MetaEra Hong Kong Special Zone is launching, and MetaEra has introduced a series of 'high-end dialogue' interviews. We will continue to converse with industry elites and leaders to explore the development and future of Web3 together. The person interviewed in this issue is Du Jun, co-founder of ABCDE.

Character introduction

Du Jun, co-founder of ABCDE Capital and Huobi Group (which has now been acquired by Sun Yuchen), is also the Executive Director and CEO of New Fire Technology. He served as the product head of the well-known community platform Discuz!X launched by Comsenz and has excelled in investment, marketing, operations, and creativity. Du Jun is also one of the earliest professional investors in the blockchain industry with rich entrepreneurial experience and industry resources.



Key insights

● Make more friends and do things that conform to the times with friends.

● Blockchain actually needs a killer application. I have now found a relatively good answer, which is stablecoins.

● Currently, many blockchain projects aim to list on exchanges; this listing is the endpoint for many projects, which is completely inconsistent with traditional business logic.

● It’s not Bitcoin that needs Trump; it’s Trump that needs Bitcoin.

● I have been doing one thing for the past decade: telling others what Bitcoin is and encouraging them to allocate and purchase Bitcoin.

● New Fire's vision is to enable every enterprise to safely use digital assets without worrying about the risk of theft.

Full interview transcript

MetaEra: Looking back at your entrepreneurial history, some article titles label you as 'from grassroots to crypto circle tycoon'. This shows that you have undergone multiple transformations in identity. How did you accurately grasp the opportunities suitable for you regarding the topic of 'entrepreneurship'?

Du Jun: Regarding my early experiences, there are many versions online, but I think the core points are to do things that conform to the times and to make more friends. Many times, I have been pushed along rather than racking my brain to think of something. I observe what changes are happening in the industry and what my friends are doing.

My first job was at a software company called Comsenz, 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, which actually felt like a natural thing to do at that time. Including the founding of ABCDE Capital in 2022, these felt like things that were easy to do. So basically, it was about conforming to the times, adapting to the circles, observing what changes were happening, and receiving the help of many friends.

In summary, it is about making more friends and doing things that conform to the times with friends.

MetaEra: In the cryptocurrency circle, you are also regarded as an early legendary figure in blockchain entrepreneurship. How did you view this emerging phenomenon when you first encountered digital currency? About ten years later, has your understanding of it changed?

Du Jun: Around 2012, I first heard the story of Bitcoin in a QQ group focused on alternative investments, which had about 100 people. In the end, only 5 to 10 people bought Bitcoin. I entrusted a Japanese friend to buy Bitcoin for me on Mt.Gox. In March 2013, Bitcoin surged to a price of about $200-300. During Bitcoin's rise, I was thinking about why it was increasing. If Bitcoin were ordinary, I wouldn't have researched it. But with the price change, I gained respect for Bitcoin and began to study it. I would look for articles on Bitcoin and later read the Bitcoin white paper, feeling very happy after finishing it.

Because the QQ group was focused on alternative investments, including domain names, wine bottles, paintings, etc., the core was scarcity. The first version we heard about Bitcoin was that Bitcoin would never exceed 21 million, which is sufficient to reflect its scarcity. I thought there were more than 21 million domain names, and at that time they were only a few hundred RMB each. My first impression was that this thing was very good.

After studying the scarcity of Bitcoin, I gradually learned about its technical route, such as whether Bitcoin can achieve double spending, Byzantine attacks, etc. I found these things quite interesting. In April 2013, one day, Li Lin invited me to dinner. We were at a restaurant in Shangdi, and he asked me if I knew about Bitcoin. I said I knew and advised him not to buy it because the price of Bitcoin fluctuated wildly. At that time, I regarded Li Lin as an entrepreneur, so I didn't recommend him to buy Bitcoin.

But Li Lin mentioned, should we create a trading platform? Instead of making profits from Bitcoin, we can earn trading fees. I found it quite interesting after hearing that, so I researched Mt.Gox and Bitcoin China. At that time, Bitcoin China could achieve millions of RMB in trading fees daily. We thought from an entrepreneurial perspective, a trading platform was a very good direction, so we quickly launched Huobi's startup, immediately buying a domain name, recruiting employees, determining a name, designing a logo, and so on.

In this process, the biggest problem we faced was how to explain Bitcoin to the market. At that time, Bitcoin did not have a strong wealth effect; it was not as crazy as it is today. As the CMO, I needed to acquire users and teach them to register on Huobi and trade Bitcoin. Our main promotional method at that time was to hold offline seminars and share the core value of Bitcoin, which is scarcity and anti-tampering. The results were quite good. So, within two to three months of Huobi's establishment, we achieved positive profit.

In fact, I have been doing one thing for the past decade: telling others what Bitcoin is and encouraging them to allocate and purchase Bitcoin. During interactions with others, I have faced some setbacks and pressures. For example, many people would ask: What kind of value does your industry really bring to society? In which aspects of your life will you use blockchain? This has been particularly painful and anxious for me in the past two to three years, because I also need to think about what Bitcoin can do besides being traded on trading platforms. If there is no good answer or solution to this question, ten years from now, this industry will still face such problems, and mainstream society and mainstream media will still harbor prejudices and misunderstandings about Bitcoin and blockchain.

Today, it is easy to tell others what the internet is, what mobile internet is, and what AI is. But before OPEN AI appeared, AI was also misunderstood by everyone. People felt that this thing burned so much money, what can it really do? Early internet was the same; people thought this thing was useless except for sending emails. For example, mobile internet makes it more convenient for us to hail a taxi or order takeout, etc. From today's perspective, all these things conveniently solve problems encountered in people's daily lives. However, blockchain has not solved this problem to date. It actually needs a killer application, and I have now found a relatively good answer, which is stablecoins. Stablecoins represented by USDT issued by Tether have resolved some payment issues. Of course, I also believe that the usage data of stablecoins will surpass that of traditional financial payment companies like VISA.

So in these ten years, stablecoins have emerged. Other than that, I don't see much significant change.

MetaEra: At the same time, as the current focus of your work, can you reveal the development status and investment landscape of ABCDE Capital in detail? Given the current weakness in the primary market, how do you view this issue?

Du Jun: Currently, many blockchain projects aim for listing on exchanges. After listing, it becomes the endpoint for many projects, which is completely inconsistent with traditional business logic. Your business model should be to go public and sell stocks, rather than to provide value to users. Listing on an exchange and then selling coins is inherently problematic.

One point we have been anxious about in recent years is how to find truly commercially valuable projects. 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 role on-chain, and Ethereum cannot operate without tokens. This is the necessity of issuing tokens. But today, many projects do not have the necessity to issue tokens; their tokens are not linked to their applications at all; they are purely a marketing tool or a means for startup teams to cash out.

This is what ABCDE has observed: how to judge these projects. ABCDE will soon announce the completion of a new round of fundraising and will continue to invest. We plan to invest in 15 projects each year, and have cumulatively invested in 30-40 projects, with a single investment starting at $1 million, basically between $1 million and $5 million.

Currently, ABCDE is mainly focused on these directions, which are AI and trading, along with moving towards consumer-oriented application products. We believe there is still significant room for improvement in trading products, and overall we will focus on underlying development.

MetaEra: In addition to Web3, AI development has also been booming in the past two years. Many projects have been tagged with both Web3 and AI elements, but they are in a situation of 'loud voices and little action.' How do you think Web3 and AI can better combine?

Du Jun: What is AI, what is Crypto, I think today there are some different views. Secondly, what is the necessity of their combination? The biggest problem currently is that many companies have added AI functions to Crypto, but they really do not need to combine. Even combined, it does not become better.

Currently, we have noticed new opportunities brought by the combination of AI and Crypto, such as Meta's Llama 3.2 model. Meta's model can run on any mobile terminal device, so it can also use this model for local inference on any Crypto node device, which I find quite interesting. Recently, our team has also been researching running Ethereum nodes on small mobile terminal devices, and we can quickly open-source this product for community use.

For example, Stanford University professor Fei-Fei Li's spatial intelligence startup World Labs announced that it has completed a massive $230 million financing. The most scarce resource in the AI field is datasets. If we can accelerate the collection and organization of spatial data or 3D data construction through Crypto mechanisms, I think there are still good opportunities. We are relatively optimistic about the industrial forms generated by AI and Crypto.

MetaEra: As the Executive Director and CEO of New Fire Technology, which is a publicly listed company in Hong Kong, how is New Fire Technology embracing the new wave of Hong Kong Web3? How do you view the entrepreneurial environment for Web3 projects settling in Hong Kong?

In August, New Fire Technology announced the acquisition of the licensed Japanese exchange BitTrade. Can you share 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 in Hong Kong, compliance is our hallmark. From a business perspective, we have obtained licenses in categories 1, 4, and 9, allowing us to provide compliant asset management services. Our subsidiary, New Fire Asset Management, has launched about a dozen funds, with an asset management scale of around $90 million. We have deep cooperation with Huaxia Fund, Harvest Fund, and Bosera Fund on Ethereum ETF products. As the number of crypto funds increases, our products will become increasingly leading. This is also a key development direction for the company in the next two to three years.

Secondly, we have our own MPC self-custody platform SINOHOPE, which supports users to manage private key shards and collaborative signatures in a distributed manner using MPC-CMP technology, effectively increasing transparency and usability while solving the single point risk of private keys.

We believe that as regulations deepen and the industry develops, crypto exchanges will gradually be split into more compliant and more segmented parts. Today’s crypto exchanges will be divided into trading platforms, brokers, custodians, banks, insurance companies, and issuers, rather than being a one-stop shop that combines all roles, which does not meet traditional regulatory requirements or users' demands for transparency and security. New Fire's vision is to enable every enterprise to safely use digital assets without worrying about the risk of theft.

Thirdly, recently, New Fire Technology announced its intention to acquire the licensed Japanese exchange BitTrade. BitTrade is a cryptocurrency exchange registered in Japan in 2016, mainly engaged in cryptocurrency trading. At the same time, BitTrade also holds the FSA (Financial Services Agency) license as a cryptocurrency trading operator, with two compliance licenses issued by the Japanese Financial Services Agency: 'Cryptocurrency Trading Business Kanto Financial Bureau No. 00007' and 'Type 1 Financial Instruments Business Kanto Financial Bureau (Securities Business) No. 3295'. In addition, BitTrade has joined three major self-regulatory associations officially recognized by the Japanese Financial Services Agency, which have the ability to formulate and enforce Japanese cryptocurrency trading rules and standards and can promote the introduction and development of Japan's securities token system.

Currently, our listed company has issued a proposed acquisition announcement, and the acquisition is still ongoing. It is expected to complete the entire acquisition process in the coming period. We plan to expand our compliant trading business in Japan and other regions next year. New Fire Technology plans to use this acquisition to improve the company's asset management services.

Now, we have three core products and services: exchanges, custody, and asset management, which can complete 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 you compare horizontally, how do you view the regulatory attitudes and policies regarding Web3 in different global regions? Will you increase your layout in Hong Kong?

Du Jun: Hong Kong has always been a key area for our layout. Looking globally, there are a few places that are very important. In the United States, whether in terms of technological accumulation or financial scale, it is certainly among the best in the world. Previously, we only needed to focus on the West Coast, setting up a point in Silicon Valley, but today we find that many clients' trading and investment activities are in New York. Therefore, we are currently recruiting partners in New York. Our business in the U.S. is divided into two locations: in Silicon Valley we focus on new technologies and ideas, and in New York we will layout trading and investment.

In addition, cities like Singapore, Hong Kong, and Dubai can radiate the Chinese cryptocurrency circle and the Asian cryptocurrency circle, and we are focusing on these layouts. We also have a team of about 50 people in Tokyo. Our business in these locations is somewhat different. In Singapore, we focus on business and operations; in Hong Kong, we focus on back-end operations, with colleagues in legal, finance, and asset management; in the Middle East, we have just arrived, primarily focusing on business 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 President of the United States, the cryptocurrency circle generally holds confidence and high expectations for digital currency trends and Web3 development. For you, who have experienced two to three cycles of bull and bear markets, can this 'wind' really sway the development trajectory of the Web3 industry?

Du Jun: From an entrepreneur's perspective, I pay attention to policies because, after all, you need to start a business in a physical space. Therefore, you need to know what changes and impacts the policies will have on you. Your entrepreneurial direction must align with the different concerns and focal points of each government.

So we need to conform to policies and operate within boundaries. You need to know where the legal bottom line is, and you can do challenging things within the boundaries. You should never cross legal boundaries; I feel there is no need to get yourself into a difficult situation.

From the perspective of holders, I think we need to approach this differently. There is no need to constantly emphasize the value of a decentralized product. A decentralized, peer-to-peer blockchain protocol should not have its value tied to a centralized entity. I think that is inherently upside down. So I shared a quote on Twitter: 'It's not Bitcoin that needs Trump; it's Trump that needs Bitcoin.'