The blockchain industry is on the cusp of a major transformation. According to Xiao Feng, Chairman of HashKey Group and a leading voice in Asia’s crypto economy, the Web3 transition to digital twin represents the next frontier in decentralized innovation. While early blockchain use cases focused on digital-native assets like Bitcoin and Ethereum, the future lies in bridging on-chain ecosystems with real-world assets (RWAs), infrastructure, and data.
From Digital Native to Digital Twin
Traditionally, blockchain was dominated by digital-native assets, cryptocurrencies and NFTs born entirely on-chain. However, Xiao Feng asserts that the Web3 transition to digital twin means blockchain will increasingly host digital replicas of real-world entities, including financial instruments, IoT devices, and supply chain records.
These digital twins will be backed by verifiable data from oracles, real-time sensors, and off-chain integrations, enhancing transparency, trust, and interoperability between traditional and decentralized finance.
Three Drivers of the Digital Twin Shift
The move toward digital twin infrastructure is propelled by three emerging pillars:
- On-Chain Data
- Decentralized oracles like Chainlink are essential in bringing real-world data onto blockchain networks. These data streams allow for verifiable price feeds, weather reports, and identity credentials.
- DePIN (Decentralized Physical Infrastructure Networks)
- Projects using DePIN principles tokenize physical infrastructure—such as smart meters, solar panels, or 5G nodes, making them tradable and programmable via smart contracts.
- Tokenization of Traditional Assets (RWA)
- Bonds, real estate, and commodities are being digitized as tokens, allowing for global liquidity, programmable finance, and enhanced compliance.
These trends signal an undeniable Web3 transition to digital twin ecosystems where digital assets mirror physical reality with increasing fidelity.
Real-World Impact and Financial Transformation
Dr. Xiao Feng envisions a financial landscape where digital twin assets enable fractional ownership of real-world items, such as carbon credits or shipping containers. Tokenized versions of fiat currencies, including stablecoins like USDT and USDC, are just the beginning. The real evolution lies in stablecoins backed by digital twins of tangible assets, ushering in a programmable, globally accessible economic infrastructure.
By enabling this, the Web3 transition to digital twin could drive the next stage of DeFi (Decentralized Finance), evolving into PayFi, a fusion of payments, finance, and real-world connectivity.
A Digital Twin Future for Web3
Xiao Feng believes the Web3 transition to digital twin marks a critical phase where blockchain tech reaches mainstream utility. Web3 is no longer limited to speculative markets. Instead, it is now poised to integrate with real-world industries. These include manufacturing, logistics, healthcare, and government services. It will do so through scalable, secure, and tokenized digital replicas.
This new paradigm empowers users to verify ownership. In addition, it allows them to manage digital identities. Users can also participate in global finance without relying on intermediaries. All of these actions are backed by real-world data and assets.
Conclusion
As Web3 continues to evolve, digital twin technology will likely serve as its foundational layer. Consequently, blockchain will move from being a digital-native playground to a real-world economic framework. Moreover, the Web3 transition to digital twin represents more than just a technological upgrade. It also signals a broader shift in how value, identity, and trust are defined in the digital age.
