Author: arndxt Translator: Shan Ouba, Golden Finance
Policy risks are decreasing, and the willingness of builders and liquidity providers (LPs) is increasing. The focus in the Asia-Pacific region is being rebalanced.
More importantly, Japan's policy stance has shifted from "tolerance" to "competition." If Japan changes the taxation of cryptocurrencies from the punitive approximately 55% "miscellaneous income" category to a more unified approximately 20% financial tax (with the compliant corporate tax rate close to 15%), then this world's third-largest economy is clearly "bidding" to become the East Asian financial benchmark against the United States in the field of digital assets.
With friendlier public relations, visa processes, and lower employee visa costs, you can understand why exchanges are expanding their staff and why North American funds (and even people from the Tokyo Stock Exchange) are shuttling between various events.
I tend to the following trends
Japan Becomes the Compliance Center of East Asia: Closely monitor yen-denominated collateralized notes, exchange-listed crypto bonds, and LST ETFs with Japanese packaging. If the approval timeline in the United States is extended, these may become a reality.
Cross-chain bridges integrated into the network, forming exclusive traffic: A "major integration" is expected to occur: a few connectors will dominate the liquidity paths across EVM, Move, Solana, and application chains. The winning criteria will no longer be the "best lightweight client," but rather the best business expansion capabilities, the best security records, and the most default wallet users.
Wallets Essentially Become Banks: Native stablecoins (mUSD), one-click Zaps, unified balances (Gateway), embedded yield, intent-based cross-chain bridges—wallets are becoming the front-end for retail users. Protocols that can connect to this interface (risk control, custody, credit, fiat deposits and withdrawals) will win market distribution.
Market Structure Devouring MEV: Designs like DFBA (Double Flow Batch Auction) will compress "delay rent" and reward the quality and scale of bids. Builders who can construct auction-native AMMs, solver networks, and cross-domain net settlements will dominate the trading volume of the next generation of decentralized exchanges (DEXs).
Benchmarking Returns Become the "Preferential Interest Rates" of DeFi: Standardized stablecoin rates and reliable security modules will transform DeFi from "strategy roulette" into "portfolio pipelines." When CFOs can say, "Our returns are 250 basis points above the DeFi base rate, with audited risks," the potential market size (TAM) will grow exponentially.
What Has Really Changed (and Why It Matters)
1. Policies shift from resistance to support
If tax adjustments can approach the level of discussion, three flywheel effects will occur:
Company Registration Location: "Paying taxes means compliance" eliminates the gray area that many serious teams face when staying overseas.
Talent Magnet: Cities that are safe, comfortable, and have straightforward visa processes will attract senior operational talent.
**Primary Market: ** Japan provides a credible path for "MicroStrategy-style" balance sheet exposure, which will trigger structural product innovation and exchange participation.
The approval process may be delayed, but the signal is clear: welcome innovation.
2. Cross-Chain Bridge Battle = Distribution Battle
LayerZero won the governance vote of StarGate Finance; Wormhole countered with a higher cash bid. Both are vying for the rights to cross-chain liquidity routing. Mergers and acquisitions in the crypto infrastructure space are maturing: controlling the order flow means controlling fees, user experience interfaces, and developer mindshare. The moat of protocols is shifting from technology to market distribution capabilities.
Jump Crypto's Dual Flow Batch Auction (DFBA) - a parallel, millisecond-level unified clearing auction - aims to tax behavior that is "delay-driven". If adopted, the following results can be expected: tighter spreads, less "toxic flow", less "speed arbitrage", and more advantages in price quality. The ultimate conclusion is clear: DeFi will begin to execute quality like a main broker's dark pool, but without the "darkness".
4. Liquidity Staking is Accelerating
The JitoSOL ETF proposed by VanEck is the clearest signal to date that U.S. institutions wish to gain exposure to yield-generating crypto assets through traditional packaging. If regulators are comfortable with the "rebasing"/validation mechanism, the market dynamics (stakes) will change (a play on words). The downstream effect is that LST yields will become the preferred portfolio asset for registered investment advisors (RIA) and pensions, not just crypto-native funds.
5. Universality Across Virtual Machines (VM) > Tribalism of Chains
The deployment of Aave V3 on Aptos (Move language) indicates that blue-chip protocols are willing to rewrite their code to serve users in areas of demand. Circle's Gateway unifies cross-chain USDC balances in sub-second times; MetaMask's mUSD heralds the arrival of wallet-native settlement assets. User experience is trending towards a frictionless, imperceptible "chain abstract" currency.
6. Corporate Balance Sheet Re-entry
ETHZilla's treasury actions (accumulation, ATM plan, buybacks) preview a broader corporate script: holding productive crypto assets, utilizing the open market when price spreads are attractive, and communicating like a software company rather than a mining enterprise. Many imitators are expected to emerge.
7. Returns are being standardized and industrialized
Kamino Finance's USD benchmark rate and DeFi Saver's "Umbrella" staking formalize what professionals have already done: comparing the returns of different vaults with a reference rate, and then building tools for one-click strategies (Trending & Zaps). The 25% annual yield of syrupUSDC from Maple Finance and other "points + yield" models will continue, but the real adoption curve will appear when risk-adjusted returns are standardized and audited like credit.
My view on Tokyo: becoming the "mid-platform" in the crypto field
Japan does not need to become the largest high-risk market; it needs to become the most trusted one. Imagine: compliance-oriented listings, structured product launches, and regulated distribution channels delivering global liquidity to Asia-Pacific enterprises. With tax simplification and practical immigration policies, this city will become:
The first choice for founders to register companies, raise funds, and recruit senior operations personnel.
Exchanges and custodians obtain licenses and expand their business footholds.
The foundation meets with policymakers and seeks venues for public market access (such as Japanese stocks holding crypto assets, LST-linked notes, etc.).
The data from the WebX conference—approximately 12,000 participants, 80% of exhibitors from overseas, over 50% local attendees, and about 90 side events—confirms the model we were looking for before the surge in capital formation: under more favorable rules, foreign supply meets local demand.
The theories of "liquidity stacking" that caused traders to fail in 2021 are set to fail again. The drivers have changed: programmatic and cyclical capital flows—ETF subscriptions, corporate treasuries, exchange security modules, re-staking emissions, and (yes) regulated LST encapsulated products—are replacing the old heuristic rule of "increased global money supply = rising prices."
The traditional "inventory-flow model" missed the two cycles in different ways, mainly because it underestimated "who is buying," "how often they buy," and "through what channels they buy."
Today, we track: ETF net subscription volume, validator economics, exchange-secured staking (Umbrella), and corporate balance sheet policies. These factors are more decisive for marginal prices than abstract M2 charts.
So the question is no longer "Is liquidity increasing?" but rather: "Which obligated buyers are entering the market every day, and what kind of entry channels have we provided for them?"
Final Conclusion
The next stage of development will revolve around institutional-level infrastructure, who will build it, who will regulate it, and which cities will host them. This summer, Tokyo raised its hand. If tax policies can keep pace with discourse, Japan is expected to become the "central platform" for cryptocurrency: funds are converted into products here, products are converted into distribution, and distribution is converted into policy influence.
Those who adapt to this reality, focusing on the flow of obligated funds, compliant interfaces, and the construction of distribution moats, will not care about what the global liquidity charts say. They will deliver products to market demands that exist every day and do not require a bull market to exist.
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New "middle platform" in the encryption field
Author: arndxt Translator: Shan Ouba, Golden Finance
Policy risks are decreasing, and the willingness of builders and liquidity providers (LPs) is increasing. The focus in the Asia-Pacific region is being rebalanced.
More importantly, Japan's policy stance has shifted from "tolerance" to "competition." If Japan changes the taxation of cryptocurrencies from the punitive approximately 55% "miscellaneous income" category to a more unified approximately 20% financial tax (with the compliant corporate tax rate close to 15%), then this world's third-largest economy is clearly "bidding" to become the East Asian financial benchmark against the United States in the field of digital assets.
With friendlier public relations, visa processes, and lower employee visa costs, you can understand why exchanges are expanding their staff and why North American funds (and even people from the Tokyo Stock Exchange) are shuttling between various events.
I tend to the following trends
What Has Really Changed (and Why It Matters)
1. Policies shift from resistance to support
If tax adjustments can approach the level of discussion, three flywheel effects will occur:
The approval process may be delayed, but the signal is clear: welcome innovation.
2. Cross-Chain Bridge Battle = Distribution Battle
LayerZero won the governance vote of StarGate Finance; Wormhole countered with a higher cash bid. Both are vying for the rights to cross-chain liquidity routing. Mergers and acquisitions in the crypto infrastructure space are maturing: controlling the order flow means controlling fees, user experience interfaces, and developer mindshare. The moat of protocols is shifting from technology to market distribution capabilities.
3. Market structure becoming increasingly specialized
Jump Crypto's Dual Flow Batch Auction (DFBA) - a parallel, millisecond-level unified clearing auction - aims to tax behavior that is "delay-driven". If adopted, the following results can be expected: tighter spreads, less "toxic flow", less "speed arbitrage", and more advantages in price quality. The ultimate conclusion is clear: DeFi will begin to execute quality like a main broker's dark pool, but without the "darkness".
4. Liquidity Staking is Accelerating
The JitoSOL ETF proposed by VanEck is the clearest signal to date that U.S. institutions wish to gain exposure to yield-generating crypto assets through traditional packaging. If regulators are comfortable with the "rebasing"/validation mechanism, the market dynamics (stakes) will change (a play on words). The downstream effect is that LST yields will become the preferred portfolio asset for registered investment advisors (RIA) and pensions, not just crypto-native funds.
5. Universality Across Virtual Machines (VM) > Tribalism of Chains
The deployment of Aave V3 on Aptos (Move language) indicates that blue-chip protocols are willing to rewrite their code to serve users in areas of demand. Circle's Gateway unifies cross-chain USDC balances in sub-second times; MetaMask's mUSD heralds the arrival of wallet-native settlement assets. User experience is trending towards a frictionless, imperceptible "chain abstract" currency.
6. Corporate Balance Sheet Re-entry
ETHZilla's treasury actions (accumulation, ATM plan, buybacks) preview a broader corporate script: holding productive crypto assets, utilizing the open market when price spreads are attractive, and communicating like a software company rather than a mining enterprise. Many imitators are expected to emerge.
7. Returns are being standardized and industrialized
Kamino Finance's USD benchmark rate and DeFi Saver's "Umbrella" staking formalize what professionals have already done: comparing the returns of different vaults with a reference rate, and then building tools for one-click strategies (Trending & Zaps). The 25% annual yield of syrupUSDC from Maple Finance and other "points + yield" models will continue, but the real adoption curve will appear when risk-adjusted returns are standardized and audited like credit.
My view on Tokyo: becoming the "mid-platform" in the crypto field
Japan does not need to become the largest high-risk market; it needs to become the most trusted one. Imagine: compliance-oriented listings, structured product launches, and regulated distribution channels delivering global liquidity to Asia-Pacific enterprises. With tax simplification and practical immigration policies, this city will become:
The data from the WebX conference—approximately 12,000 participants, 80% of exhibitors from overseas, over 50% local attendees, and about 90 side events—confirms the model we were looking for before the surge in capital formation: under more favorable rules, foreign supply meets local demand.
Macroeconomics: Stop Blindly Worshipping Liquidity
The theories of "liquidity stacking" that caused traders to fail in 2021 are set to fail again. The drivers have changed: programmatic and cyclical capital flows—ETF subscriptions, corporate treasuries, exchange security modules, re-staking emissions, and (yes) regulated LST encapsulated products—are replacing the old heuristic rule of "increased global money supply = rising prices."
The traditional "inventory-flow model" missed the two cycles in different ways, mainly because it underestimated "who is buying," "how often they buy," and "through what channels they buy."
Today, we track: ETF net subscription volume, validator economics, exchange-secured staking (Umbrella), and corporate balance sheet policies. These factors are more decisive for marginal prices than abstract M2 charts.
So the question is no longer "Is liquidity increasing?" but rather: "Which obligated buyers are entering the market every day, and what kind of entry channels have we provided for them?"
Final Conclusion
The next stage of development will revolve around institutional-level infrastructure, who will build it, who will regulate it, and which cities will host them. This summer, Tokyo raised its hand. If tax policies can keep pace with discourse, Japan is expected to become the "central platform" for cryptocurrency: funds are converted into products here, products are converted into distribution, and distribution is converted into policy influence.
Those who adapt to this reality, focusing on the flow of obligated funds, compliant interfaces, and the construction of distribution moats, will not care about what the global liquidity charts say. They will deliver products to market demands that exist every day and do not require a bull market to exist.