Today we talk to Alejandro Laplana CEO of Shokworks a company that provides and steers emerging companies to scale with the help of Shokworks IT Developers by creating and developing
solutions using Blockchain, Web3, VR/AR, and Machine Learning. During this interview, we ask his opinion on different issues concerning stablecoins and the crypto space in general.
He also weighs in on the ties between Web3 and the blockchain.
What are your thoughts on the causes of the recent cryptocurrency crash?
A lot of retail investors fell into the hype cycle that surrounds a low-interest-rate environment and a novel asset class that is on the rise. The technology is here to stay, and many of these assets are attractive. However, a lot of alt-coins that offered dubious to deceitful forms of “value” took advantage of this wave and as a result, a lot of retail investors thought they’d get rich quick and got caught in the crossfire.
What is the impact of volatility on cryptocurrency price movements? How does cryptocurrency volatility affect the risk profile of the digital asset class?
Cryptocurrency is highly volatile because of the nascency of the product. It’s not as stable as traditional securities, which are also seeing massive volatility swings, especially in growth tech. This is an asset class with massive retail exposure and very palpable execution risk with limited disclosure requirements and regulations, and as a result, it is far riskier than traditional asset classes.
How can retail investors be protected from cryptocurrency market shocks?
The short answer is you can’t protect retail investors from cryptocurrency market shocks. It’s important to take positions in the asset class that you feel comfortable losing. Adopt risk management and try to find quality as opposed to what’s currently trending.
How have stablecoins shaped perceptions in the cryptocurrency adoption process?
The potential for stablecoins is quite massive when you take into account central bank digital currencies (CBDC), and tie it to traditional productive assets, including precious metals and real estate. The issue right now is a lack of transparency and regulatory disclosure requirements.
It makes it so that a lot of these stablecoin offerings aren’t pegged 1:1 or as is disclosed with their underlying asset. Moreover, when you see too-good-to-be-true promotions like 20% plus yield, things can start to really break down fast. But the potential is there, and new technologies will emerge to take the industry to the next frontier.
Related: Yield Generating Stablecoins
Will web3 technologies provide a foundation for the increased adoption of cryptocurrencies?
Absolutely. Now, web3 technologies provide a solution and ecosystem where digital rewards within a physical and digital hybrid can facilitate enhanced customer experiences for both the brand and users.
How can cryptocurrencies be brought into the mainstream despite the volatility issues?
Volatility is necessary to weed out weakness in the market and build the stage for far stronger offerings. Blockchain cryptocurrencies are here to stay long-term.
What do you think are the macroeconomic factors that are affecting cryptocurrency prices currently?
Currently, a lot of it is due to a contracting U.S. and global economy, China’s zero-COVID policy, the U.S. entering high inflation and as a result, interest-rate hikes. That makes global investors far more discerning in terms of what investments they enter into. Some stablecoins, for example, Luna and Terra, had to sell off a lot of their bitcoin to maintain liquidity requirements. That obviously factored negatively in the price of bitcoin. It’s quite obvious that crypto has been very much part of the capital markets at large.
Are the “wild west” days of the cryptocurrency space coming to an end? What is your take on this?
Whether the “wild west” days of cryptocurrency are coming to an end is to be determined. Further growth will drive further regulatory scrutiny. It would benefit everyone to create more compliant crypto offerings and more regulatory frameworks for issuers, from the SEC and other regulatory bodies, especially in the United States. I think it will come to an end, and we’ll have far more compliant offerings that work hand in hand with regulators – hopefully, it’ll be a collaboration and not just overregulation.
Please, can you tell us about Shokworks and the services you guys offer?
Shokworks takes companies on-chain. We invest in and develop NFTs, digital rewards, tokenization of assets and metaverse layers.
Related: Web3 Data Infrastructure
What do you think will be the next big idea in the cryptocurrency and web3 industries?
Once stablecoins mature, they will be the next big thing as they will actually peg blockchain technology to hard assets and traditional stores of value. A new blockchain-based infrastructure for the capital markets will replace the existing one as it’s far more efficient and secure.
How do you think the mass adoption of cryptocurrencies will occur?
It won’t happen through traditional securitization, within the confines of asset trading and investing. It’ll be more of a user-driven paradigm shift by which it becomes easier to transact. Right now, less than 4% of the global population holds cryptocurrencies. We must reduce the friction required to purchase an NFT — without having to register on MetaMask, without having to have your identity verified every time. Once you reduce that friction so that a normal person with a debit or credit card can purchase a digital reward, then you’ll see mass adoption in excess of double digits in the blockchain space.
With increased government interest in cryptocurrencies and their underlying technologies, where do you think the cryptocurrency space is headed?
We don’t know because there’s no clear regulatory framework. For now, it really depends on how mass adoption occurs and where the regulators step in. So far, it’s unclear whether these assets will be regulated as digital property or digital securities or if they can bypass that process altogether as utilities. Hopefully, there’s a bucket for each and the issuers are held accountable to what they create.
What do you think will be the impact of cryptocurrencies on everyday activities?
They’ll become ubiquitous in most corporate and brand loyalty and rewards programs.
Do you have any predictions about when cryptocurrency prices will return to the all-time high of $60k (BTC)?
We’re not interested in the speculative dimension of cryptocurrency, rather we’re looking to find products and solutions. Whether it be Bitcoin or Ethereum, we do know that the winners will be those that offer the highest value, best products, most secure and scalable offerings and solutions for end users and brands. We’re really taking more of a venture capital approach than we are a traditional trading approach. We’re looking at the long-term potential of the space.
Related: No Code A.I.
What is the impact of Bitcoin’s dominance on the growth and expansion of the cryptocurrency space?
Bitcoin was the first entrant and as such has taken primacy in the States. It really laid the foundation for the growth of this exciting technology. Whether it will remain dominant is to be determined.
How do environmental concerns affect cryptocurrency prices? As projects decidedly adopt Proof-of-Stake (PoS) and other carbon-neutral alternatives, what do you think the future holds for Proof-of-Work (PoW)?
Environmental concerns do not necessarily correlate positively or negatively with price points. However, based on consumer pressures, enterprise pressures, ESG pressures and regulatory pressures that may materialize in the near term, new consensus algorithms such as staking mechanisms might end up replacing Proof-of-Work down the road.
What does your cryptocurrency portfolio look like? Any pointers for retail newbies?
We invest in companies that offer solutions for end-users. We like companies like Polkadot, which offer solutions in the space. We like Kinesis Money, where they use a stablecoin to provide a yield-bearing, gold-backed cryptocurrency. We’re bullish on stablecoins and we’re bullish on adopting a long-term venture-capital model in the crypto space.