“From the first day of founding Binance, I said that we are not starting a business, we are making history.”
Written by Zhou Zhou, Foresight News
This is He Yi’s tenth year in the cryptocurrency industry and the seventh year of Binance, which she co-founded with CZ.
This year, Binance struggled but eventually successfully emerged from the quagmire of strict US regulation. Binance's registered users reached 210 million, Binance's user assets reached 100 billion US dollars, and BNB's market value once reached nearly 100 billion US dollars. Looking back on the past ten years in the crypto industry, He Yi shared many of her experiences and insights, including her investment philosophy, coin listing values and industry vision.
He Yi talked about the real reason why he entered the cryptocurrency circle in the first place. "In 2013, the price of Bitcoin rose to over 1,000 US dollars, which gave me a great stimulus at the time. (It made me think) what money is and whether the money we think of is money itself. This is the real reason why I entered the cryptocurrency circle."
He Yi also talked about who she thought were the celebrities in the crypto industry when she first entered the cryptocurrency circle. "When I first entered the industry, the most popular (crypto celebrities) were Kaomao, Changjian, etc." Now He Yi herself has become one of the most popular people in the minds of many new entrants to the crypto industry.
Over the past seven years, Binance has encountered many difficulties and setbacks. He Yi shared some of the major difficulties she and Binance have faced and how to deal with them. "Since the first day of Binance's launch, every step has faced endless crises and difficulties. On the first day of Binance's launch, BNB fell 50%. That was the biggest difficult moment CZ faced at the time. If there was no settlement (with US regulators); Amazon Cloud was shut down; APP was shut down from Google, these were also huge difficulties. For us, we just need to solve the problems when we encounter them."
She also expressed her own views and opinions on this round of bull market. "From 2021 to now 2024, this so-called bull market is not driven by innovation, but is actually driven by independent events such as ETFs... Personally, I think that innovation will ultimately drive this industry forward."
On the evening of July 12, Binance co-founder He Yi was interviewed by Chinese blockchain media (Foresight News, Wu Shuo, Shenchao, Odaily). The following are He Yi’s answers to reporters’ questions.
He Yi, Co-founder of Binance
Ten Years of Encryption
Reporter: You joined OKC in 2014 and founded Binance in 2017. Looking back on history, it has been 10 years. Is there anything that is most impressive or interesting in your memory?
He Yi: The most profound impression I have is when I first entered the industry. In 2013, the price of Bitcoin rose to over $1,000. It gave me a great stimulus at the time. What is money? Is the money we thought of before really money itself? This incident was the real reason why I chose to enter the cryptocurrency circle.
Of course, I felt the excitement of this industry as soon as I joined the cryptocurrency circle. Just as I was officially announced to join the company, Mt. Gox (the world's largest cryptocurrency exchange at the time) collapsed. At that time, I felt that this was a disaster for the entire industry.
Looking back, we will find that the so-called big drop in the cryptocurrency market today (2024) and many people saying that the cryptocurrency market is dead, etc., compared with 10 years ago, in 2014, it is not so serious that it has a great impact on the perception of this industry. One day in 2014, Bitcoin should have fallen below $100. You sat in front of the screen and watched the price of the currency fall. Did you feel that the cryptocurrency market was going to end that day? That day was much more exciting than today's 30% drop. At that time, the liquidity was not so strong, and everyone was selling when they sold.
The industry at that time had some characteristics. 2014 was the time when "young people became famous". I often said in internal meetings that our recruitment should be more diversified. If I came to Binance for an interview ten years ago, I would definitely not get an offer with my background and resume at that time. We would ask if your English is good and what achievements you have made. It would be very professional. In 2014, the industry was relatively small. Ten years ago, people saw us as a group of pyramid schemers. They really thought you were all pyramid schemers. Looking back ten years later, whether it is talent, possibility or even the approval of ETFs, it is still a positive stimulus and cycle for the industry as a whole.
Reporter: Who was very famous in the industry at that time?
He Yi: When I first entered the industry, the most popular ones were definitely Kaomao and Changjian. They represented different roles. Some represented independent media such as Changjian, and some represented the mining machine track such as Pumpkin Zhang. At that time, except for Bitcoin, all other coins were copycat coins. However, Bitcoin fundamentalism was still quite obvious at that time.
Reporter: What was the difference between the industry back then and now?
He Yi: In 2017, a big change took place. The emergence of Ethereum made great progress in the financialization and pan-financialization that were previously discussed in vain. In 2017, everyone felt that there were real opportunities to start businesses, and companies like Binance were born. This era still brings opportunities to us in waves.
2014 was basically fundamentalism, but it also nurtured Ethereum. In 2017, a miniature financial system based on Ethereum was born, and various startups like ICO were born. But looking back at the wave of companies that stayed in 2017, there were still very few that brought high returns to users, and BNB might be one of them. In 2021, Defi was finally launched based on the 2017 concept, and companies like Uniswap were born.
Back to today's topic, I think that from 2021 to 2024, this so-called bull market is not driven by innovation, nor by huge changes in the industry, but by independent events such as ETFs. I think it is quite rewarding to summarize the history of the entire cryptocurrency industry, or to summarize the real innovations in each stage. Personally, I think that innovation is ultimately driving this industry forward.
Reporter: In the past seven years, Binance has grown into a behemoth with 200 million users and a market value of nearly US$100 billion. Have you ever encountered any difficulties or even desperate situations in the process? How did you get out of them?
He Yi: We do have more than 200 million registered users, although we don’t have that 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 it fluctuates cyclically. Ups and downs happen naturally. As long as you do things well, the results will naturally be good. I have always believed that as long as you manage the present well every day, you can achieve good results.
Since the first day of Binance’s launch, we have faced endless crises and difficulties at every step. For example, BNB fell 50% on the first day of its launch, which was probably the biggest dilemma for CZ at the time. We also faced Amazon Cloud downtime, infrastructure and domain name cancellation. Therefore, our philosophy is to solve problems when they arise and manage every day well. If you insist on doing the right thing, you will naturally get positive returns.
Growing up, we have a concept called "If you are poor, you should take care of yourself; if you are rich, you should help the world." But I think there is a flaw in this logic: when do you become rich? 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. You don't have to be like Elon Musk launching a rocket (to count).
In the process of development, you will naturally encounter different challenges, such as regulatory pressure or talent development challenges. No matter what kind of problem it is, I always maintain a positive attitude and do not feel that I am at the end of my rope when facing difficulties. Life is a wilderness, just take every step well. When I was in school, I ran 1500 meters in the middle-distance race. Every moment in life is a challenge, but as long as you push yourself a little bit more, you will find that you are constantly growing.
My values: coin listing standards, investment philosophy and ultimate vision
Reporter: Many project parties hope to obtain investment from Binance. What are the most important criteria for Binance when investing?
He Yi: I can align my understanding of investment with everyone.
In order for blockchain technology to be popularized and used by more ordinary people, we need to cross the chasm, and behind this, there must be real innovation drive. Labs has invested in about 2,000 projects, if not 2,000, at least 1,000. But to be honest, I have not talked to most of the projects, nor have I communicated with them.
Basically, Labs' investment depends on several frameworks. The first is whether the founder is a long-termist and believes in the industry. If he goes all-in on the industry and runs away, he is no different from a gambler. Even if he succeeds, he will sell the coins and run away.
The second very important point is his skills and what he has done. For example, some people are KOLs, and there are 1,500 people in the Telegram group. If I shout and the price of a single coin can also go up, will you invest? He may help a project to promote and market, but it does not mean that he is a good investment target.
The third is the mindset, whether his entire growth can be continuously iterated. Many people are very hardworking, even if they start from a low point, but they can keep iterating. You can probably make a judgment during the conversation with him. Does he have a vision for the industry, what is his understanding of the world? What is his or his team's capability model? If it is basically acceptable and the fundamentals are okay, we are still willing to invest some money to cultivate it. As for whether it can grow, whether it can pursue the so-called 100% success, this thing does not exist in essence. You see that traditional VC invests in ten projects, nine of them fail, and only one succeeds. This is very common.
Labs is investing in this project because we hope that there will be more innovators in this industry who can come forward and build confidence in this long night. Whether it is a long night of emotions or a long night before a big leap in technology, if you don’t support others, you will eventually be a lone walker. If you are the only one on this road, it cannot be called an industry.
Reporter: Binance's coin listings this year have been controversial. One reason is that the number of new coins listed is relatively large and the speed is relatively fast compared to before; the second reason is that most of the coins listed have strong interests related to Binance. Everyone feels that in this cycle, both retail investors and project parties are working for Binance. What do you think of this view?
He Yi: First, is the fact or opinion that Binance has a large number of listed coins or a fast listing speed? Objectively speaking, from last year to this year, Binance has only listed about 30 coins, while some platforms in the market have listed at least 100 coins. So does this view (Binance has a large number of listed coins and a fast listing speed) represent the interests of Binance or other exchanges? I'm not sure. This is something I'm trying to make my 5-year-old son understand.
Second, is it true that most of the tokens listed on Binance have interests related to Binance? If so, most of the tokens that Binance has listed may not be listed on Binance. Many projects on Binance have either no capital or 0.1 invested. A few years ago, some of our investment managers said they would give you a discount and invest 0.1, and they invested. Here we need to look at the thousands of projects on Binance, and many of these projects are actually invested by other trading platforms.
This needs to be studied. What percentage does Binance have in which projects? Will it be considered to be related to Binance's interests? When we list some projects now, we will ask whether you are willing to do Megadrop or Launchpool on Binance. If the project party is willing, there is no need to engage in hair-pulling. Many hair-pulling studio accounts are still fake. Binance provides real users. This airdrop can be directly given to Binance online users. At least these users are real, with KYC and face recognition verification. Those who are now receiving Binance's tokens are indeed retail investors, and Binance really has no participation. If Binance wants to pay the listing fee, it can just ask directly. Do you think Binance needs to go around this detour with the project party? No, who are you looking down on?
So in essence, people are angry because the market performance is lower than their expectations, and the return on investment is lower than their expectations, so they need to find a target to attack. At this time, someone is fanning the flames, and everyone thinks that a company should be pushed out, which is what is happening now.
A journey of a thousand miles tests a horse’s strength, and time reveals a person’s heart. In essence, if Binance is not allowed to list coins, while other platforms list hundreds of coins and their market share increases, this is not asking Binance not to list coins, but asking Binance to shut down.
Reporter: What is the value of Binance’s coin listing?
He Yi: You should understand that Binance's business is not just this one business. In essence, Binance provides users with trading products or non-trading products with different risk scales. For most ordinary people, if they are satisfied with an annualized return of 10% or 20%, Earn is a good product. Even if you use a stablecoin USDC for financial management, I think it is not bad. But if your expectation is to say that I want a broad, 100 times or 1,000 times, this may be a problem.
In this cycle, there is really no project in the market like Binance in the past. First, there is high growth in a very short period of time, and second, there is a target that is willing to share its own interests with users. As the industry matures, the information gap will become smaller and smaller. When the information gap becomes smaller and smaller, the competition will become more and more fierce, and the return on investment will become less and lower. At this point, everyone is more inclined to hope that no matter what coin is on Binance, as long as you buy it, it will rise. This expectation may have a relatively large gap. You can't say that it is normal for the coin I bought on other trading platforms to fall, and the coin I bought on Binance must rise.
In essence, the fundamental function of the trading platform is to provide everyone with relatively popular and hot projects on the market. However, in this process, we hope to screen out those project parties that have run away after three days of work, and screen out those project parties that have the opportunity to succeed or have the opportunity to survive longer. However, this does not mean that the coins on Binance will only rise and not fall, or that the coins on Binance will definitely rise.
In addition to financial management and spot trading, we also provide contract products. Some users are relatively more mature, so they can use products such as contracts to hedge risks. I think this of course requires higher personal knowledge or trading capabilities of investors. Essentially, as an industry grows, the players who trade with counterparties will become more and more professional. If others are more professional than you, then you are relatively more likely to suffer losses. You can't ask my vegetable market to sell only the least amount of vegetables, so that users go to other vegetable markets. To be honest, we can't do that.
Reporter: What good systems and cultures do you think Binance has gradually developed during its development that ensure that most of Binance's choices over the past seven years are in line with market logic?
He Yi: One of the good things about Binance in the past seven years is that its corporate culture is very solid. At least we talk about it every day. A key point in this concept is that we are essentially doing one thing, making the world's finance more free. We hope to become the infrastructure of the blockchain world in this process.
There are several key words in our values, such as User-Focused. You will see that Binance has been managing insider trading since 7 years ago. Our logic is very simple. As a trading platform, we can always get more information than users. We cannot let our employees use this information gap to make money because it is unfair to users. In essence, whether this matter is fair enough, user-friendly, and meets user needs, making decisions based on these will not go too far.
Secondly, we often say that you should take your own blame and not shirk it. No matter where our employees work, we don’t really care how many hours they work every day. No one will force you to punch in, but you should take your own responsibilities. Another one is cooperation. As a company with global distributed offices, I have never met many of our employees, even some of the people who report directly to me. At this time, how to better collaborate with others is quite critical. The last one is humility. If we find that someone is very arrogant or conceited outside, basically our internal audit will directly check him. This includes several dimensions. The first one is that I think we should respect the industry, because Nokia and Motorola were once in their heyday, and they collapsed in a moment. Respect your competitors, respect your users, respect the industry, and have a sense of awe. This is something that has not changed much for us in the past few years.
Reporter: Recently, I have observed that people's confidence in the industry has declined. On the one hand, the overall market situation is not very good, and on the other hand, there is a kind of disillusionment, or the technical narrative has temporarily broken down. People feel that the so-called technology and products are just disguises. The essence of this industry may still be a game of liquidity sentiment and chips. Many entrepreneurs think that it is better to launch a meme than to make a product, or retail investors also think that it is better to speculate on memes than to speculate on technology. Many times, we have observed that half of the top ten trading volumes on Binance are meme-related tokens. In your opinion, will this become a norm in the future crypto industry? Will there be some crypto applications that have real externalities or can form a positive cycle in the future?
He Yi: As you said, if half of the top ten trading volumes are memes, what will happen if Binance doesn't list memes? Our trading volume will go to other platforms, and users will go to other platforms. Many times we have no choice. Many times you are actually a compromise choice, you can only make the choice that maximizes value as much as possible.
This is not a unique phenomenon. In 2014, everyone thought that everything except Bitcoin was garbage; in 2017, everyone also thought that what was being hyped was garbage and that we were all here to gamble. Whether it is the traditional financial market or the Crypto market, it is indeed very affected by emotions, which is a fact. But it does not mean that we should make a good product or build a good business model. It does not work.
Recently, I often emphasize one thing to my team members: unity of knowledge and action. You have to stick to what you believe in, and only by persisting repeatedly can the result appear. We all know from childhood that as long as you study hard, your test scores will probably not be bad. But many people know it, but can't do it. We all know that you want to lose weight and have a very good body line, and you want to have a healthy body, control your mouth and move your legs, but you can't do it. Others are tempted every day to tell you to enjoy the present and eat well, and lose weight first and then lose weight. You can understand that this is also true for both the entrepreneurial market and the investment market. When you want to stick to your ideals and insist on innovation, you won't care if others tell you that it's better to make memes than to hype up some technology.
Looking back at the time when BNB was launched in 2017, others were also laughing at BNB. Others said that it was funny that there were trading platforms issuing coins. It was not that the public chain was also equipped to issue coins. Most of the time, it was not because they didn’t know, but because it was more difficult to do. This industry is also like this. Everyone knows that there is still a need for product innovation and technological innovation. It is necessary to be able to create applications that truly have users and can influence the world, but this is more difficult.
Reporter: Mentougou's return of users' funds and sale of cryptocurrencies to the German government have made the market pessimistic and cautious. How do you evaluate the recent market conditions?
He Yi: I don’t look at the market, I don’t look at the price, I don’t trade myself, I have held BNB since its inception in 2017 until now, I have not sold it, and I don’t trade it. For me, I still believe in your own understanding of the industry, and which assets in this industry are more valuable. You will have your own judgment. Of course, some people make wrong judgments, like I said before about EOS. Is EOS not innovative enough? No, POS is indeed the mainstream now. In 2017, everyone was rushing for POW, all Bitcoin and Ethereum. POS is EOS, is EOS mainstream now? Everyone agrees that EOS itself is a more efficient solution. There are many microscopic variables in this, and investors need to make independent judgments and do their own research.
Keep moving forward and make Binance an evergreen
Reporter: Many well-known leading companies in history are fleeting, such as Nokia, Netscape, and Yahoo; some companies are evergreen, such as Apple and JPMorgan Chase. In an industry with very fast innovation, even giants often only need a short time to go from prosperity to decline. What major crises do you think Binance is facing in the future, and how do you deal with them?
He Yi: I am a person with a strong sense of crisis. From the perspective of the entire industry, the biggest crisis is of course the regulatory crisis, and this is not just for Binance. Although we have just passed this test, regulation is always an important challenge.
The second crisis is the crisis of industry competition and innovation. At this stage, the competition between exchanges is parallel, and the core skills of each exchange are not much different. We are also constantly learning from others and continuously improving. The bigger crisis actually comes from unknown uncertainty and innovation. Therefore, we encourage continuous attempts at new things from the perspective of investment and internal employees. If any colleague wants to conduct innovative business or has 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 emerge and you are unaware of them, that is the biggest crisis, just like when mobile phone giants did not 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 like in the past. Now we need to establish effective communication with regulators and policymakers. I personally spend more time focusing on how to transform a startup supported by the charm and ability of the founder into a long-lasting company. This requires the improvement of organizational capabilities. If the organizational capabilities are strong enough, we can continuously cultivate good seed players.
Reporter: What is the approximate proportion of employees working remotely at Binance? Do you think this form of large-scale remote work is a pioneering or rare phenomenon in the history of enterprises? What are the difficulties in management? How can remote work prevent such negative behavior or even theft of coins by insiders?
He Yi: Remote work is not original to Binance. I remember there was also a 2B company that had it, but it may be that we promoted it.
From a management perspective, recruitment may be the most important thing, because if you recruit the right people, it means that your values are essentially more similar, and it will be relatively easier to build trust.
Going further, I think the key point is that the management rules must be clear, because even if they are very similar people, after they join your organization, the transparency of your information, including effective communication, is quite important. The so-called effective communication, when everyone is not from the same cultural background, not in the same time zone, different skin color, different environment, how can everyone build trust when working together? I think effective communication is very important, and effective communication is based on the transparency of your management rules and evaluation system.
Secondly, how to prevent insiders from doing evil, I can understand it as two dimensions. Preventing theft of coins or preventing security incidents. First of all, how much investment is made in security. I think that for any company, the first thing is the time cost and the cost of your resources. The more resources you invest, the more rules or resources you have, the higher your safety factor will definitely be. The first thing to prevent is external thieves. Most security measures or your security team are more of an external defense. This is the first step.
The second and more important step is the issue of internal security defense. Internal security defense actually goes back to the original point. The first is the time and energy cost you spend on recruitment, whether the people are right, and the second is whether your security information management is effectively classified. Whether it is user information or asset management information, whether different resources are placed in the hands of the right people.
We can see that in history, there are several situations in which some trading platforms have been stolen. One is that they trusted the wrong person, and the second is that the security information is not graded at all. In the eyes of many people, you are transparent. Sometimes your employees may steal your coins or your user information. So I think the essence is a management problem. Of course, there is no 100% security in this world, and continuous investment is also very important.
Reporter: Can you tell us about your plans for the future, such as how to find a balance between work and family?
He Yi: First, I think we should spend more time on more important things. Second, there is a concept of time granularity. I usually don’t spend so much time communicating with everyone face to face. I usually hope to control the meeting within 30 minutes. If it is a more effective meeting, I hope to control it within 15 minutes. So in fact, it is essentially a matter of time granularity management. These two points are more meaningful to me.
I personally have a strong sense of responsibility. I hope to build Binance into a long-lasting system. In each module, each professional manager can cultivate enough successors who are better than me, have better backgrounds than me, and are stronger than me in their professions. How to organize these people together and maximize their value is still a thirst for talent. The team has enough strong people, and each of them can manage better than me. At this time, I can just ask.
I have said before that I particularly admire Duan Yongping. After retiring from BBK, he still has VIVO, OPPO, and Xiaotiancai watches. This is a successful retirement. It doesn't matter whether he retires or not, but his structure is good. If his talent team is well built, it doesn't matter whether he has the concept of retirement or not.
Reporter: Many senior people in the industry have begun to pursue their favorite careers outside the crypto industry. CZ is now building an education business, and the founder of Coinbase has also founded a biological company that studies immortality and delays aging. If you have the spare time to do what you like, what would you choose to do outside the crypto industry?
He Yi: I haven’t thought about this. Outside of the crypto industry, I may not be interested in starting a business. But I think it may be my personal characteristics. I used to study education and worked as a teacher. I like to teach others. I personally hope to help others succeed. Only by helping more people succeed can I succeed. This is how I understand the world.
If I hadn't done this, it would be hard for me to imagine that there is nothing else outside of the crypto industry that is worth my time and energy, which is to help more people succeed. I understand that CZ's decision to do education is also a passive choice, and he has to do it. To be more precise, he would have nothing to do if he didn't do this. Coinbase's choice is also understandable. The speed of AI development in this world is so fast, and AI is indeed a more advanced intelligence than humans. Humans are actually a relatively simple code design, and the logical input and output are relatively predictable, but humans often have bugs, because the gap between knowing and doing is quite large, and most people know that they cannot do it.
If you look at the entire human history, poor people want to make money, and people who make money are pursuing immortality. It is roughly possible to judge what a person does after he becomes rich. Under this structure, I think it may not just be Coinbase, but also some older OGs in our industry. After they make money, they may have more children so that their DNA can be passed on. Secondly, they can pursue living longer and longer, and pursue immortality. This is normal logic. It is visible to enjoy life moderately and pursue quality of life. But it does not mean that if some OGs leave this industry, this industry is not trustworthy, nor does it mean that if some financially free people enjoy life, others will have no chance. It is precisely because those people leave that there are more opportunities.
Reporter: How do you hope people will evaluate Binance in the future?
He Yi: I have been saying since the beginning of my business in 2017 that we are not starting a business, we are creating history. I have been convinced of this since the first day I joined, and I believe that blockchain will bring future changes and possibilities to the world.
My logic is, I believe in it, so I will go all in and devote myself completely to doing this.
Is this also why I resolutely left home to do this during the "September 4th" incident? Because I saw the changes that blockchain technology could bring to the world in the tide of the entire era, so I felt willing to devote myself to this matter, and I also believed that there would be more outstanding entrepreneurs and more outstanding talents to work with us to do this. A single spark can start a prairie fire, and only by believing can you see it.