This article first appeared in Digital Edge, The Edge Malaysia Weekly on June 24, 2024 - June 30, 2024

The digital revolution undergoes an architectural shift every 20 years, observes Wong Thean Soon, co-founder of MyEG Services Bhd. When he started pondering the next major shift, he landed on two possibilities: The first was the decentralisation of the internet ecosystem, also known as Web3, and the other was blockchain.

When augmented, virtual and extended reality become widely accessible, blockchain will be integral as these worlds will be built on Web3 platforms. Blockchain — a decentralised ledger that records transactions securely using cryptography — allows for ownership of virtual assets to play a key role in virtual worlds, says Wong.

Wanting to be ahead of the curve, Wong established Zetrix — MyEG’s blockchain unit — a Layer 1 public blockchain infrastructure, which means it will serve as the operating system of Web3. Value will be able to be transferred freely on and across blockchains, just as information is transferred freely across the internet.

“Almost everything in our lives has been digitised. The primary use of Web3 and smart contracts is to digitise our assets. Without the use of Web3 or blockchain, it is not possible to claim ownership of digitised assets because they are just represented in bits and bytes,” says Wong.

“The distributed ledger and its associated smart contracts and zero-knowledge proof enable these bits and bytes to be stored uniquely and for the ownership of these data to be claimed without dispute.”

The internet revolutionised communication and data sharing. Now, Web3 will transform asset ownership and the storage of these assets, says Wong.

Today, Zetrix is focused on two primary applications, which are for cross-border trade and for cross-border government document verification.

A United Nations Economic Commission for Europe report titled “White paper blockchain in trade facilitation” states that blockchain has garnered attention due to its characteristics. These are the creation of data records that are permanent; the ability to identify the time and origin of every entry in a blockchain; the collaborative potential providing access to data in a blockchain to multiple participants; and the guaranteed implementation of smart contracts that automatically execute once a set of agreed conditions are met.

Facilitating trade through improved trade-­related data flows is supplemented by a layer of trust, states the white paper. These layers of trust are in the provenance and authenticity of goods, stated value of goods for the purposes of insurance, duties and payment, promises to pay, protection of goods during shipping and others.

“This layer of trust between economic operators determines which technologies are needed in order to achieve a desired level of reliability in electronic data exchanges. Where high levels of trust exist between partners, authentication methods with lower levels of control and reliability are appropriate and can be sufficiently robust,” the white paper elaborates.

All these use cases make blockchain an appealing proposition, including in Malaysia. Today, crucial facets of government operations are still confronted with a barrage of physical documents, from proof of our identity to health records and employment permits and bills, says Wong.

Web3 allows these documents to be fully digitised without the ability to forge them, he says. “That document has ownership. [It is] issued by the government, and there is no way for you to dispute the ownership of the document and there’s no way for you to forge those documents. That is the main benefit of using and offering government services on web3, so we can fully digitise it.”

Blockchain will evolve from being initially used in the digitalisation of verifiable documents and credentials followed by ownership claims on digital assets, he says.

Zetrix will be able to facilitate smart contracts. With smart contracts, human intervention is not necessary. Currently, when goods supply arrives at the destination, the buyer needs to inform the bank and the bank will then confirm that the goods have been received. Only then is the payment released to the supplier. That itself can cause delays. With smart contracts, everything can be fully automated.

MyEG works closely with Mimos Bhd on their Malaysian Blockchain Infrastructure project to provide the modules required by the government and enterprises.

Web3 and blockchain adoption presents its own set of challenges alongside the benefits it provides, says Wong. Blockchain will be able to hinder corrupt practices as everything can be traced as it will be totally transparent. Corruption would be difficult using digitised money, he says. However, there is a flipside to it. This would mean the government would be able to monitor everything, and there would be a lack of privacy. “That debate can go on forever, right? I mean, it’s just like having cameras everywhere right?”

More than two decades ago, when MyEG introduced online services, Wong shares that he regrets it having been “overly focused” on the Malaysian market and not extending its e-government services and solutions outside of the country.

This is why, with Zetrix, Wong is steadfast on aggressively targeting the international market.

“For Web3, the application we are rolling out, which is cross-border trade, by its very nature involves many more markets, many more countries and many more governments,” he says.

Zetrix is fully compatible and connects with Xinghuo, which is the national public blockchain owned by China’s Ministry of Industry and Information Technology.

“When these services need to be available outside China, Zetrix is used by foreign nationals and enterprises because Zetrix is fully compatible and connects to Xinghua, enabling data to be moved from and into China,” says Wong.

“Thus, the Xinghuo-Zetrix combined blockchain is used for China’s domestic services and accessed by foreign entities or foreign services on blockchain that is used by China entities.”

Zetrix coins are also available for purchase on Coinstore, MEXC and Bitforex. Zetrix coin is used as gas fee for any transactions on the Zetrix blockchain, just like Bitcoin is being used as gas fee for any transactions on the Bitcoin network, says Wong.

China approaches Web3 differently from its Western counterparts, he points out. “If you look at Ethereum [which is headquartered in Zug, Switzerland] and Solana [in San Francisco], these platforms are very focused on decentralised finance applications. Basically, they are replicating financial products that exist today and using blockchain to remove the financial intermediary, remove the brokers, remove the insurance companies and remove the banks. They are using blockchain as a means to remove the middlemen,” Wong says.

“The Chinese government has taken a different approach to blockchain applications. Web3 has been identified as a core technology for the Chinese government, alongside artificial intelligence (AI) and semiconductors. The applications introduced inside China are very industry-based [and] focused on increasing the efficiency and productivity of Chinese companies.”

Thanks to MyEG’s 25-year track record, it has been able to give China a head start in executing Web3 initiatives, says Wong. “Initially, the main challenge at the beginning was convincing the government of the viability of offering online services, after which the next challenge was getting users to embrace and adopt online transactions.

“My view is that the paradigm shifts in computing are very strong global forces and such services are going to be adopted by the market at some point anyway. The only question was the timeline of adoption.”

MyEG invests in start-ups that specialise in these technologies to gain a head start, says Wong.

Some of the investments it has made in start-ups include Bubi Network Technology, a leading blockchain company in China, and MAY that builds virtual worlds on blockchain.

The Bursa Malaysia-listed firm has also invested in start-ups such as Hiscene Information Technology Co Ltd, which is one of China’s biggest augmented and virtual reality companies, and Ximmerse that provides extended reality hardware and deep science which focus on developing virtual humans.

“The primary objective of our investments in start-ups is not all capital gains. Everybody wants capital gains, we do too. But when we make investment decisions, normally, capital gains is not the main focus, our main focus is to exploit access to technology. We recognise that we don’t have access to leading-edge technology and, hence, we need to invest in start-ups that are working on those technologies,” says Wong.

On this front, Zetrix and Web3 Labs Hong Kong launched the Zetrix Global Accelerator Programme to incubate promising Web3 start-ups from all over the world. The programme, which will admit 10 start-ups, will allow the chosen project to utilise the Zetrix platform to build their applications.

Wong expects blockchain to be integral in differentiating humans from AI bots, which Project Worldcoin, a project by Sam Altman, the founder of Open AI, is currently working on. “We are still very early in the blockchain technology cycle. Many silos will be built on blockchain over the next 20 years, many of which we cannot even imagine today,” says Wong.

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