He Yi AMA Full Text: Anti-VC and memecoin popularity indicate that the market lacks high-quality assets

Compiled by: Wu says blockchain

Recently, Binance registered users exceeded 200 million and held an AMA for this. Binance co-founder He Yi answered some questions that everyone is concerned about, including the recent counter-trading theft of coins, the contradiction of FDV's large project listing coins, and the standards for removing zombie coins. In addition, He Yi said that he would write emails to CZ every day and also need to write reading notes; his daily life is mainly fitness, making phone calls (teleconferences), and coaxing children to sleep, which is very boring. He Yi jokingly mentioned "girlfriend coins", saying that Binance is trying to see if it can bring some normal business models, and will also endure some ridicule and failures in the process.

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Does Binance have any new progress in user security that you can share recently?

He Yi:First of all, I want to say that there is no absolute security in security, and we must always be vigilant. This applies not only to exchanges, but also to our own asset security management, whether using hardware wallets or e-commerce wallets.

Binance suffered losses in the early days and has indeed invested heavily in security. Our current investment in security is a continuous process. For example, some users previously had their assets stolen because they clicked on third-party plug-ins. We have improved our risk control standards and levels in this regard.

We have implemented dual risk control in the matter of counter-trading. First, when the price fluctuates greatly, big data will capture information and alarm, and then conduct manual confirmation. At that time, we captured the price fluctuation information, but because there were many trading teams involved and the profit-making party was not single, there was no big problem with risk control judgment.

For the losses caused by users clicking on plug-ins, we understand users' expectations of us, and hope that Binance can provide them with a bottom line when they perform risky operations. We have put forward higher requirements for the security team and the risk control team, and continuously iterate our security measures.

Some users have had their assets stolen due to account sharing. We can find out the specific situation through complete user behavior log records. It is recommended that you try not to click or share suspicious links, especially videos, live broadcasts, etc. If you must click, it is recommended to put the trading account on a relatively independent and safe mobile phone, especially for users with more assets.

When downloading an APP, check whether it is an official version and avoid downloading phishing APPs. Recently, everyone is in a panic, and there are many different voices in the community, such as questioning whether the trading platform is stealing from the inside. We believe that a well-run trading platform will not have such behavior, because this is a healthy business model, and our competitors are also doing well. Such rumors will greatly damage users' trust in the entire industry. The above is a summary of the recent frequent security incidents.

How does Binance view high FDV and low circulation projects? Will it intervene in the opening price and token distribution?

He Yi: First of all, I would like to give a framework. This framework is my personal observation and understanding, and does not represent official logic or absolute standards. The blockchain industry has entered a special stage, similar to the process of technology moving from a niche market to a mass market. For example, although early technologies such as VR and 3D printing were very popular, they failed to be widely used because they failed to cross the gap from a niche market to a mass market. Tesla's success lies in the commercial application of electric vehicle technology.

In the blockchain industry, we may build a more decentralized and efficient miniature financial system. In this system, scenarios such as transactions, assets, and inflation prevention already have mature business models. However, the greater challenge is how to truly help the blockchain industry move towards mass application. Currently, there are almost no successful cases in practical scenarios such as games and social networking.

I hope that more projects with real business models can be built on the blockchain, rather than just staying at the concept of nothingness. The anti-VC wave and the popularity of memecoin reflect the problem of the lack of high-quality assets in the market. Many VCs invest in projects with high valuations, but these projects do not have good business models. Methods such as airdrops are just for data collection, while trading platforms are forced to list coins due to user demand, but in the end no one is really satisfied, and everyone suffers.

We hope that every project will have sustained growth and a good business model, but in actual operations, trading platforms cannot control project parties and market makers. We can only give guidance, such as hoping that the project party can have more airdrops to users, but we cannot intervene in pricing and execution. When we recruit projects, we hope to find teams with low valuations and good business models, and also recruit market makers. But too many requirements will cause market makers to transfer liquidity elsewhere.

The problem of high FDV has caused users and investors to suffer greatly except for a small number of project parties who have made profits. This industry is an emerging market, and the rules for issuing coins can be customized. Investors and users need to spend more time doing research and voting with their feet. We continue to iterate the standards and requirements for project parties and market makers, but this process is a process of wits and courage.

We hope that there will be more friends in the market who are willing to do solid projects, not just launch air projects. Real great success needs to withstand the challenges of human nature. I hope that this wave of bubble waves can precipitate more excellent projects and assets.

In the future, in terms of investment incubation and funding, we hope that blockchain assets can be used by more entrepreneurs, rather than just locking users in the scenarios of airdrops and trading platforms. The entire industry needs to cross the chasm.

How to maintain high passion and abundant energy?

He Yi: From personal experience, I was born in poverty and have seen the highs and lows of the world. When you see the disparity in this world, you will think about what you want to do or leave behind in this world. I might say that material heritage is your child, the continuation of your DNA. But if you have the opportunity to really change the world, why not give it a try? Leave something revolutionary like Elon Musk or Amazon. In fact, the money a person can spend in his lifetime is limited, and I am not a person who likes luxury goods. My greater passion is how to rebuild myself, break my own ceiling, and see my own growth.

I focus on self-improvement. For example, I sent a message last night saying that I slept for 6 hours and got up to work out. I did get up to work out, and was abused by the coach. The requirements for myself can be divided into several modules: the first is health. Fitness is not only a requirement for body shape, but also for health. The second is the iteration of self-cognition. I recommended a book "Lifelong Growth" on Twitter, which can push me to iterate myself. My advantage is that I can quickly internalize after reading the book and form a link with my own knowledge. The third is to leave something in this world. If I can change the world, I want to try. This is why I have been consistent and insisted on being on the front line for many years.

If you ask me if I want to retire or be lazy, of course I do. But I have a goal, which is to build a long-lasting company. This is not only a requirement for personal ability, but also a requirement for the ability to build an organization. If every executive of Binance can copy me in terms of concept, they may be more professional than me in terms of skills, such as our VIP user manager who understands finance better and the technical team who understands technology better. My goal is to build a strong and healthy and growing organization.

In this regard, my role model is Duan Yongping, who is very low-key but successful in the history of entrepreneurship in China. He founded Subor and BBK, and later BBK split into vivo, OPPO and Xiaotiancai watches. He not only started a successful business, but also achieved great success in investment, such as investing in NetEase and Pinduoduo. Duan Yongping's success proves that success can be copied. I hope that my ability to succeed can also be copied to more people, cultivate more high-potential talents for Binance, and bring good thinking methods, concepts and corporate culture to Binance.

This is what I hope to do and work hard on now. I also welcome more friends who have potential and are interested in Binance to join us.

How to select Launchpool and MegaDrop projects?

He Yi:We don’t select projects through Launchpool or MegaDrop first, but select projects first and then see if they are suitable for MegaDrop or Launchpool. Initially, we did Launchpad, but because many countries and regions have regulatory issues on token pre-sales, we changed to airdrops. For airdrops, we first launched Launchpool and found that many project parties want to obtain real users, and Binance’s coin holders are relatively more real.

Binance’s Web3 wallet has KYC, which can prove that users are real. For example, the ZK project was recently criticized because they reversed many users of the cat studio. If real users were obtained through Binance’s Web3 wallet at the beginning, the situation would be much simpler. Therefore, Launchpad, Launchpool, and MegaDrop are all solutions for project owners to find real users, while also seeking benefits for Binance users.

Sometimes we choose to list their projects because the project owners are willing to provide more airdrop shares, but this decision may not always be correct. Therefore, we constantly reflect and listen to user feedback. For example, a project with high FDV has low circulation after listing on other platforms, and it rises in the short term, but then the price falls. There is no standard answer, such as whether the circulation or deflation model is necessarily good, which needs to be evaluated based on the specific situation.

Our goal is to find high-quality projects and teams with long-term development intentions or potential for success, and then decide whether to put them on Launchpool or MegaDrop. If the project owner offers a lower share, it will be put on Launchpool; if the share offered is higher, it will be put on MegaDrop. No matter what the name is, the key is to help the project owner obtain real users while providing benefits to Binance users.

We will adjust the project selection criteria based on market feedback to ensure the health and long-term development of the market.

Does Binance have standards for removing zombie coins? How to manage and clear them?

He Yi:We regularly review the tokens that have been launched. The review is not limited to the activity on social media, but also includes the continuous development of the product, liquidity, and whether there is any major negative news. In addition, we will also conduct assessments based on the regulatory requirements of various countries and regions. If we find a token with a higher risk, we will attach a monitoring label and spend more time observing it.

Recently, our frequency of delisting has decreased, mainly because some project owners have become active again during the bull market. We have a dedicated department responsible for monitoring the projects that have been launched, including on-chain accidents, hacking incidents and user feedback. When delisting a coin, we will conduct a detailed analysis to ensure that the decision to delist the coin is accurate, rather than simply delisting the project because of poor performance.

Delisting a coin will cause harm to both the project owner and the token holder, so we try to remain objective and strictly implement the standards for listing and delisting coins. Don't think that some "shell" projects on Binance can be bought, because these projects may be delisted at any time. We firmly oppose this kind of shell buying behavior and will directly close the project once discovered.

How do you view the market value comparison with Coinbase? Where is the room for BNB to grow?

He Yi: First of all, I think Coinbase is essentially a stock security, while BNB is a token. The two are not on the same track. Coinbase shares cannot be used on the Binance platform like BNB. BNB not only has Binance's application scenarios and continuous destruction mechanism, but also has the support of BNBChain.

BNB is widely used on the Binance platform and is called the "golden shovel", which can be used to offset a large number of transaction fees. Although the current momentum of BNB Chain is not as large as the user base of some large L2, L1 ecosystems or TON, BNBChain has more real Web3 users and builders compared to developer-centric public chains such as Ethereum or Solana.

I think an important direction for BNBChain in the future is to bring blockchain technology into the lives of ordinary people and help more entrepreneurs and developers to push the entire blockchain industry into the next stage. From this perspective, Coinbase and Binance are taking completely different paths. Coinbase is an excellent trading platform that has achieved profitability through cooperation with Circle, but Binance is taking another path in the blockchain track.

Binance empowers BNB by continuously distributing benefits and airdrops during the launch of many projects. Short-term price fluctuations do not mean anything. We are more concerned about the long-term efforts and goals of the team. The co-construction of BNB Chain and the entire community requires the joint efforts of users, communities, entrepreneurs and developers.

Which tracks are you paying attention to and what do you think of AI? How do you spend your day?

He Yi: I will answer the question about AI first. In fact, I also talked about my understanding of AI in the last AMA. I think blockchain changes labor relations and distributes benefits, while AI is a huge change in productivity. For example, many trading platforms and products are multilingual environments. If AI can be used well, a lot of translation costs can be saved and efficiency can be improved. This is a specific example of productivity improvement. In the future, AI's productivity improvement will be reflected in more aspects, including design, marketing, etc., with lower costs and higher efficiency.

AI can be divided into several modules. The application side is the most common, such as OpenAI's chatbot, which can help write plans, do designs, make videos, etc. Going up is the big model team, which is small in scale but very professional. The next step is computing power, which is why Nvidia's stock performance is so strong. Nvidia's leading position in chips makes it difficult for other competitors to catch up. The advancement of technology has made the computing power increase more significant.

Energy and data are two key industries that support the development of AI. Global wars and political struggles often revolve around energy, and the future development of AI cannot be separated from the support of energy. Data is another key factor. Companies that have a large amount of user data have an advantage in the development of AI.

We are also looking for good AI solutions at Binance. For example, the Greenfield product previously launched by BNB Chain uses data through a privacy protection network to ensure user privacy. This is our attempt to combine blockchain and AI.

Regarding the choice of track, I think as a businessman, you need to pay attention to and think about various emerging tracks. No matter what track, as long as it is helpful to society and has good products and services, it is a viable business.

My daily life is actually very simple. I work out three times a week, usually get up early to work out, and then have a full day of conference calls after working out. My goal is to cultivate a team with leadership and build strong leadership throughout the industry. In addition to meetings, I spend a lot of time studying organization and management and communicating with HR leaders. Recently, I have also added the task of writing emails to CZ to report on my work and share my life. My life is simple and unpretentious. From morning to night, I work, exercise, spend time with my family and read books. This is my day.

What does Binance think about stablecoins? How will it develop in the future?

He Yi:Our logic for stablecoins is very simple. Although we cannot say that we will accept all comers, we hope that this will be a continuous competition. In the past, BUSD cooperated with third parties. For us, whether it is TUSD, FDUSD or more stablecoins in the future, we welcome cooperation. The key lies in whether the qualifications and capabilities of the partners match and whether they can reach an agreement. We are very optimistic about the stablecoin track, but to operate this well, we need the right time, right place and right people, not just setting up a stablecoin account and accepting funds.

After Binance's user base exceeded 200 million, where might the new user growth come from? First of all, it should be stated that registered users are not equal to active users. Some registered users may not have any transactions or top-up behaviors. For the market to reach a larger scale, more high-quality assets need to appear. If the industry is involuted, the reason is the lack of high-quality assets, which involves the issue of crossing the chasm. Our task and thinking is how to cross the chasm and make blockchain like the Internet or AI, so that ordinary people can use it directly. As long as the chasm is crossed, it is not a problem to increase the user base ten or twenty times.

I firmly believe that as long as there are high-quality assets in the currency circle, the market size can be expanded five times or even more. New applications and companies will appear in each cycle, and companies that persist and create value for the world will become industry leaders. Just like the leading companies after the Internet bubble, such as Apple, Amazon, Facebook, Google, etc., they continue to create value and become the world's top companies. We also hope to see such continuous growth and development in the blockchain field.

After Binance surpassed 200 million users, what plans and strategies do we have to introduce more outside forces to the industry?

He Yi:After Binance surpassed 200 million users, what plans and strategies do we have to introduce more outside forces to the industry?

In fact, Binance has been making such attempts. Whether it is from the marketing level, or through our academy, charity projects, or even in terms of project listing, we have made some attempts. We have also received some negative comments. For example, everyone knows that we signed The Weeknd before, and we later signed Cristiano Ronaldo. Cristiano Ronaldo has 600 million followers on Instagram, and his daily likes are often millions or even tens of millions. We hope that through these celebrity effects, more people will know about Binance and cryptocurrency.

In addition, we hope that when users register on Binance, they can spend time to understand cryptocurrency instead of blindly following the trend of investment. Even if you are investing in meme coins, you need to understand their nature and cycles to avoid impulsive operations. Our logic is that the projects launched on Binance are not necessarily all very high-quality projects, sometimes they are due to user demand. We will first put some projects on the contract market and let users choose to go long or short. If you are not sure about the long-term popularity of the project, put it on the contract market first, and users can choose one or two times leverage.

We have also made some mistakes. For example, the Hook project was ridiculed as a "girlfriend coin", and many people questioned that the users of this project were fake and bought. We carefully studied their users, and they are indeed not typical Crypto users, but users who get rewards by registering and completing tasks, such as motorcycles, rice cookers, etc. These users are not typical Crypto investors.

We have also recently cooperated with some Web3 projects on cross-game projects, attracting 1.3 million users, but only 56 of them became trading users because they were mainly looking for the benefits. In this process, everyone may question why we are on these projects, but we hope to find applications and business models that can change the lives of ordinary people through these attempts.

In addition, Binance Academy and charity projects are also taking on more industry responsibilities and influence. Although sometimes the investment is not always effective, at least more people have seen Binance and cryptocurrency. Signing Ronaldo may not have brought a large number of registered users and trading users, but at least more people have seen Binance.

There is a lot of negative information and prejudice in the Crypto industry, but we will still firmly push the industry forward and guide more users outside the circle to join. Even if we endure some ridicule and failure in the process, as long as the goal is clear, we will move forward firmly.

In summary, we will continue to work hard to introduce more forces outside the circle to promote the healthy development of the industry.

After the regulatory settlement in the United States, what impact will it have on Binance's development in Europe or other regions?

He Yi: After the regulatory settlement in the United States, Binance's development in Europe or other regions will be more or less affected. You may have also seen that one of our executives got into trouble in Nigeria. From a regulatory perspective, traditional finance has a history of hundreds of years, and the regulatory system has been established step by step. Therefore, when they see a new thing like Crypto, claiming to overturn traditional finance, they will naturally regard it as a flood and beast. In this case, as a leading company in the industry, we will face more pressure and challenges.

Many people think that DeFi can solve all problems, but in fact, the development of the Internet has also gone through a similar stage. Although freedom of information is important, the Internet is still observed and regulated by governments of various countries. The blockchain industry will also face similar challenges. If it is fully decentralized, regulators in various countries, especially the United States, will take strong measures to crack down on DeFi, and they will not be soft on the CeFi part. This is why CZ is still in the United States.

If we want this industry to serve 1 billion users and drive the industry forward, we must reconcile with regulators, build consensus and trust, and find a way to survive. When the industry is large enough, it must demonstrate its positive impact, how to complement the existing financial system, improve efficiency, and achieve peaceful coexistence. This is the direction we are thinking and moving in.

In this process, we will encounter some challenges, such as the possibility of not being able to provide contract trading in some regions. In addition, the size of the compliance team will become very large, and many decisions will require the approval of the compliance and legal teams. But as long as the organization itself is strong enough and the strategy is correct, these phased challenges will not affect the long-term goals. Overall, we are still seeking coexistence.

Coinbase is also very supportive of embracing regulation. We may be the first exchange in the world to actively embrace regulation, especially in the United States. In fact, competitors in the entire market such as Coinbase, OK, Huobi, Bybit, Bitget, Bitmex, etc., every company that has come to this day has gone through many cycles and there are many things we can learn. This industry is still in its early stages and we need to work together to make the pie bigger.

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