Exclusive interview with OKX Global Chief Business Officer Lennix: Future boundaries and compliance of Web3 products

Interview: Tong, PANews

Written by: Weilin, PANews

In the wild territory of the on-chain world, the OKX Web3 wallet, with its powerful one-click management of multi-chain assets and unbounded experience of browsing more than a thousand DApps, has become an "on-chain compass" - lighting a friendly beacon for novices and creating an efficient tool for veteran players. Although the OKX Web3 wallet was suddenly shut down due to regulatory hammers not long ago, it quickly returned to the on-chain battlefield with a new domain name web3.okx.com, demonstrating its strong resilience and adaptability.

At this year's Web3 Carnival, PANews interviewed Lennix Lai, OKX's global chief commercial officer (CCO). This crypto pioneer who transformed from a traditional financial trader joined the OKX Web3 wallet in 2017 with a deep resonance for Bitcoin's "mathematical beauty" and led the team from a small team of 20 to a global hub of more than 500 people.

Facing the technical challenges and compliance exploration of the on-chain world, the OKX Web3 wallet continues to expand the boundaries of the wallet, upgrading it from an asset tool to a global on-chain infrastructure; in terms of user experience and ecosystem construction, they are also committed to breaking through multi-chain barriers and providing users with a simple, secure, and compliant on-chain experience. This article will take a deep look at the strategic evolution path of the OKX Web3 wallet, the cutting-edge practices of compliance exploration, the logic of shaping the globalization of the brand, and his pragmatic suggestions for practitioners and entrepreneurs from the perspective of this executive at the forefront of encryption.

From traditional financial trader to crypto executive: impressed by Bitcoin's "mathematical beauty"

Lennix is a Hong Konger with a background in financial engineering. He is currently the Global Chief Commercial Officer (CCO) of OKX, mainly responsible for strategic cooperation and global supervision. He was a trader in the traditional financial industry. Before joining OKX Web3, he worked for companies such as JP Morgan, AIG and CASH. In 2017, Lennix joined OKX Web3 and was one of the earliest core members. In 2023, Lennix was promoted to Global Chief Commercial Officer.

Recalling the motivation for entering the crypto industry, Lennix said frankly, "About seven or eight years ago, I saw the Bitcoin white paper. The mathematics were very elegant and beautiful, just two pages of A4 paper. I thought it had a great future. OKX was doing this at the time."

At that time, Lennix decided to join OKX and led the transformation of the platform from a local exchange to a global platform. Lennix said that Hong Kong and Singapore have high similarities in cultural atmosphere and talent structure. He pointed out that technical and product talents in Hong Kong and Singapore often have a solid financial background. In addition to their outstanding technical capabilities, they also have experience in financial application development, which gives them a clear advantage in building exchanges, wallets and risk control systems, showing strong adaptability to a cross-border working environment.

The next challenge is compliance

A deep understanding of traditional finance has become an important foundation for Lennix to lead the in-depth development of OKX Web3.

Lennix believes that the essence of finance has not changed from the traditional financial industry to the Web3 industry. "The essence of finance is how to make the trading tools we make better. Lower user costs, faster transactions, and concepts such as market makers. How to formulate market maker policies? The concepts in our risk control include systems such as margin, and the standards for placing orders in each risk control. We can apply some of the experience in the financial market over the past 100 years. That's why there are so many people working in finance in the Web3 industry, because they are born to understand these most basic financial concepts, and they can be logically and easily matched. Therefore, many of the product managers and risk control managers in our team come from large banks."

In his opinion, FinTech in the traditional financial field focuses more on digitizing the existing service system, while the development path of Web3 is closer to the "TechFin" model, which is driven by technology and then loads finance as an application layer on the blockchain infrastructure. This architecture may also be extended to non-financial fields in the future, but at the current stage, finance is still the most active direction in Web3 applications.

Lennix pointed out that the essence of blockchain is low-cost, verifiable transfer and public ledger, which makes it naturally suitable for financial scenarios. Blockchain technology has brought a qualitative leap to the underlying structure of finance, breaking down regional and trust barriers and accelerating the process of globalization. Therefore, financial applications are very easy to fit blockchain. Often, if you go further, there will be more areas for financial applications, and finally these financial applications will serve Web2 enterprises, such as Social, Gaming, etc.

He emphasized that OKX Web3 is currently focusing on the decentralized application (DApp) ecosystem, which is mainly based on finance. "We are a wallet, but also a multi-chain trading system. We have different multi-chains behind us, and what we need to solve is to provide users with one-stop Web3 access services. What else should we do? At the same time, we are also solving the low-cost problem of multi-chain asset transfers. This technical field is very deep. The next focus is how to achieve compliance in self-hosted wallets? This is the barrier we will challenge next."

From self-hosting tools to multi-chain ecology, products are the core gene

In terms of product vision, the OKX Web3 team has established two core directions: one is to establish a simple and easy-to-use self-hosted wallet solution, and the other is to promote the interactive experience in the multi-chain world.

Lennix believes that OKX Web3 is like a self-hosted future. The team's primary goal is to create a self-hosted wallet tool that allows everyone to easily manage virtual assets; secondly, to build an open system that is compatible with a multi-chain ecosystem. In his opinion, a single public chain is unlikely to carry all future applications, and the real trend of Web3 will be the coexistence of multiple chains. However, the multi-chain ecosystem also brings problems such as complex user experience, high transfer costs, and high operational risks.

Therefore, OKX Web3 hopes to become the key entry point for users to enter the Web3 world, optimize the user experience through continuous product innovation, and ultimately allow users to enjoy convenience and smoothness similar to Web2 when completing transactions, transfers and other operations in self-hosted wallets.

He further stated, “This is our most important product strategy at present. When the experience problem is solved, the next stage of the strategy will gradually expand from pure on-chain asset tools to compliance, bank channels, legal currency, etc. In addition, we need to find ways to discover various hot spots and emerging applications that may arise on the chain, and we have enough sensitivity to support the development of the ecosystem.”

He emphasized that products are the core gene of OKX Web3 and the most recognizable DNA of the team. The team is extremely focused on identifying and solving user pain points. "There are definitely many innovations in the market, and they themselves don't know whether they will succeed or not. So we will make the experience the best and finally leave it to the ecosystem."

The user groups of DEX and CEX are gradually differentiating, aiming to upgrade to compliant infrastructure

As Web3 infrastructure continues to improve, users' demand for decentralized trading experience is increasing. In 2024, the number of OKX Web3 wallet app downloads increased by more than 100%, reaching 122%; global user growth was about 9 times; and the daily trading volume of OKX DEX increased by 20 times.

Lennix also shared his views on the competition between CEX and DEX. He pointed out that there are two key driving forces behind the market's incremental shift from CEX to DEX. "One driving force is definitely that the development on the chain will be faster and there will be more interesting things. At the same time, the second driving force is that we continue to optimize the user experience on OKX Web3, which greatly reduces the threshold for users to migrate from CEX to DEX, so we have accelerated the process. I think this is what I am proud of for this team."

Lennix holds a relatively neutral view on the discussion in the market about whether DEX trading volume will surpass CEX in all aspects. He believes that although DEX trading volume is expected to exceed CEX in the future, the user groups served by the two will gradually differentiate, carrying different roles and functions. CEX is more stringent in asset screening and supervision, and is closer to the "main board" role in the traditional financial system. After passing multiple rounds of approval and compliance review, high-quality assets can be traded online on CEX, so it is more suitable for large funds and traditional institutions to directly participate in legal currency. In contrast, the decentralized trading environment on the chain has a higher degree of freedom, not only limited to Tokens, but may also carry various innovative applications. With the precipitation of time and the verification of the market, some of the high-quality projects will eventually be screened and transferred to the CEX platform for trading.

“So the transaction volume of DEX may be higher, but we are more concerned about whether we can serve different groups of people at the same time: institutions, financial institutions, and social security funds in the future. There is still a lot of technical space in the middle to complete the bridge and conversion between the two.”

Lennix further introduced when reviewing the early days of OKX Web3 wallet, the team did not plan to launch a wallet product in the early days, and the initial direction was to build on-chain analysis tools. But more than three years ago, the team gradually realized that wallets as the "entrance" to the on-chain world would become a key strategic direction, so they concentrated their resources on this field. Even though there was no clear business return model set at the beginning, the team still insisted on developing the product as a pure tool, focusing on technical implementation and user experience.

Currently, the OKX Web3 wallet team has 300 to 500 people. Lennix compared this experience to the process of "Taobao doing Alibaba Cloud" - at first glance, it has little to do with the main business, but it contains platform-level innovation potential.

"We went through a lot of twists and turns when we were looking for the second growth curve. It was the same feeling as when Taobao suddenly wanted to do Alibaba Cloud. This is a completely different field. It was not good for the main business at the beginning. This pure investment did not expect that this business model would feed back to the main business in any way. But this innovation will only be discovered after it is done, and then we will think about how to coordinate. Another point is that we must follow the market. Wherever the market wants you to go, we respect the trend and go with the flow. We cannot predict the next round of trends, but as long as we know that users are going in that direction, we will firmly make tools and products."

As the number of Web3 users continues to grow, OKX Web3 is also thinking about how to promote the development of on-chain infrastructure at a deeper level. Lennix said that the OKX Web3 team is redefining the boundaries and roles of "wallets", no longer just seeing them as a tool for asset storage and transfer, but upgrading them to compliant infrastructure in the on-chain world. He pointed out that as the crypto ecosystem continues to expand, data security, KYC and anti-money laundering issues involved in on-chain transactions are becoming increasingly prominent, and these issues urgently need to be resolved under a self-custodial architecture.

“For example, there are hackers on the chain now, and there are methods to illegally transfer money and launder money. Do we have a way to mark the hacker address? For example, with the help of AI data analysis, can we block these suspicious addresses at a faster speed, in less than a second, or even at the second level? For the rapid determination of a hacked address, this is the direction we want to think about in the future.”

Self-custody regulatory challenges behind suspension of DEX aggregation services

Not long ago, the OKX Web3 wallet experienced a small turmoil and suspended its DEX aggregation service due to MiCA regulatory requirements.

In this regard, Lennix said, "We are explaining. The concept of self-custody is a completely new concept for regulation, so our team needs some time. This requires a process, just like when we established the exchange, it also took several years to discuss in depth with regulators what the exchange is and how it works. We are very happy to do this because it is also something we can do and it is not a big problem. We separated the exchange and the wallet app, and at the same time told the EU regulators that this is a completely self-custodial wallet, and under this premise, we can comply with regulations and meet the regulatory expectations of us. Although regulators may not have a regulatory law for Web3 wallets now, they definitely have expectations for some large-scale participation, compliance, and licensing. Our expectation is to make better tools to meet regulatory needs."

Lennix admitted that the OKX Web3 wallet has explored a path at the forefront of the industry and provided a reference for many other peer institutions. "We don't have a ready-made playbook to copy, and we have no way to face this situation. Frankly speaking, although there are tools on the market, including on-chain asset management tools and hacked address identification, they are not efficient enough and have insufficient technical foundation to meet regulatory expectations. So we may have to develop and establish our own on-chain KYC standard system. These are unprecedented for us, and they are all areas of crisis and challenges."

A marketing philosophy that fits the brand’s DNA

In addition to continuing to advance in compliance layout, OKX is also at the forefront of the industry in brand marketing. Lennix said that the team performed particularly well in marketing and reached a series of high-quality cooperation including the Shanghai F1 race.

When talking about OKX's philosophy in marketing cooperation, Lennix said that he is more like a "gatekeeper" and that truly excellent execution comes from the entire marketing team. He emphasized that when OKX chooses partners, it does not only pursue exposure, but also pays more attention to the consistency of brand tone.

"First of all, we hope to have a brand sponsorship that can enhance the brand tone of the OKX Web3 wallet itself, but at the same time, we have to choose an industry. This industry is preferably a sport, preferably a global one with a large mass base, and at the same time, it is mainly technology-based, which is consistent with our brand tone of pursuing innovation. Finally, we found McLaren and Manchester City. They are very compatible with us in terms of company management, team management and pursuit of perfection. For example, we pursue a response speed of tens or hundreds of milliseconds in the exchange field, and they also mention a time unit of '300 milliseconds' in their racing data transmission. Because for them, 500 milliseconds can determine an overtaking or an accident. This ultimate pursuit of efficiency and precision is actually exactly the same as our technical culture. So we think we have found a very good partner, a very long-term and genetically compatible partner. Our language is connected and our values are consistent."

Practitioners need to understand products and users. Bitcoin is unlikely to explode strongly in the short term.

At the end of the interview, Lennix also gave his own experience and suggestions to the new generation of Web3 practitioners. He said that young BDs born after 2000 should break away from the inertia of "only attending meetings and building connections" and have a deeper understanding of product logic, user pain points and industry challenges. He emphasized that BD is not only an executor of market expansion, but also a bridge connecting users, products and markets. BD can only play a real role by talking with users, collecting feedback, and passing valuable opinions to the product team. The core that supports all this is still professionalism - a deep understanding of industry, product, and technology trends is the strongest moat for young BDs.

For Web3 entrepreneurs, Lennix suggested abandoning the traditional thinking of "issuing coins means the project" and focusing on product construction in the bear market. He emphasized that the current entrepreneurial logic is different from the past, and what is truly valuable is the products that are implemented and recognized by users. Compared with infrastructure, what is more worthy of attention at present is the innovation of the actual application layer, especially the exploration of real financial directions such as on-chain compliance, on-chain identity authentication (KYC) and stablecoins.

In addition, when talking about the macro market environment, Lennix pointed out that the current crypto market is still dominated by Bitcoin, and its market share continues to rise, which is highly correlated with the US macro policy. Due to multiple uncertainties such as tariff policies, interest rate changes and inflation expectations, market volatility has increased significantly. He believes that Bitcoin is unlikely to have a strong outbreak in the short term, and traders should maintain a defensive posture and pay attention to the progress of tariff negotiations and key economic data, such as CPI, as signals of market trends.

Disclaimer:

This article is for informational purposes only. This article is not intended to provide (i) investment advice or investment recommendations, (ii) an offer, solicitation or inducement to buy, sell or hold digital assets, or (iii) financial, accounting, legal or tax advice. Digital assets (including stablecoins and NFTs) are subject to market volatility, involve high risks, and may lose value. Please consult your legal/tax/investment professionals for questions about whether trading or holding digital assets is suitable for you. OKX Web3 Wallet is only a self-hosted wallet software service that allows you to discover and interact with third-party platforms. OKX Web3 Wallet has no control over the services of such third-party platforms and is not responsible for them. Not all products are available in all regions. Please be responsible for understanding and complying with applicable local laws and regulations. OKX Web3 Wallet and its related services are not provided by OKX Exchange and are subject to the OKX Web3 Ecosystem Terms of Service.