol itself. This includes the participants that perform the protocol’s essential functions, such as validators and stakers, as well as the bodies that govern and steward it: governance systems and the participants who exercise them, the supporting foundation, and, where one exists, the chain’s affiliated for-profit arm that develops core middleware, infrastructure, or enterprise services on the protocol’s behalf. What unites this group is direct influence over the protocol layer. They set or maintain the rules, the security model, and the strategic direction of the chain.
    2. Profile (B) - Essential Industry Middleware & Infrastructure: This group consists of organisations that generally provide for-profit services and infrastructure built on top of the core protocol that hold no role at the protocol layer. They provide capabilities the network relies on, such as indexers, RPCs, liquidity pools, DEXs, and oracles, but they neither set protocol rules nor direct its development. Some of these services may be functionally essential to the network, particularly where the protocol foundation does not provide them directly. The defining trait is that they consume and extend the protocol rather than govern it, and they typically operate as registered commercial entities outside the protocol’s governance.

You can find my comments on page 10 and 11.

I have more to input on this, but wanted to check if this is on the right track.

By way of next steps and paper creation, these were the outstanding “Five challenges converging at once”:

  1. The FIAE Migration
  2. Loss of a fair playing field
  3. A widening infrastructure vulnerability
  4. Asymmetry of market access
  5. concentration of compute resources

And this is coupled with “Six open questions — where we want your comments”:

  1. Competitive Asymmetry
    1. How to confront free-riding by offshore operators & DeFi — a problem no single country can solve alone.
  2. Infrastructure & Global Markets
    1. Which functions must be cultivated domestically? Which can stay offshore — and how should access run both ways?
  3. Compete vs share
    1. Where is the line between competitive functions and shared infrastructure (monitoring, custody, KYC)?
  4. Public chains & their public good nature
    1. How to connect to the global public-chain economy — and address Japan’s ‘free-rider’ state in maintaining it?
  5. Coexistence with DeFi
    1. How to institutionalize it? ‘Fully decentralized’ vs. ‘has an administrator’ is not yet settled internationally.
  6. Diversifying Capital Markets
    1. How to institutionally support new fundraising routes for those long shut out — and protect investors?

From this I propose the following:

  1. A short paper on each of the topics
  2. A broad overarching paper that covers all of the topics prior to the next block meeting

Thoughts on this @KenKatayama @ChloeWhiteAus @shinichiro.matsuo

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Hi Joey,
Many thanks for providing very thoughtful comments to revise the section. Let me work on reflecting it to original in both 3.1.X section and 3.2.X section (the latter discuss the stakeholder’s roles and core revenue sources.

Regarding the work at FASE WG, it would be good to discuss pros and cons on both start small and cover all. At this point, I am inclined to the former one so that we can deliver them in shorter cycle if appropriate.
Ken

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I agree. I’ll start work on one of the open questions.

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