A Tale of Two Blockchains

Speaking at the ETHShanghai 2025 main forum on October 22, Xiao Feng—a prominent figure serving as Wanxiang Holdings’ Vice Chairman and HashKey Group’s Chairman and CEO—offered a clear breakdown of the blockchain landscape. He stated that the industry can be broadly divided into two distinct categories.

The first category, he explained, is exemplified by Bitcoin. Designed primarily as a currency issuance system, its strength lies in simplicity. By using straightforward mathematical formulas and avoiding complex external deployments, Bitcoin achieves rapid global consensus, solidifying its role as “digital gold.”

In contrast, Ethereum represents the second category, one built around applications. Feng noted that Ethereum has stayed true to its original whitepaper vision and now commands an estimated 60-70% of the application market share.

Why Ethereum is Difficult to Replace

Feng argued that attempts to unseat Ethereum are likely to fail. He pointed to its powerful first-mover advantage and its commitment to continuous optimization as key reasons for its enduring lead. For any competing blockchain to succeed, it must offer a fundamentally different strategic value rather than just trying to be a better version of Ethereum.

He believes the probability of any project successfully challenging Ethereum’s position is very low. Instead of competing directly, new projects should focus on proving they can provide unique, differentiated value to the ecosystem.

The Next Evolution of Decentralized Finance

While emphasizing Ethereum’s strength, Feng also highlighted the importance of Decentralized Finance (DeFi) and the need to integrate regulatory standards. He stressed that balancing innovation with Know Your Customer (KYC) and anti-money laundering requirements is crucial for the sector’s growth.

He proposed that the future of DeFi could involve Zero-Knowledge (ZK) identity solutions. This would allow users to verify their status as qualified investors by providing credentials like certificates or work experience without revealing sensitive personal data. Such a system could enable secure, compliant transactions globally, allowing DeFi to more effectively serve the broader financial system.