Dialogue He Yi: What are the standards for Binance investment and currency listing?

This article is a shorthand transcript of an interview on July 12. It has been slightly edited and GPT processed, and may contain many errors.

You joined OK in 2014 and founded Binance in 2017. 10 years have passed. How do you feel about it?

He Yi: The most impressive thing for me may be that I just entered the industry, because the price of Bitcoin rose in 2013, and then rose to more than 1,000 US dollars. At that time, I felt that it was very exciting, and it was the first time that I was optimistic about my life. With reflection, I have always said that why I joined this industry and gave up the job opportunities at the time, such as at Travel TV, was it because I felt that for the first time, something made me think about my life in a new way. , that is, what is money? Because our parents have always told us that money is very important since we were young. I think the price of Bitcoin rose to more than 1,000 US dollars in 2013, which gave me a big stimulus at that time. What is money? What you thought was money before may not be money itself, so this incident directly made me choose to enter the currency circle.

After joining the currency circle, the most exciting thing was probably that I had just officially announced my joining, and then Mentougou closed down, and I felt like it was a disaster. There are some big drops in the currency circle today, but they are nothing compared to the 14-year history. One day, Bitcoin should have dropped below almost 100 US dollars. In an instant, you are sitting in front of the screen and watching the price drop. At that time, the liquidity was not that strong, and everyone was selling when it was selling. You really just saw the price falling one by one.

At that time in 2014, there were still no heroes, which made Zhuzi famous, because I often laughed at us in internal meetings and said that our recruitment should be more diverse, because I said that if it were an interview here today, with my background, and I can't get an offer based on my resume, so I think in 10 years, if a person with the same background comes for a graduation interview, he will definitely not get an offer, because we will tell you whether your English is good or not. What an achievement, right? That means he will be very professional. You would think that 10 years ago, people really saw us as a bunch of MLMs, but 10 years later, we feel that this industry is still a positive stimulus and cycle, regardless of talents and possibilities.

Who was the most famous person in the industry at that time in 2014? What I remember is grilled cat and long hair. At that time, all altcoins were altcoins, really all altcoins except Bitcoin, so everyone was fundamentalist. What is more obvious is that there has been a big change in 2017. The emergence of Ethereum itself has given rise to some concepts such as financialization, pan-financialization or micro-finance that were discussed in vain in the past. . In 2017, everyone will feel that if there is an opportunity to start a business here, such a company will be born.

I think the current so-called bull market is not driven by innovation, nor is it driven by huge changes in the industry. It is actually driven by independent events such as ETFs. So I think if you make a summary of the entire history of the currency circle or what real innovations there are at each stage and have a positive impact on the industry, I think there is still a lot to be gained. At least I personally feel that in the end it will be Innovation is driving this industry forward.

What are the most important criteria for Binance investment? Which track are you personally interested in? He Yi: I can roughly align my understanding of investment with everyone. I think that relatively speaking, these project developers in Asia will still suffer a bit, because after all, there are still some in North America. Some relatively typical venture capital companies, such as a16z, are quite focused on making large investments in the blockchain industry.

But for investors and companies in Asia, there will actually be a huge embarrassment. Maybe these funds in Asia don’t want to invest in Asian companies. This is a bit of a look down on themselves. I think it is still difficult.

You can understand our investment as we hope to spread the pepper. You can ultimately understand how far this industry can go in the end. In fact, it is still driven by innovation. To bridge the gap, we must have real innovation-driven, blockchain Technology can be popularized and used by more ordinary people. I don’t know who will succeed in the end, but we will support as many people as possible. To be honest, the projects we have invested in may exceed 2,000, not 2,000, and 1,000 will definitely be Yes, but to be honest, I haven’t talked about most of the projects, nor have I communicated with them, but I think investment basically depends on a few framework things:

The first one is that I think the founders themselves Does he have a long-term perspective? Do you believe in this industry, right? You will find that in the end, if he works hard in this industry and then runs away, and his villa depends on sea shuttle, there is actually no difference between him and this gambler. In fact, even if he succeeds, he will sell his coins and run away in the end. So I think we still need to be long-term and have confidence in the industry.

The second thing I think is very important is his skills. What have you done, right? Does each person’s capability model, including your team’s model, complement each other? The third thing I think is actually its thinking structure. You can understand it as whether it is a state that can continue to iterate. You will find that in fact, many people are very able to toss in the end. Even if their starting point is a little lower, they can keep iterating. In fact, you probably have a judgment during the conversation with them. I think if the basics are passable and the fundamentals are okay, we are still willing to invest some money to cultivate them. We cannot pursue the so-called 100% success rate, because the essence of this thing does not exist. Look at the traditional For a VC, 9 out of 10 projects he may have invested in have died, and it is very common for only 1 to be successful. So I don’t think I should invest in this matter. I still hope that more innovators can come out in this industry. I can continue to build confidence for everyone in the long night, whether it is the long night of everyone's current mood, or the long night before this technology has made a very big leap, but in the end if you do not support others, you will eventually I am just a lone traveler. If I am the only one on this road, I don’t think this can become an industry, right?

I don’t evaluate projects very much, but I personally think that the next thing that may have a huge impact on human society is AI. I still spend a lot of time studying this matter, but I don’t necessarily say that we have invested in anything. Yes, but I think you need to know the direction of the tide.

Is there a rat position on Binance? What are the standards for currency listing? He Yi: When we often discuss Rat Cang, everyone knows that if certain tokens are widely publicized and will be listed on a certain exchange, then this project will not be listed on Binance. However, from last year to this year, there were not many high-quality and popular projects on the market, which made the work of our currency listing team awkward. We have not yet contacted some project parties, but rumors of currency listing have spread, and some people will even use such rumors to exert pressure. If the project side does not accept their conditions, they will spread rumors about the coin listing. If we don't choose this project, we are sometimes accused of being a rat warehouse.

We have strict standards and processes before listing. We will screen projects and conduct internal audits in each cycle. If someone strongly opposes a project, it won't pass muster. We try to minimize the time difference between the decision to list the currency and the final launch to eliminate rumors of rat warehouses. The decision to list the currency is not made by one person, but through a multi-level evaluation process to ensure the technical foundation, market potential and investment endorsement of the project. Binance’s currency listing standards mainly include the following points: Technical and market foundation: whether the project has a solid technical foundation and market potential. Popularity and attention: The popularity of the project in the market and user attention. Investment endorsement: Whether the project is supported by reliable investment institutions to ensure that it will not run away easily. Project life cycle: Whether the project life cycle is long enough and whether it has the potential for sustainable development. We will put all projects that meet these criteria into a large pool for observation and evaluation.

One of the main challenges we face is users’ psychological expectations. Many users in the currency circle expect returns of hundreds or thousands of times, while traditional investors are already very satisfied with annual returns of 20%-30%. As competition intensifies, opportunities for high returns will become increasingly rare. We need users to understand the development and changes of the industry and adjust their expectations.

In terms of currency selection, if the project has VC investment, users will think that the VC is cutting leeks; if the project is weak, users will think that Binance has listed a junk project. Therefore, no matter which project you take on, there will always be dissatisfied users. We hope to provide projects that are in demand, popular and relatively reliable in the market, but this does not mean that all projects will rise. We also hope that users can understand market fluctuations and cycles. As competition in the industry intensifies, there are fewer and fewer opportunities for returns of hundreds and thousands of times with high information gaps. The entire industry, whether it is the primary market or the secondary market, is becoming more and more competitive. We hope users can understand that in such an environment, it is not easy to find projects that can bring high returns in the long term. Ultimately, we need users to understand and accept reality and adjust expectations to better profit from this rapidly evolving industry.

Question about the number of coins listed on Binance: When Binance lists coins very quickly, is this a fact or an opinion? In fact, we can speak with statistics. From last year to this year, Binance only launched more than thirty currencies. For exchanges with greater market share growth, the number of listed currencies starts at more than 100. If Binance should list fewer coins, or even only keep Bitcoin, whether this view is reasonable is worth exploring.

If you think that more than 30 coins are listed on Binance, how do you explain the hundreds of other coins listed on Binance? In fact, this is a matter of opinion and fact, which requires objective data and analysis to prove.

The second part involves stakeholder and regulatory issues. Is this true when most of the coins we list have a stake in Binance? In fact, Binance has very limited investments in most coins, with some holdings as low as 0.1%. Other trading platforms may be more involved in interest-related projects. Therefore, it is believed that Binance has interests related to the listed currencies and requires effective argumentation.

Everyone hopes that all coins on Binance will rise, but this is unrealistic. There is no guarantee that any investment market will only rise but not fall. The fundamental function of Binance is to provide popular and popular projects on the market, but it also hopes to screen out those projects that are at risk of running away and screen out projects with potential.

Binance’s future business focus and direction?

He Yi: The essence of crossing the chasm is to better apply technology to current industries. We are investing more in more companies, hoping that more innovation will emerge in the industry. For Binance, we are a platform that allows more users to enter the industry. For example, we added new businesses last year, such as Plaza. The function of the square is to allow users who are not very interested in the currency circle to come in and take a look at it at any time, and gradually understand the currency circle and its investment.

Another aspect is that we have tried the stablecoin business, but ultimately failed due to regulatory costs and threshold issues. In addition, since last year, everyone has paid more attention to the Web3 wallet. Friendly merchants perform well in external storage wallets, but everyone has different understandings of Web3 wallets. Many peers regard it as an alternative plan (Plan B) for exchanges. When exchange business is affected by regulation, they can continue to trade through wallets without the need for KYC and anti-money laundering. However, we believe that Web3 wallet Plan B still cannot avoid supervision. Therefore, we hope to use Web3 wallet as a long-tail business to cover on-chain services that existing exchange users cannot involve, such as staking and on-chain transactions.

Although we are currently not doing a good job in Web3 wallet products, we still want to improve the user experience, especially Web3 wallets with KYC requirements. The future focus and direction is still to solve compliance issues on a global scale. As the industry develops and the global focus on the crypto industry increases, Binance must assume compliance responsibilities, including issues such as regulatory communication, trust building, and anti-money laundering among various countries.

I think if the industry can establish an effective reconciliation channel with the government, it will be possible to become part of the Internet. But if it goes against the government, it may become a darknet. Therefore, we hope to become an Internet industry that serves more people. There is no truly huge innovation happening in the current bull market. For example, in the last cycle everyone discussed that Ethereum was too expensive and could not support large-scale applications. But now, whether it is speed or cost, these are no longer bottlenecks. The real problem is that there are not enough effective assets.

What difficulties/desperate situations has Binance been in? How to get out? What crises will arise in the future? He Yi: Binance does not disclose the market capitalization, which may be confusing, but we do have over 200 million registered users, although not as many active users. Regarding the market value of BNB, I think it is a relative value. I don’t pay much attention to the market value myself, mainly because of its cyclical fluctuations. Ups and downs occur naturally. As long as you do things well, the results will be good. I have always believed that as long as we manage the present moment every day, we can achieve good results.

From the first day of Binance’s launch, there have been infinite crises and dilemmas at every step. For example, BNB once fell 50% on the first day of listing, which may be the biggest dilemma for CZ. We have also faced situations where Amazon Cloud was down and infrastructure and domain names were cancelled. Therefore, our philosophy is to solve problems when we encounter them and manage every day well. If you insist on doing the right things, you will naturally get positive rewards.

Since childhood, we have had a concept called "if you are poor, you can benefit yourself, and if you are prosperous, you can help the world". But I think there is a flaw in this logic: when is success? My understanding is that as long as what you do is positive for the world, can reduce costs, improve efficiency, and help users have a better experience, you are changing the world. It doesn’t have to be like Elon Musk launching a rocket, and it doesn’t have to be like Tesla. But if what you do has a positive impact on the world, the company will naturally become bigger and stronger.

In the process of development, you will naturally encounter different challenges, such as regulatory pressure or talent development challenges. The company is developing rapidly, but its talent training system may not be perfect. These are problems that need to be solved naturally. I have always maintained a positive attitude and did not feel that I was at the end of my rope when faced with difficulties. Life is a wilderness, just take every step carefully.

I used to run 1500 meters in middle-distance running when I was in school. Every moment in life is a challenge, but as long as you push yourself a little more, you will find that you are constantly growing.

He Yi: I think I am a person with a very sense of crisis. Looking at the entire industry, the biggest crisis is of course the regulatory crisis, and this is not just for Binance. Although we have just passed a hurdle on this front, regulation will always be an important challenge. The second crisis is industry competition and innovation crisis. At this stage, the competition between exchanges is parallel. The core skills of each exchange are not very different. We are also constantly learning from others and making continuous improvements. The bigger crisis actually comes from unknown uncertainty and innovation. So we encourage continuous trying of new things both from an investment perspective and from an internal employee perspective. If any colleagues want to start innovative business or have entrepreneurial ideas, we are very supportive.

In essence, all threats do not come purely from known competitors, but from environmental uncertainty and new innovations. If new innovations appear and you are unaware of them, that is the biggest crisis. It's like the mobile phone giants didn't realize what the emergence of smartphone screens meant to them.

The entire industry has developed to this day, and it is difficult to exist as a niche startup company like in the past. Effective communication with regulators and policymakers now needs to be established. What I personally spend more time focusing on is how to transform a startup company supported by the founder's charisma and ability into an evergreen company. This requires improvement of organizational capabilities. If the organizational ability is strong enough, good seed players can be continuously cultivated.

What do you think of MEME?

He Yi: When half of the top ten coins by trading volume are MEME, what will happen if we don’t list these coins? Users and transaction volume will flow to other platforms. So many times we have no choice. Other trading platforms will also list these currencies, and there are even third parties to choose from. This is not to say that the entire industry is working for Binance, but we must make a compromise to maximize our value and fundamentals as much as possible.

This phenomenon is not unique in different market cycles. In 2014, everyone thought that except for Bitcoin, everything else was garbage. In 2017, everyone also felt that all the hype in the market were junk projects, and people had a strong speculative mentality. This kind of emotional fluctuations will appear in every cycle, just because the market size has expanded a lot this time, many new players have entered, and the emotional expression is more direct and reflected on the Internet.

In the past, the industry was dominated by a few experts who had many years of experience in technology. They gained influence in the market and everyone followed them to invest. If they make a profit, people will trust their technology more. This round, with the emergence of some user-end products, people began to follow a new wave of influential figures to speculate, and market sentiment was still very volatile.

Whether it is the traditional financial market or the current market, it is indeed very affected by emotions. But this does not negate the significance of seriously building products and building business models. The craze and emotional fluctuations in each market will have an impact on the mentality of users, investors and entrepreneurs.

I often emphasize the "unity of knowledge and action" with my team members. This is not because my name is He Yi, but because I have a deep understanding of this. Stick to whatever you believe in. Only by insisting repeatedly will the results appear. Just like we have known since childhood that our academic performance will not be bad. If we want to lose weight and have a good body, we must keep our mouth shut and move forward. But in practice, it is difficult to do it because there are many temptations from the outside world.

The same is true for the entrepreneurship and investment market. When you persist in your ideals and innovations, others may laugh at you. But if you look back, when Binance launched BNB in ​​2017, a lot of people were laughing at us. At that time, some people said that the trading platform was not worthy of issuing coins. But facts have proven that it makes sense to insist on innovation and effective products. We know that the industry needs product innovation and technological innovation, and products that truly have users and applications. Although this is difficult, this is the direction we should stick to.

Personal future development direction

He Yi: I never thought that I would find something that I was interested in investing in outside of the crypto industry. My personal personality traits may stem from my previous educational background and experience as a teacher, I enjoy helping others succeed. I always believe that I can only achieve my own success by helping more people succeed. If I were not in the crypto industry, it would be hard for me to imagine anything else worthy of my time and energy. I might just return to the investment field and export effective thinking patterns.

Although I don’t choose to return to education, this is considered a passive choice. But that doesn’t mean I can’t do anything, I’ll still look for things that can help the world. I think Kunbes's choice is understandable. Looking at the speed of AI development, it is indeed smarter than humans. The logical input and output of human thinking is relatively predictable, but it is also error-prone because the gap between knowledge and action is large. Throughout human history, it is normal for people with financial freedom to pursue immortality or enjoy quality of life, but this does not mean that people who leave the industry cannot be trusted, nor does it mean that others do not have opportunities. In fact, some people's departure may create more opportunities for others.

何度も強調してきましたが、2017年から私はただビジネスを始めるだけではなく、歴史を作っていくのです。私は業界に入った初日から、ブロックチェーンが世界に革命的な変化と無限の可能性をもたらすと強く信じていました。そう信じているからこそ、全力で取り組んでいきます。これは、なぜ私が IPO の準備中に前の会社を辞めることを選んだのか、また 1994 年に毅然として辞めた理由も説明しています。なぜなら、ブロックチェーン技術がもたらす可能性のある時代の変化を目の当たりにしたからです。私はこれが私の使命であると考えており、それに全力で取り組んでいます。もっと優れた起業家や才能のある人たちと協力していきたいと思っています。なぜなら、信仰は火花であり、信じることによってのみ、より多くの可能性を見ることができるからです。自分自身が信じていなければ、これらのことはできません。

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