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In many ways, social media opened the world’s eyes to what the internet could do. Early social platforms like MySpace allowed anyone to instantly share media in their own streamlined website-like space within a broader social network. It helped the majority of internet users make the jump from a “read-only” experience to one where they could “write” or share blogs, videos, tweets, music, and any other digital content they wanted (aka Web2). Most importantly, it gave people a safe place to connect with each other, moving the web from an exchange of information to a network of communities. Today, the new technologies of Web3 can offer social media users another level of experience – read, write, and *own* – and open the world’s eyes to what Web3 has to offer.

This article takes a look at the choice we have for the next generation of social apps, and how blockchain-based social networks can provide more benefits and power for everyday users.

## On The Verge of Everything Apps

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Recently, social media has begun its evolution into “superapps,” where social apps like WeChat don’t just allow you to connect with friends online, but also allow you to hail a cab, order food, pay your bills, transfer cash, shop, play games, book travel, and much more. Social media’s other biggest players, like Meta and X, are striving to integrate more features into their social platforms so they can capture as much revenue as possible and provide a formidable level of convenience. However, these conveniences come at a price – further loss of data ownership and control for users. By connecting on these dominant applications, users lose autonomy over their information and their communities. Before we dive headlong into the era of superapps, maybe we should consider if there is a better method of building social media that prioritizes the user in more ways.

## Social Media’s Current Drawbacks

As the world’s largest platforms conglomerate more services, they accumulate more power. What are some of the areas of improvement we can look at when building better social apps?

**Concentration of power, lack of transparency:** Platforms like Twitter can be used to empower rebellion against corruption, as in the Arab Spring, or they can be used to silence voices, as uncovered by the Twitter Files – it all depends on the balance of control. Social media platforms haven’t always done a good job at transparency when it comes to who is pulling the strings, how algorithms are written, and how they collect and use data.

**People as products:** If you don’t pay for the product, you are the product. In many cases today, you pay for the product, and your data remains productized regardless. As your valuable data is harvested and shared among companies, there is little most people can do to claim ownership of their data and benefit from its monetary value.

**Low incentives & distribution:** Some influencers and creators on platforms like YouTube and TikTok can certainly earn huge sums, but in most cases, it takes an extreme level of effort to reach the point of reward. A new incentive scheme that favors every user will likely be a key differentiating factor when users choose from the next generation of social apps.

## Solutions From Decentralized Social Media

If social apps can house entire economies, shouldn’t they integrate easier peer-to-peer transactions and more incentives for users?  Let’s take a look at what Web3’s technology can offer both existing social companies and new decentralized social applications.

**Decentralized power, open-source code:** Blockchain-based social media provides a better opportunity to create frameworks that spread power over more parties, such as DAOs. Not being controlled by a single entity also makes apps more resistant to censorship and manipulation. This means that users can be more confident that their voices will be heard and that their data will be protected. Additionally, open-source code means that the code for decentralized social media platforms is transparent and accessible to everyone.

**Enhanced data privacy & ownership:** Decentralized social media platforms can give users more control over their data and privacy. For example, users can choose to share their data with the platform or not, and they can also choose to benefit from the monetary value of their data. Decentralized social media platforms can give users ownership of their data. This means that users can control how their data is used and who can access it.

**Distribution of earned rewards:** Decentralized social media platforms can create new incentive schemes that benefit all users, not just the top influencers and creators. For example, users could automatically receive rewards for their contributions, such as creating content, driving ad views, or opting into sharing data. Decentralized social media platforms can use blockchain technology to distribute rewards fairly and transparently. This ensures that users are rewarded for their contributions and that no single entity can control the distribution of rewards.

**Additional benefits:**

- **Social Fi:** Web3 economic mechanisms like staking or yield farming embedded or gamified in social networks.

- **Flexible payments:** As sending crypto on apps like Paypal and Venmo is now enabled, social media platforms can add more ways to pay and deliver rewards via digital currency.

- **NFT utility:** On a broadly adopted Web3 social app, NFTs can live up to their full potential for granting access passes, selling unique digital merchandise, and much more.

- **Innovative development:** Social media has looked more or less the same for some time now. Blockchain and smart contracts provide new scaffolding for developers to build innovation into social apps.

## What Are Decentralized Social Media Apps?

Decentralized social media apps are social media platforms that are developed and owned in a more collective manner. They are built using blockchain technology, which means that they are powered by a network of servers (nodes) rather than a central server. This makes them more resistant to censorship and manipulation, and it also gives users more control over their own data. Additionally, blockchain-based social apps can make full use of smart contracts and cryptocurrency in formulating new experiences.

## Some of the Top Social Media Platforms Using Blockchain

### Friend.tech

[Friend.tech](https://www.friend.tech/) has been at the top of the crypto community’s mind recently as it took the conversation on X by storm with those advertising they’ve joined and those searching for an invite link to the app’s Beta version. Friend.tech is a decentralized social media platform that allows users to tokenize their social influence and following. Users can create and sell "keys" to their account, which give buyers access to private chat rooms, exclusive content, and other features. Friend.tech is built on the Base blockchain, a Layer 2 solution for Ethereum.

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Source: [Dune](https://dune.com/home)

### Lens Protocol

[Lens Protocol](https://www.lens.xyz/) is a decentralized social graph on the Polygon blockchain. It allows users to own their own social data and relationships, and to interact with each other on a variety of platforms. Lens Protocol is still under development, but it has the potential to revolutionize the way that people use social media.

### Galaxe

[Galxe](https://galxe.com/) (formerly known as Project Galaxy) is a Web3 platform that empowers brands and developers to engage communities and build robust communities in Web3 across blockchains like Ethereum, Optimism, BNB Chain, Solana, and more. It’s decentralized infrastructure allows users to earn and own their on-chain credentials, which represent their contributions and achievements in the Web3 ecosystem.

### Metaverse

Blockchain-based metaverse platforms are shared virtual worlds where people can interact with each other and with on-chain digital objects. It is often described as a combination of technology from the Web3, virtual reality, and augmented reality. The metaverse is still in its early stages of development, but it has the potential to revolutionize the way we work, play, and socialize.

- [Decentraland](https://decentraland.org/)
- [Otherside](https://otherside.xyz/)
- [The Sandbox](https://www.sandbox.game/en/)

## Network Effect: Social Media Is Key For Web3 Mass Adoption

According to the 2022 India Internet Report by DataReportal, [61%](https://datareportal.com/reports/digital-2022-india#:~:text=Internet%20use%20in%20India%20in,percent) of Indian internet users said that social media was the main reason they started using the internet. A similar trend was seen worldwide as social media became an important part of everyday life. Social media and the world of Web3 and crypto share the “[network effect](https://cointelegraph.com/news/what-is-the-network-effect),” a phenomenon whereby the value of a product or service increases as the number of users increases. If we are able to build a successful and popular blockchain-based social media platform, we may be able to combine these network effects and springboard Web3 to mass adoption.

## Build the Future of Web3 Social Media With Ankr

Ankr has built a complete suite of products designed to make developers’ lives easier when it comes to creating any decentralized application, including Web3 social media apps. Check out our full set of tools under the “products” dropdown and get to work building the future of social.

[Start building for free →](https://www.ankr.com/)

## Final Thoughts

In conclusion, Web3 social media has the potential to address many of the problems that plague current social media platforms while adding innovative new functionality. By decentralizing power, enhancing data privacy and ownership, and distributing earned rewards fairly, Web3 social media platforms can create a more equitable and user-friendly experience for everyone.

## Join the Conversation on Ankr’s Channels

[Twitter](https://twitter.com/ankr) | [Telegram Announcements](https://t.me/anrknetworkann) | [Telegram English Chat](https://t.me/ankrnetwork) | [Help Desk](https://ankrnetwork.atlassian.net/servicedesk/customer/portal/10) | [Discord](http://discord.ankr.com/) | [YouTube](https://www.youtube.com/channel/UCErrNjCg6raOsq5MQ9fpIig) | [LinkedIn](https://www.linkedin.com/company/ankr/) | [Instagram](https://www.instagram.com/ankr) | [Ankr Staking](https://eth2.ankr.com/)

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The Future of Social Media on Web3

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Kevin is a business writer, journalist, and avid explorer of the blockchain and tech industry. His work has been covered across crypto and traditional media as Ankr’s Senior Writer, with topics spanning the big picture of “Web3,” tech breakthroughs, and how blockchain is changing our digital lives. Working with some of blockchain’s most talented engineers daily, Kevin gains unique insight into what advances we can expect next and the implications they hold for us all.

Technical Writer

Kevin Dwyer

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Account abstraction, which got its start with [ERC-4337](https://ethereum.org/en/roadmap/account-abstraction/), is a relatively new concept to Web3. However, it’s been a key narrative of 2023 because it has the potential to revolutionize the way we interact with blockchain networks. In essence, account abstraction allows users to use smart contract wallets as their accounts, rather than relying on traditional crypto wallets known as externally owned accounts (EOAs). This opens up a world of new possibilities for improved user experiences and enhanced security and functionality in blockchain applications, such as:

- Creating digital asset experiences that are just as easy as their web2 counterparts
- Onboarding new users is much easier, without the difficulties of current wallet experiences
- Enabling a more secure method of using Web3 without as many private key vulnerabilities

## Imagining a Better Experience for New Users

If you’re reading this, you most likely know how to move digital assets from one address to another, secure private keys, switch between blockchains, and check the status of transactions on a block explorer. Although these kinds of tasks may seem simple to you now, the vast majority of the world has no knowledge of these multifaceted processes. In order to onboard the next billion users to the blockchain, the Web3 community needs to make it easier to access and understand it. Account abstraction is simply a means of *abstracting* away the difficulty that comes with the current Web3 user experience.

### An example of new UX possibilities with Account Abstraction:

**Smooth onboarding**

A user signs up for a Web3 game, and a smart contract wallet is automatically generated for them. They don’t need to create an external wallet, secure a  complex 24-word secret phrase, buy a hardware wallet, or perform other complicated actions. The wallet provides in-game asset storage as seamlessly as any traditional player account.

**Digital asset quick start**

The player's smart contract wallet is programmed to automatically be sent the in-game digital currency (100 blue crystals) and a full set of NFT armor, with each unique piece living on-chain. There is no need for the player to purchase ETH or other crypto on an exchange, transfer it, and pay the gas fee. If the player desires, they can buy more blue crystals or items via the game’s marketplace at any time using traditional methods like Apple Pay or a credit card. The game’s fiat onramp makes buying items as easy as any other.

**Subsidized gas fees**

When it comes time to purchase or trade assets in the game, the player can do so without paying gas fees every time this occurs. The game’s creators have programmed all player smart wallet gas fees to be subsidized by their treasury. Since the game is built on its own gas-efficient L2, they can fund this expense with things like the purchase price of the game or other purchases.

**Flexible EOA storage**

The players can now enjoy P2E game mechanics and earn real value as they become more competitive without needing to partake in the complexity of Web3 experiences. If they desire, they can transfer their assets at any time by sending them to an externally owned account like MetaMask or another wallet linked to their player account to have more custody of their private keys. The above benefits and principles can be applied to virtually any blockchain use case.

## Account Abstraction High-Level Concepts

Externally Owned Accounts are familiar to all of us who use wallets like MetaMask or Trustwallet. They are controlled by private keys, and they can be used to initiate transactions and execute smart contracts. However, EOAs have a number of limitations. For example, they can be difficult for new users to set up, vulnerable to phishing or other attacks, and they can be difficult to use for complex transactions.

Smart contract wallets are a type of wallet that uses smart contracts to manage user funds. They offer a number of advantages over EOAs, such as improved security and flexibility. However, smart contract wallets are also more complex to use, and they can be difficult to integrate with existing blockchain applications.

Account abstraction solves these problems by allowing developers to create smart contract wallets that are as easy to use as EOAs, while still offering the advantages of smart contracts. This is done by abstracting away the complexity of smart contracts from the user, and providing a simple interface for interacting with the blockchain.

## How Account Abstraction Works

Account abstraction works by introducing a new type of account called a smart account. Smart accounts are special-purpose smart contracts that define and manage a user's Ethereum account. They can be programmed with custom rules for spending coins and transferring assets, and they can also be used to implement advanced features such as social recovery and multi-signature wallets.

To use a smart account, users simply need to interact with it through a simple interface. The interface can be provided by a wallet application, or it can be built into a specific blockchain application. The interface will take care of all of the complex details of interacting with the smart contract, such as signing and sending transactions.

## What Can Smart Contract Wallets Do for Web3?

- **No more seed phrases:** Account abstraction will allow users to create and manage accounts without having to remember or store seed phrases. This is because the smart contract that implements account abstraction will take care of all of the key management and signing operations.

- **User-friendly account recovery:** Account abstraction will also enable user-friendly account recovery. If a user loses access to their account, they can simply recover it by providing their social recovery information. This is a much simpler and more user-friendly process than having to recover a seed phrase.

- **Subsidized Gas Payments:** Account abstraction can also be used to subsidize gas payments for users. This is because the smart contract that implements account abstraction can pay for the gas fees associated with user transactions. This can make it more affordable for users to interact with the blockchain.

- **Programmability:** Smart contract wallets can be programmed with custom logic to perform a variety of tasks, such as multi-signature signing, social recovery, and gasless transactions. EOAs, on the other hand, are limited to the basic functionality of sending and receiving transactions.

- **Enhanced Security:** Smart contract wallets can offer enhanced security features, such as key sharding and multi-signature signing. This can make them less vulnerable to theft and hacking than EOAs.

- **More Flexibility**: Smart contract wallets can be integrated with a variety of decentralized applications (DApps) and protocols. This gives users more flexibility in how they manage their assets and interact with the blockchain ecosystem.

## How Developers Are Using Account Abstraction

Developers are using account abstraction to create a wide range of new and innovative Web3 experiences. For example, account abstraction can be used to create wallets that are more secure and easier to use than traditional EOAs, implement new features like social recovery and multi-sig, and

allow users to interact with blockchain applications in a more seamless and integrated way.

Here are some specific examples of how developers are using account abstraction to make better Web3 experiences:

- Safe (previously Gnosis Safe) is a multi-signature wallet that uses account abstraction to implement advanced security features. It allows multiple users to share control over a wallet, and it requires multiple signatures to authorize transactions.

- Argent is a smart contract wallet that is designed to be as easy to use as a traditional EOA wallet. It uses account abstraction to hide the complexity of smart contracts from the user, and it provides a simple interface for interacting with the blockchain.

- MetaMask is a popular browser-based wallet that is adding support for account abstraction. This will allow users to interact with smart contract wallets directly from MetaMask, without having to switch to a different wallet application.

## Final Thoughts

Account abstraction is a powerful new technology that has the potential to revolutionize the way users interact with blockchain networks. It is still under development, but it is already being used by developers to create innovative new Web3 experiences. As account abstraction becomes more widely adopted, we can expect to see some extremely exciting and innovative use cases emerge.

## Join the Conversation on Ankr’s Channels

[Twitter](https://twitter.com/ankr) | [Telegram Announcements](https://t.me/anrknetworkann) | [Telegram English Chat](https://t.me/ankrnetwork) | [Help Desk](https://ankrnetwork.atlassian.net/servicedesk/customer/portal/10) | [Discord](http://discord.ankr.com/) | [YouTube](https://www.youtube.com/channel/UCErrNjCg6raOsq5MQ9fpIig) | [LinkedIn](https://www.linkedin.com/company/ankr/) | [Instagram](https://www.instagram.com/ankr) | [Ankr Staking](https://eth2.ankr.com/)

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Using Account Abstraction To Enhance the Web3 Experience

Liquid staking has been a raging utility in the blockchain sphere for quite some time now, and rightfully so. Users are flocking to liquid staking services due to the benefits they offer over traditional Proof-of-Stake (PoS) staking. They overcome the illiquidity associated with staking assets to secure PoS networks, making it possible to tap into the staked value and accrue additional yields in the true DeFi sense. Essentially, users get handed liquid staking tokens (LSTs) that reflect the same value as the staked assets, enabling them to grow their returns by holding them or moving them to other dApps to farm greater rewards.

Nevertheless, liquid staking, despite the advantages offered, still presents obstacles to PoS networks like Ethereum, against which the network’s proponents are voicing their concerns. A major one is the centralization of the network. Since users are turning to massively popular staking services, staked ETH is being concentrated among a few liquid staking players, giving them increasing sway over Ethereum’s consensus mechanisms. Moreover, entrusting ETH with third-party [liquid staking](https://www.ankr.com/blog/liquid-staking-risks/) providers introduces additional risks in the form of smart contract vulnerabilities. Bugs in liquid staking contracts can let hackers exploit them and walk away with users’ value.

Restaking, a novel primitive in the staking landscape, is shaping up to be the solution to liquid staking’s challenges, bringing increased decentralization and security to the ecosystem while users earn greater staking returns.

## What is Restaking?

Restaking is an innovative version of staking on Ethereum, where stakers use the same collateral staked towards securing the blockchain to secure other applications simultaneously. Basically, the resources needed to validate Ethereum transactions can now be harnessed to validate transactions on other implementations like dApps, oracles, layer-2 sidechains, and more, called AVSs (Actively Validated Services). The innovation removes the need for AVSs to build and operate their own security infrastructure and, instead, rely on Ethereum’s well-established security resources. This mechanism would not exist without EigenLayer, the cutting-edge protocol that introduced the restaking mechanism.

## EigenLayer – Revolutionizing Ethereum Staking with Restaking

EigenLayer allows ETH, and more recently ETH-based LSTs, to be restaked through its layer, operated by on-chain, decentralized smart contracts. Staking ETH this way hands the withdrawal rights of the staked assets to EigenLayer, making it possible to enforce additional slashing procedures on top of Ethereum’s slashing mechanism.
EigenLayer’s opt-in slashing feature enables AVSs to enforce validation rules to protect their networks from validators behaving dishonestly during transaction consensus or harming them in any way. Ergo, EigenLayer enables top-tier security for AVSs depending on Ethereum stakers opting into its restaking mechanism while providing monetary benefits to staking participants. The restaking protocol elevates the Ethereum network’s security to meet the needs of AVSs while increasing its decentralization.

## How Restaking Benefits the Staking Ecosystem

Staking participants such as delegators and validators staking on Ethereum over the restaking layer can gain rewards from the Ethereum blockchain and the AVSs secured via restaking. Moreover, the restaking mechanism routes the staking returns back into validator staking pools, increasing the stake size of participants and consequently compounding their staking rewards. At the same time, reintroducing rewards into staking pools increases network security. With more amounts in validator pools, validators are inclined to act honestly and keep up Ethereum’s transaction integrity.

Another benefit of restaking is the development of validator markets. These markets will comprise ETH validators who are securing AVSs that want to tap into Ethereum’s resources. Not only do the increased restaking yields attract more validators to these markets, but they even bring more delegators looking to stake through these validators for a portion of the attractive returns. This implies growing participation in Ethereum’s consensus mechanism. Increasing validator nodes further decentralizes the network, and booming ETH stakes make it more secure.

The AVSs accessing security from ETH validators will also use Ethereum’s growing validator base, benefitting from levels of security that would not be attainable if they built their own validating systems from scratch. Additionally, the costs incurred by developing their own decentralized systems would amount to more than using validating resources available on restaking markets.

Furthermore, restaking mechanisms utilize smart contracts for their functioning. Staking on Ethereum, collecting and reintroducing rewards into staking pools, and enforcing honest behavior during validation are based on user-verifiable smart contract executions, driving up transparency, which enhances security and decentralization.

## Liquid Staking and Restaking Go Hand-in-Hand.

As the restaking concept catches on with blockchain and DeFi users, growing developments combine it with the other popular staking utility – liquid staking. Users staking ETH through liquid staking services do not have to unstake their assets to indulge in restaking. Eigenlayer’s restaking mechanism lets users participate using their ETH liquid staking tokens (LSTs). Since LSTs act as receipts to users’ stakes on Ethereum through liquid staking services, they are compatible with restaking.

With that, users can help decentralize and secure the Ethereum blockchain by staking their ETH-based LSTs on EigenLayer and even other purpose-built restaking platforms like GenesisLST and InceptionLST. These platforms are constructed on EigenLayer, pushing restaking to newer possibilities by boosting liquidity.

### GenesisLST

A great example of a restaking service, GenesisLST lets users be a part of staking’s latest evolution with exciting rewards generated by restaking ETH or LSTs on Ethereum and AVSs. GenesisLST enables users to restake their assets with custom options over various levels, including choosing the AVS they want to see validated and the validators securing them.

This platform also offers users the genETH liquid restaking token (LRT) on their restaked assets. The liquidity provided to users on their restaking endeavors can be utilized on DeFi protocols on Ethereum and its layer-2 chains to attract even greater rewards. It uses the LST2 Protocol to securely move genETH tokens between the two layers and enable a composable DeFi ecosystem for its users.

Validators restaking on GenesisLST must delegate their validation keys to the platform’s Ethereum node operators. From there, the platform engages with EigenLayer, redirecting the funds through the protocol’s smart contracts to access AVS validation rewards. Users wanting to hand over the hassles of operating their own Ethereum and EigenLayer nodes can turn to GenesisLST.

### InceptionLST

InceptionLST is another platform innovating on top of the already avant-garde restaking process. The platform allows restaking LSTs to secure Ethereum and AVSs, unlike the former platform that lets users restake pure ETH and LSTs. Where it resembles GenesisLST, however, is the offering of additional liquidity balanced against the restaked LSTs in the form of the inETH2 LRT.

The LRT, like genETH, enables users to take their DeFi strategy past Ethereum to leading layer-2 blockchains where several interesting opportunities reside. InceptionLST, too, relies on the LST2 Protocol to bridge its inETH2  tokens securely between the two layers.

Where InceptionLST differs from GensisLST is in how validators use the platform. Unlike the latter, validators do not have to delegate their validation keys. Instead, they validate transactions on the Ethereum network with their own node setups while interacting with the EigenLayer for additional rewards. Those possessing technical knowledge of handling staking hardware and prefer indulging completely in Ethereum PoS staking can restake using InceptionLST.

## Is restaking the future of liquid staking?

With rapid developments at the staking end of blockchain technology, newer implementations are acting as solutions to problems with existing ones. They do so while pushing reward generation further than before. Restaking is the next step in PoS staking’s evolution, providing increased decentralization and security at the blockchain and application levels. If that was not enough, staking participants receive greater rewards than before, motivating them to make the Ethereum blockchain more robust, where restaking developments get witnessed presently.

Projects like GenesisLST and InceptionLST are implementing the restaking mechanism developed by EigenLayer, offering users the mechanism’s benefits and more. Users restaking ETH and ETH-based LSTs on these platforms are making the most out of their assets while improving Ethereum’s security upkeep. The LRTs provided to users for their restaking efforts extend the basis of liquid staking, delivering DeFi reward generation on additional levels.

EigenLayer’s restaking paradigm lets blockchain participants improve decentralized consensus while profiting larger than before. As more platforms built over EigenLayer emerge, coupling their developments with it, DeFi is on the brink of witnessing yet another novel avenue with ground-breaking outcomes called EigenFi.





Explore the transformative concept of restaking in our essential guide. Learn how it revolutionizes staking and its implications for the future.

Restaking: The Essential Guide & Future of Liquid Staking 

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Restaking: The Future of Liquid Staking 

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Diogo Costa

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We are thrilled to announce that Tencent Cloud has joined forces with Ankr to launch its first Web3-native product, Tencent Cloud Blockchain RPC, for organizations and enterprises seeking faster and more robust blockchain infrastructure access. Jointly developed by Ankr and Tencent Cloud, this new offering highlights the shared objective of both companies to provide solid and dependable Web3 infrastructure and developer services to Web3 builders. The jointly developed RPC Service strives to provide enterprise-grade blockchain node infrastructure that enables developers to stay ahead in the rapidly evolving Web3 environment.

> "The initiation of our partnership with Tencent Cloud is a pivotal moment for Ankr and indicates the leaps made by the decentralized internet in integrating with the vital infrastructure of the broader web ecosystem. It paves the way for an era of accelerated development in blockchain applications, whether from emerging Web3 initiatives or established enterprises, and creates a path for further collaboration and innovation."
– Stanley Wu, Co-Founder and CTO of Ankr

## Details of the Tencent Cloud Blockchain RPC

Now available via Tencent Cloud’s online marketplace, the Remote Procedure Call (RPC) service creates an instant portal to access essential blockchain networks for its expansive user base. The service provides developers with a convenient means of querying data and processing transactions on an assortment of blockchains, such as Ethereum Mainnet, BNB Smart Chain, and Polygon PoS.

The strategic alliance leverages technological expertise from both parties, merging Ankr's cutting-edge blockchain infrastructure with Tencent Cloud's unparalleled capabilities. The RPC Service will have a strong advantage in the market by offering high concurrency performance, supporting a regular request volume of up to 1,800 requests per second per chain, relying on Ankr’s node expertise and infrastructure stability.

Tencent Cloud Blockchain RPC will provide two versions – public, for free blockchain interaction with set features and rate limits; and premium, for Pay-as-you-Go blockchain interaction with increased request throughput and enhanced rate limits. Tencent Cloud Blockchain RPC will also launch an enterprise-exclusive version of the service, covering more use cases and major regions worldwide in the near future. In addition, new supported blockchains and an advanced API service will be gradually integrated with the public and premium versions of the service.

## A Final Note

At Ankr, we are dedicated to delivering leading-edge technology that helps our customers stay ahead in a rapidly changing industry so they can create experiences that amaze their users. By partnering with Tencent Cloud, Ankr can expand our resources, expertise, and global reach, letting us double down on our mission. As we explore more potential solutions and opportunities with our newfound partner, we share the excitement of our community in what we’ll look back on as just the beginning of the new era of the decentralized web.

## Join the Conversation on Ankr’s Channels

[Twitter](https://twitter.com/ankr) | [Telegram Announcements](https://t.me/anrknetworkann) | [Telegram English Chat](https://t.me/ankrnetwork) | [Help Desk](https://ankrnetwork.atlassian.net/servicedesk/customer/portal/10) | [Discord](http://discord.ankr.com/) | [YouTube](https://www.youtube.com/channel/UCErrNjCg6raOsq5MQ9fpIig) | [LinkedIn](https://www.linkedin.com/company/ankr/) | [Instagram](https://www.instagram.com/ankr) | [Ankr Staking](https://eth2.ankr.com/)

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Ankr and Tencent Cloud Partnership Launches To Provide Blockchain RPC for Developers

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In March of this year, the CEO of BlackRock (the world's largest asset manager with over $9T) made a bold [statement](https://finance.yahoo.com/news/blackrock-ceo-says-next-generation-120411520.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAKAK-L73HI8RykmrgXwa72T5fh277ujQ-6qfS4EDbbNMexFYotDLf84jDFR9fIDDoK-skCfrr9rpqo-yktiPqUAcHJnY6qzHLNB8c2oiuqKkEfFOSZE6HOnDiY1nnofmZ6Ia_rx4ENpJxzb2EcdSBtHVWojPgy5T6t31haTPBA8W):
 “The next generation for markets, the next generation for securities, will be the tokenization of securities.” Tokenization of assets is a blockchain use case that involves representing real-world assets (RWAs), such as real estate, shares, commodities, and even loyalty points, as digital tokens. These tokens can then be traded on blockchain-based exchanges or transferred to other users.

This article looks at one of the most significant blockchain narratives of 2023 and how enterprises and Web3 organizations can prepare for the coming wave of tokenization.

## The Tokenization Timeline of 2023

Below are a few tokenization happenings that have made headlines so far this year.

- January: Goldman Sachs announces their digital assets platform GS DAP is live and issues the [first fully digital bond](https://blog.digitalasset.com/news/goldman-sachs-tokenization-platform-gs-dap-leveraging-daml-goes-live) on a private blockchain

- June: Bank of America releases a report that estimates traditional [asset tokenization reaching over $16 trillion](https://rsch.baml.com/access?q=s-i517792VNkDKydHLEioQ), transforming infrastructure and markets over the next 5-15 years.

- June: Swift, a global messaging system that connects over 11,000 financial institutions, implements a successful [tokenization pilot](https://www.swift.com/news-events/press-releases/swift-unlocks-potential-tokenisation-successful-blockchain-experiments).

- July: JPMorgan Chase announces successful [tokenization of ownership interests](https://www.jpmorgan.com/content/jpm/jpmorgan/global/US/en/solutions/treasury-payments/insights/blockchain-onyx-asset-tokenization.html) in Money Market Fund (MMF) shares as collateral.

- September: [Tokenization Advocacy Group](https://www.coindesk.com/business/2023/09/07/tokenization-advocacy-group-wants-to-bring-the-next-trillion-of-assets-to-blockchain/) by Coinbase, Circle, and Aave is founded in an effort to expedite tokenizing the “next trillion dollars of assets.”

## Why Are Institutions Buying Into Tokenization?

The world's financial and business systems rely on a complex, slow, and fragmented web of technologies that lead to operational friction and wasted time. Tokenization solves this problem by creating a standardized and interoperable way to represent assets and transactions, which can be used to automate and streamline processes across different systems.

In other words, tokenization breaks down silos between different systems, making sharing data and moving assets easier. Here are just some of the benefits:

- **Instantaneous settlement:** Tokenization can enable real-time settlement of asset transactions, reducing counterparty risk and improving efficiency by eliminating the need for many intermediaries to process and approve transactions.

- **Reduced fees:** Tokenization can automate many of the manual processes involved in trading and managing assets, leading to significant cost savings by reducing the need for paperwork, reconciliation, and other administrative tasks.

- **Increased liquidity:** Tokenized assets can be divided into smaller denominations and traded on exchanges, making them more liquid and accessible to a broader range of investors by reducing the minimum investment threshold and making it easier to trade assets.

- **Enhanced transparency:** Blockchain technology provides a public and tamper-proof ledger of all asset transactions, which can help to increase transparency and accountability in the financial system by making it easier to track and audit asset ownership and transactions.

- **Expanded access:** Tokenization can democratize access to assets by making them accessible to retail investors and those in emerging markets by reducing the barriers to entry, such as high minimum investment requirements and complex paperwork.

## Enterprise Use Cases for Tokenization

Here are some specific examples of how blockchain tokenization is being used in different industries:

- **Retail:** Tokenization enables new ways to interact, pay, create, and earn with digital tokens used to represent information and provide new frameworks for rewards, access, and ownership. From social media to eCommerce, tokenization is unlocking new experiences, investment mechanisms, and income streams for consumers and businesses alike.

- **Healthcare:** Tokenization is transforming healthcare by improving interoperability between providers and systems. Tokenized medical records and other sensitive data can be stored on a tamper-proof ledger, ensuring a higher standard of privacy and security.

- **Finance:** Tokenization is creating a new foundation for financial operations, from banking to exchanges. Enhanced on-chain ownership, tracking, transparency, and accelerated settlement are making financial transactions faster, more scalable, and more affordable. Tokenization also enables 24/7 trading of all desired digital security tokens.

- **Supply chain:** Tokenization is revolutionizing supply chains by providing transparency, traceability, and security at every step of a product's journey. Immutable record-keeping minimizes the potential for fraud or errors, optimizes supply flows, and increases trust among all participants.

- **Real estate:** Tokenization is increasing the transparency and security of title records, reducing transaction costs, and expediting property transfers. A new framework for mitigating fraud and property ownership management is emerging, providing a more efficient and equitable real estate market for all.

- **Energy:** Tokenization enables individuals and organizations to trade energy as a commodity and sell excess power back to the grid. This creates new revenue streams for energy producers and harnesses a secure and transparent means of tracking energy production and consumption.

## Enable Tokenization for Your Enterprise With Ankr

**Best Practices for Blockchain Infrastructure Behind Tokenization**

**Private:** In July of this year, Bank of America released a [Tokenization Report](https://rsch.baml.com/access?q=s-i517792VNkDKydHLEioQ) that detailed the benefits of tokenization and that blockchains such as Avalanche allowed for the modular creation of dedicated private blockchains on top of the network. A private blockchain is a blockchain network that is permissioned, meaning that only authorized participants can join the network. This can be important for enterprises that want to keep their data and transactions private.

> I’ll speak from a highly regulated U.S. bank. We are actually not allowed to do anything on a public blockchain, be it permissionless or otherwise. The rationale being safety and soundness. Most of the development you will see certainly from the U.S. banks, JP (Morgan), ourselves and many of the others, will be on a private blockchain.
– Mathew McDermott, head of Digital Assets at Goldman (source: [Ledger Insights](https://www.ledgerinsights.com/goldman-sachs-tokenization-not-public-blockchain/))

**Interoperable:** An interoperable blockchain is a blockchain network that can communicate with other blockchain networks. This is important for enterprises that want to be able to exchange data and assets with other organizations.

**Secure:** A secure blockchain is a blockchain network that is protected from unauthorized access, hacking, and fraud. This is important for enterprises that want to protect their data and assets.

**Scalable:** A scalable blockchain is a blockchain network that can handle a large number of transactions without compromising performance. This is important for enterprises that want to be able to process a high volume of transactions.

**Compliant:** A compliant blockchain is a blockchain network that complies with all applicable laws and regulations. This is important for enterprises that want to avoid regulatory scrutiny.

Ankr's customizable blockchain infrastructure is designed to deliver all of the above benefits for enterprises.

## Create Your Private Blockchain With Ankr

**[Blockchain creation as a service](https://www.ankr.com/app-chains/):** Ankr empowers enterprises by creating highly customizable private blockchains on top of various blockchain ecosystems. Ankr offers diverse options for launching your blockchains with customizability at every level for infrastructure built around your unique use case. As the approved infrastructure partner for building dedicated blockchains on ecosystems like Polygon, Avalanche, and zkSync, Ankr simplifies blockchain development for all use cases. Ankr creates blockchains for projects while satisfying every requirement for infrastructure and engineering like validators, RPC nodes, block explorers, testnets, staking platforms, and more for completely custom blockchain solutions.

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