During the launch of MetaEra Hong Kong Zone, MetaEra launched a series of "High-end Dialogue" interviews. We will continue to talk with industry elites and leaders to jointly explore the development and future of Web3. The person interviewed in this issue is ABCDE co-founder Du Jun.
Introduction
Du Jun is the co-founder of ABCDE Capital and Huobi Group (now acquired by Justin Sun), and the executive director and CEO of New Fire Technology. He was the product manager of Discuz!X, a well-known community platform launched by Kangsheng Chuangxiang, and has outstanding performance in investment, marketing, operations, creativity and other fields. Du Jun is also one of the earliest professional investors in the world engaged in blockchain industry investment, with rich entrepreneurial experience and industry resources.
Highlights
● Make more friends and do things that are in line with the times with your friends.
●Blockchain actually needs a killer application. I have now found a relatively good answer, which is stablecoin.
●Currently, the goal of many blockchain projects is to be listed on exchanges. This listing is the end point of many projects. This is actually completely inconsistent with traditional business logic.
●It’s not Bitcoin that needs Trump, but Trump that needs Bitcoin.
●I have been doing one thing for the past decade: telling others what Bitcoin is and how to configure and purchase Bitcoin.
●Xinhuo’s vision is to enable every enterprise to use digital assets relatively safely without having to worry about the risk of currency theft every day.
Full Interview
MetaEra: Looking back at your entrepreneurial history, some article titles are labeled "From grassroots to crypto giants", which shows that you have completed multiple transformations in your identity. Regarding the topic of "entrepreneurship", how do you accurately seize opportunities that suit you?
Du Jun: There are many versions of my early experiences online, but I think the two core points are to do things in line with the times and to make more friends. Many times, I was pushed around instead of racking my brains to think about a thing. I would observe what changes were happening in the industry and what my friends were doing.
My first job was at a software company called Kangsheng Chuangxiang, which was sold to Tencent in 2009. I worked at Tencent for three years. Around 2010, I met Li Lin and some friends. Later, in 2013, we founded Huobi. In fact, founding Huobi was a very natural thing at the time. Including the founding of ABCDE Capital in 2022, these all felt like things that happened naturally. So basically, I just followed the times, followed the circle, and then observed what changes had taken place, and at the same time I got help from many friends.
To sum up, it is to make more friends and do things that are in line with the times with friends.
MetaEra: In the cryptocurrency circle, you are also an early legend in the blockchain entrepreneurship story. When you first came into contact with digital currency, how did you view this emerging thing? After about 10 years, has your understanding of it changed?
Du Jun: Around 2012, I first heard about Bitcoin in a QQ group for heterogeneous investments. There were about 100 people in the group chat, but only 5 to 10 people actually bought Bitcoin. And I entrusted a Japanese friend to buy Bitcoin for me at Mt.Gox. In March 2013, Bitcoin soared to about $200-300. As Bitcoin was rising, I was thinking about why it was rising. If Bitcoin was mediocre, I would not study it. But as the price changed, I admired Bitcoin and started to study it. I would look for some articles about Bitcoin, and later read the Bitcoin white paper, and I felt very happy after reading it.
Because that QQ group was doing heterogeneous investments, including domain names, wine bottles, paintings, etc., and the core focus was scarcity. The first version of Bitcoin we heard was that Bitcoin would never be over-issued, and 21 million was enough to reflect its scarcity. I think there are more than 21 million domain names, and at the time they were only a few hundred yuan each. My first impression was that this thing was great.
After studying the scarcity of Bitcoin, I gradually learned about its technical route, such as whether Bitcoin can achieve double spending and Byzantine attacks, etc. I think these things are quite interesting. In April 2013, one day Li Lin asked me to have dinner with him at a restaurant in Shangdi. He asked me if I knew about Bitcoin. I said I knew and suggested that he should not buy it because the price of Bitcoin fluctuated wildly. In my mind, Li Lin was an entrepreneur at the time, so I did not recommend him to buy Bitcoin.
But Li Lin mentioned that we should build a trading platform. We should not make profits from Bitcoin, but earn transaction fees. I thought it was very interesting, so I studied Mt.Gox and Bitcoin China. At that time, Bitcoin China's daily transaction fees could reach millions of RMB. We thought that the trading platform was a good direction for entrepreneurship, so we quickly started Huobi's business, and then bought a domain name, recruited employees, decided on a name, and drew a logo.
During this process, the biggest problem we faced was how to explain Bitcoin to the market. In fact, Bitcoin did not have a strong wealth effect back then, and it was not as crazy as it is today. As CMO, I needed to acquire users and then teach them to register on Huobi and trade Bitcoin. Our main means of publicity at the time was to hold offline seminars to share with others the core value of Bitcoin, which is scarcity and anti-tampering. The effect was quite good. So within two or three months of Huobi's establishment, it achieved positive profits.
In fact, I have been doing one thing for more than ten years: telling others what Bitcoin is, how to configure and buy Bitcoin. In the process of communicating with others, I will face some frustration and pressure. For example, many people will ask: What value does your industry have for this society? In what aspects of your life will blockchain be used? This is something that I have been particularly painful and anxious about in the past two or three years, because I also have to think about what else Bitcoin can do besides being traded on the trading platform? Because if there is no good answer or solution to this problem, this industry will still face such problems ten years later, and there will still be prejudices and misunderstandings about Bitcoin and blockchain in mainstream society and mainstream media.
Today, it is easy for us to tell others what the Internet is, what mobile Internet is, and what AI is. However, before the emergence of OPEN AI, AI was also misunderstood by everyone. Everyone thought that this thing burned so much money, what can it do? In fact, the early Internet was the same. Everyone thought that this thing was useless except for sending emails. For example, mobile Internet allows us to take taxis and order takeout more conveniently. From the current perspective, the above things are very convenient to solve the problems encountered in people's lives. However, blockchain has not solved this problem to this day. It actually needs a killer application. I have now found a relatively good answer, that is, stablecoins . Stablecoins represented by USDT issued by Tether have solved some payment problems. Of course, I also believe that the usage data of stablecoins will surpass the usage data of traditional financial payment companies such as VISA.
So in this decade, stablecoins emerged, but other than that, I don’t think anything much has changed.
MetaEra: At the same time, ABCDE Capital is the focus of your current work. Can you disclose in detail the development status and investment map of ABCDE Capital? When the investment in the primary market is weak, how do you view this issue?
Du Jun: Currently, the goal of many blockchain projects is to list on exchanges. Listing is the end point of many projects. This is completely inconsistent with traditional business logic. Your business model is to go public and sell stocks, rather than to provide value to users. I think it is problematic to sell coins after listing on exchanges.
One of the things we have been worried about in recent years is how to find projects with real commercial value. You will find that although many companies are doing things in the blockchain industry, they actually do not need to issue tokens. What is the necessity of issuing tokens? For example, Bitcoin has an incentive effect on the chain, including Ethereum, which cannot operate without tokens. This is the necessity of issuing tokens, but many projects today do not have the necessity to issue tokens. Its tokens and its applications are not linked at all. It is purely a marketing tool or a means for entrepreneurial teams to realize their value.
These are some of the points that ABCDE sees, that is, how to judge these projects. ABCDE will soon announce the completion of a new round of fundraising and will continue to invest. We will maintain investing in 15 projects each year. Currently, we have invested in 30-40 projects in total, with a single investment starting from US$1 million, basically ranging from US$1 million to US$5 million.
At present, ABCDE mainly focuses on the following directions: AI and trading, in addition to application products for the general public. We also think that there is still a lot of room for improvement in current trading products, and overall we will focus on the underlying development.
MetaEra: In addition to Web3, the development of AI has also been in full swing in the past two years. Many projects have been highlighted by the two elements of Web3 and AI, but they are also in a situation of "loud noise, small action". So what do you think, how can Web3 and AI be better combined?
Du Jun: What is AI and what is Crypto? I think there are some different opinions today. Secondly, what is the necessity of combining them? The biggest problem at present is that many companies use Crypto and add AI functions, but there is really no need to combine them, and combining them will not make things better.
At present, we are paying attention to the new opportunities brought by the combination of AI and Crypto, such as Meta's Llama 3.2 model. Meta's model allows you to run it in any mobile terminal device, so in any Crypto node device, it can also use this model to perform local reasoning, which I think is quite interesting. Recently, our team is also studying the running of Ethereum nodes on small mobile terminal devices, and our product can soon be open sourced for the community to use.
Another example is World Labs, a spatial intelligence startup founded by Stanford University professor Fei-Fei Li, which announced that it has completed a huge round of financing of US$230 million. The most scarce thing in the AI field is the data set. If the process of collecting and organizing spatial data or 3D data construction can be accelerated through the Crypto mechanism, I think there is still a lot of opportunity. We are still optimistic about the industrial form generated by AI and Crypto.
MetaEra: As the executive director and CEO of Newfire Technology, which is also a listed company in Hong Kong, how does Newfire Technology welcome the new wave of Web3 in Hong Kong? At the same time, what do you think of the entrepreneurial environment of Web3 projects in Hong Kong?
In August, it was announced online that Xinhuo Technology acquired the Japanese licensed exchange BitTrade. Could you please share with us the reasons for the acquisition and what further plans you have after the acquisition?
Du Jun: First of all, as a company listed on the main board of Hong Kong, Xinhuo Technology is based in Hong Kong, and compliance is our hallmark. From a business perspective, we have obtained Class 1, 4, and 9 licenses and can provide compliant asset management services. Xinhuo Asset Management, a subsidiary of ours, has issued about a dozen funds, with an asset management scale of about US$90 million. We have in-depth cooperation with China Asset Management, Harvest, and Bosera on Ethereum ETF products. With more and more Crypto funds, our products will become more and more advanced, which is also a key development direction for the company in the next two to three years.
Second, we have our own MPC self-hosted platform SINOHOPE, which supports users’ distributed management of private key sharding and collaborative signatures by adopting MPC-CMP technology, solves the single-point risk of private keys, and effectively increases transparency and ease of use.
We believe that with the deepening of supervision and the development of the industry, crypto exchanges will gradually be split into more compliant and more segmented parts. Today's crypto exchanges will gradually be split into trading platforms, brokers, custodians, banks, insurance and issuers, rather than exchanges that combine all roles like today, which does not meet traditional regulatory requirements and users' requirements for transparency and security. Xinhuo's vision is to enable every enterprise to use digital assets relatively safely without worrying about the risk of currency theft every day.
Third, Xinhuo Technology recently announced that it intends to acquire BitTrade, a licensed exchange in Japan. BitTrade is a cryptocurrency exchange registered in Japan in 2016, mainly engaged in cryptocurrency trading business. At the same time, BitTrade is also a cryptocurrency trading operator with an FSA (Financial Services Agency) license, and holds two cryptocurrency trading compliance licenses issued by the Japanese Financial Services Agency: "Cryptocurrency Trading Industry Kanto Finance Bureau Director No. 00007" and "First Financial Product Trading Industry Kanto Finance Bureau Director (Financial Merchant) No. 3295". In addition, BitTrade has joined the three major self-regulatory associations in the crypto asset industry that are officially recognized by the Japanese Financial Services Agency. These associations have the ability to formulate and enforce Japanese cryptocurrency trading rules and standards, and can promote the introduction and development of Japan's security token system.
At present, our listed company has issued an announcement of the proposed acquisition, and the acquisition is still in progress. It is expected that the entire acquisition process will be completed in the next period of time. We plan to expand our compliance trading business in Japan and other regions next year. Xinhuo Technology plans to use this acquisition to improve the company's asset management services.
Now, we have three core products and services: exchange, custody and asset management, which can achieve synergy for our business and enhance our core competitiveness in the Asia-Pacific region.
MetaEra: You currently spend most of your time in Singapore. If we compare them horizontally, how do you view the regulatory attitudes and policies of different regions around the world towards Web3? Will you increase your presence in Hong Kong?
Du Jun: Hong Kong has always been a key location for us. Looking around the world, there are several locations that are very important. In the United States, whether in terms of technology accumulation or capital volume, it is definitely the best in the world. Like before, we only needed to focus on the western United States and set up a point in Silicon Valley, but today we find that many customers' transactions and investments are in New York, so we are recently recruiting partners in New York. So our business is divided into two places in the United States. In Silicon Valley, we pay attention to many new technologies and ideas, and in New York we will arrange transactions and investments.
In addition, Singapore, Hong Kong, and Dubai are three cities that can radiate the Chinese crypto community and the Asian crypto community. We have focused on these cities, and we also have a team of about 50 people in Tokyo. Our business in these places is somewhat different. In Singapore, we are more commercial and operational; in Hong Kong, we are more mid- and back-end, and colleagues such as legal, financial, and asset management are all in Hong Kong; in the Middle East, we just went there, and currently we are mainly focusing on commercial sales; in Tokyo, it is an independent system with a well-established team.
MetaEra: Let's talk about an impromptu topic. Regarding Trump's election as the US president, the crypto community generally has confidence and high expectations for the digital currency market and the development of Web3. For you who have experienced two or three bull and bear markets, can "this gust of wind" really influence the development trajectory of the Web3 industry?
Du Jun: From the perspective of an entrepreneur, I will pay attention to policies, because after all, you have to start a business in a physical space, so you need to know what changes and impacts the policies will have on you, and your entrepreneurial direction must be in line with the different focuses and concerns of each government.
So you have to do things in accordance with the policy and within the boundaries. You have to know where the bottom line of the law is. You can do some challenging things within the boundaries, but never cross the bottom line of the law. I don't think there is any need to put yourself in a difficult situation.
From the perspective of coin holders, I think we should do the opposite. In fact, there is no need to emphasize the value of a decentralized product every day. If a decentralized, peer-to-peer blockchain protocol places its value on a centralized entity, I think this is itself upside down. So I shared a sentence on Twitter: " It's not Bitcoin that needs Trump, but Trump that needs Bitcoin ."
