Benzinga - by Bibhu Pattnaik, Benzinga Staff Writer.
Nischal Shetty, a software engineer who embarked on an entrepreneurial journey, introduced the layer 1 blockchain network Shardeum in February 2022. Shardeum claims to be a pioneering, linearly scalable layer 1 blockchain network that will directly confront the Ethereum blockchain, pledging to provide enduringly nominal gas fees while maintaining decentralization and robust security.
The introduciton of the network coincided with a substantial downturn in the global cryptocurrency market and a continued dip in trading volumes among Indian crypto exchanges, including Shetty's WazirX.
Benzinga recently spoke with Shetty about the roadmap ahead for Shardeum, the position of WazirX, the current state of the cryptocurrency market and how he foresees the crypto industry's progress in the next five years. Here is an excerpt from the interview.
Can you offer insights into Shardeum's recent performance and its upcoming strategic plans?
Since the project's announcement in February 2022, Shardeum has become one of the fastest-growing L1 communities. Shardeum's betanet "Sphinx" is the most permissionless testnet with over 22,000 community-run validators. We've seen over 7.4 million transactions on the testnet (including Alphanet and Betanet) with over 820,000 accounts. Since day 1, we've strived to follow the guiding principles of OCC (open, collaborative and community-driven) and build in public. Shardeum's growth is driven by hundreds of contributors who help in various ways like organizing events, deploying Dapps, creating content and creating self-run communities in their countries. With our most recent Proof of Community Backpacking initiative, Shardeum will educate over 7,500 students across 50-plus educational institutions in 28 Indian states and Nepal over 90 days. The program aims to introduce the student community to the world of Web3 and its potential. We recently published a public roadmap to mainnet to give a comprehensive view of the crucial features that need to be completed to ensure a successful mainnet launch. The roadmap offers a clear peek into the team's progress. We are in the final stages of development and plan to launch an incentivized testnet as soon as the release candidate is ready.
In July, Shardeum successfully concluded a $5.4 million funding round. Please elaborate on the details of this funding and how the company plans to utilize these funds.
We're grateful for raising an oversubscribed round during a bear market. We introduced this round to onboard several Web3 project teams that wanted to be closer to our mission, as well as strategic funds that would bring strategic value along with capital, help unlock new geographies for Shardeum and create new communities. With over 800,000 users while being in the testnet, it makes Shardeum the largest Testnet Layer1 ever. We're seeing strong demand from several countries around the world. We intend to use part of the funds to unlock new geographies. The strategic round will accelerate Shardeum's growth in liquidity, user and developer adoption, ecosystem expansion, further market penetration and brand awareness.
Regarding your position at WazirX, where does the company stand, and what are its prospects and initiatives?
The last 12 months have been about building the expected compliance features in WazirX. WazirX has now become a reporting entity with the FIU in India. While WazirX was always compliant in terms of KYC and AML, many new expectations have been introduced due to the inclusion of crypto businesses as reporting entities to FIU in India. We've also continued our crypto education and awareness journey throughout India. The crypto ecosystem in India is still in its formative years, and it is essential to ensure we help build the ecosystem correctly. India will be one of the largest crypto ecosystems in the world in the next few years and will reach over 100 million users. We're excited about the market's growth and have been building with that in mind.
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India has indicated its intention to assess and establish its stance on cryptocurrency and related regulations soon. What are your thoughts on this development and its potential impact on the crypto industry?
India is headed in the direction of positive crypto regulation. With exchanges now reporting entities to FIU, it helps identify suspicious transactions and eliminate malicious actors. We hope that the government rethinks on the 1% TDS as that is a significant barrier to the growth of the local crypto ecosystem in India, and it pushes users to non-compliant exchanges and methods as a result. Bringing the TDS to 0.01% would help India achieve its goal of tracking all crypto transactions and, at the same time, ensure that trading activities are conducted on compliant crypto exchanges.
What's the current state of the cryptocurrency market, and where do Bitcoin and other cryptocurrencies stand regarding their prospects and challenges?
The market is in a state of consolidation, with most prices trading sideways. Bitcoin has been hovering around the $27,000 level for several weeks now. Remember that the upcoming Bitcoin halving in April 2024 is a significant event that a bull run has historically followed. The price of Bitcoin in this bear market is still higher than its peak in the 2017 bull market. That's a good sign of a maturing market for Bitcoin. Regulatory challenges are easing out as well. MiCA in Europe's regulatory clarity in Hong Kong, UAE and other countries has been a positive crypto push forward. Over the next few years, many more countries will come up with regulatory clarity, further helping this sector grow rapidly.
How do you envision the crypto industry's progress in the next five years, and what role will global regulations play in shaping its future?
Global regulations will play a significant role in shaping the future of the crypto industry. In the recent G20 summit, we saw IMF and FSB publish their synthesis paper. Overall, I am optimistic about the future of the crypto industry. Governments need to work with industry participants to develop fair and effective regulations. While we're seeing some rapid progress in local crypto regulations worldwide, these regulations will be effective with a global regulatory framework. Such a framework will prevent grey areas in the crypto regulatory landscape and help control bad actors in the ecosystem. India has been pushing for global crypto regulations, and we look forward to all the countries working on a worldwide framework.
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