The specialists of the Land of the Rising Sun are known for innovations in the fields of medicine and electronics. By 2023, the interest of Japanese developers has turned to the Web3 industry. This is helped by the awareness of the population. Japanese people are increasingly using cryptocurrency: the number of accounts for storing digital assets is growing by 15% annually. Deposits on them amount to $500 billion. According to a BitFlyer survey, 14% of the country’s residents already use cryptocurrencies.
Japan’s strengthening of Web3 market development
The government, represented by the Financial Services Agency (FSA), regulates the industry at the level of laws. On the one hand, the supervisory body pursues a strict policy and allows not all projects to operate. On the other hand, it helps the public to trade cryptocurrencies safely. As a result of the legal pressure of the FSA, 10 thousand users of FTX Japan were able to return the deposits blocked due to the crash. The amount amounted to 23 billion yen ($175 million).
Japan aims to become an important hub for the digital economy. At the same time, the country tries to put the safety of users above the trade attractiveness.
In turn, cryptocurrency holders in the country are showing more interest in startups with working technology at the foundation.
Difficulties for entering the local Web3 market
Foreign projects are looking for opportunities to enter the Japanese economy. The main reasons are the reliability of the financial system and user interest. However, external entrants face the difficulties of cultural differences and strictness of requirements. Web3 startups in Japan must provide financial statements, confirm the security of services and the legality of transactions (Anti-Money Laundering, AML). Mandatory identity verification (Know-Your-Customer, KYC) must be performed on users.
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It is also required to comply with strict rules for advertising cryptocurrencies. It is important to openly warn about the risks of using digital assets. Combined, this becomes a barrier for external players to enter the country’s Web3 sector. Steps to relax the regulatory framework in Japan are increasing interest in the jurisdiction from foreign projects.
In the recent past, representatives of the ruling Liberal Democratic Party have proposed three amendments: revise the corporate tax for crypto startups, reduce levies on income from trading digital assets, and equate DAO organizations with traditional companies (LLCs).
Changes to token listing are also up for consideration. They were initiated by the Japan Virtual Currency Exchange Association (JVCEA). It includes the country’s licensed trading platforms. If the amendments are adopted, it will become easier to list cryptocurrency on exchanges. This will increase liquidity and attract funding to the country’s Web3 sector.
For now, however, strict requirements are making it difficult for Web3 projects to expand in Japan. Local networks are the opposite – creating development opportunities for external developers.
Aki Network opens the gateway to Japan
The project is building its own blockchain protocol to host Web3 tools. At the same time, it plays an important role in Japan’s crypto community.
With the participation of Aki Network, Asia’s largest blockchain development conference, CoinPost WebX, was held in July 2023. The protocol is supported informationally by CryptoTimes, the country’s leading online cryptocurrency news publication. The cooperation allows to cover the project’s innovations and influence the development of the digital industry sector in Japan.
Akatsuki, the country’s largest gaming conglomerate, is behind the creation of the network. To implement the protocol, the founders allocated an independent fund called Akatsuki’s Emoote. Its main goal is to develop Web3 solutions based on the Aki Network (Aki Protocol).
At the initial stages, the network also received financial support from another major investor – billionaire Yusaku Maezawa. The businessman is also known as the head of DearMoon, a company associated with space technology manufacturer SpaceX. Maezawa visited the International Space Station in 2021. One of the venture capitalist’s areas of interest has been cryptotechnology. As part of the subsidiary MZ Web3 Fund, Maezawa allocated $100 million for the development of Web3 startups.
Combined, this gave Aki Network a serious technological base. At its core, the network connects Web2 users, Influencers and decentralized applications on blockchain (dApps). In other words, it allows you to quickly tell a prepared community about new crypto projects. At the same time, users are rewarded in digital tokens for their activity.
Aki Network’s outreach activities attract new users to the ecosystem. Within its framework, opinion leaders support individual decentralized applications (dApps). The network creates a foundation for communication and also automatically analyzes data from advertising campaigns.
By 2023, the ecosystem will be used by 300 thousand participants. Of these, 2.4 thousand belong to opinion leaders. This allows piercing to quickly gain popularity in the segment and become a social gateway between Web2 and Web3. Due to referral invitations, 295 thousand more users joined the network.
The project continues to attract funding. Approximate valuation of Aki Network is $40 mln. Based on its results, the beginning of the seed stage of fees is announced. Crypto startups and venture capital firms have already joined the company, among them:
- Mask Network
- Alchemy Pay
- Incuba Alpha
- Meteorite Labs
- CatcherVC
- Alchemy Pay
- Futurism Labs
- Oxbull
Growth performance of projects within the ecosystem
Aki Network is contributing to support the decentralization of third-party blockchain tools. Among them is a campaign for infrastructure application EthSign. Using the protocol, 35k unique users were able to complete a pool of required tasks on the project’s testnet in 2 weeks.
Also on the basis of Aki Network were released NFTs for the Michael Jackson Foundation. After that, the collection was completely sold out. This also happened within the ecosystem.
With the help of Aki Network, the DeFi protocol SynFutures conducted the first phase of the launch. Within three weeks, 15 thousand users joined the project’s social networks.
Among the successful cases is a campaign for an immersive MMORPG crypto-game called Cradles. It was developed by Animoca Brands studio. Aki Network increased traffic in the project’s social networks three times.
According to the indicators, the protocol allows you to create 80% of additional traffic. Due to the referral system, its conversion rate is 80%.
Partners of Aki Network
In 2023, a major agreement was concluded with Mask Network. The mutual partnership allows to expand the reach of users. At the same time, Mask receives the protocol technology as an infrastructural tool to analyze the action of its audience.
Another collaboration allowed to team up with the Alchemy Pay payment system. The project made headlines on the back of a recent partnership with Visa/Mastercard, and after the integration of Apple Pay and Google Pay. Since the beginning of 2023, the exchange rate of the native token of the payment instrument ACH has grown 6 times. Developers have already realized cryptofiat exchange, bank card issuance and payment terminals.
The internal cryptocurrency of the Aki Network (AKI) protocol is also featured in the lists of digital assets available for payment. Alchemy Pay is supported through a network of partnerships in 170 countries.
The third significant partner is CyberConnect. The social network was the first platform to integrate Aki Protocol.
With Aki Network, Futurism Labs, Oxbull and DODO form communities and organize incentive campaigns for their users. The StepN and Fusionist projects also run their development campaigns based on the ecosystem.
Airdrop AKI
Owners of the network’s internal token get early access to promotions in the ecosystem itself. Also, the AKI cryptocurrency fulfills additional roles.
| Function | Commentary |
|---|---|
| Asset helps to become an Influencer in the protocol ecosystem | |
| Native cryptocurrency gives holders the right to vote on important development issues within the DAO project | |
| AKI token has liquidity and is traded on exchanges |
The developers of Aki Network reported about the future token airdrop. To get it, you need to register in the network and complete a list of tasks. It is reported that airdrop will be one of the three stages of motivation. However, the details of the other two campaigns have remained undisclosed so far.
Conclusion
Japan is cautious about crypto projects on its territory and imposes deterrent restrictions. Nevertheless, the Web3 sector is developing rapidly, as confirmed by the strong growth of Aki Network over the past year. Support of the protocol by large investors helps to achieve the planned development goals. The company’s prospects have been evaluated at the governmental level. According to the comments of Japanese politicians from the ruling party, Aki Network can become a good foundation for the development of Web3-sphere in the country.
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Author: Saifedean Ammous, an expert in cryptocurrency economics.
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