Editor | Wu Talks about Blockchain
Recently, Binance has exceeded 200 million registered users and held an AMA for this. Binance co-founder He Yi answered some questions that everyone is concerned about, including the recent counter-trading theft of coins, the contradiction of FDV's large project listing, and the standard for removing zombie coins. In addition, He Yi said that he would write emails to CZ every day and also need to write reading notes; his daily life is mainly fitness, making phone calls (teleconferences), and coaxing children to sleep, which is very boring. He Yi jokingly mentioned "girlfriend coins", saying that Binance is trying to see if it can bring some normal business models, and will also endure some ridicule and failures in the process.
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https://www.xiaoyuzhoufm.com/episodes/666c5490c26e396a36d677dc
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Statement: The content of Space does not represent Wu Shuo’s views. Readers are advised to participate in investment with caution and strictly abide by local laws and regulations.
Does Binance have any recent progress to share regarding user security?
He Yi: First of all, I want to say that there is no absolute security when it comes to security, and we must always be vigilant. This applies not only to exchanges, but also to our own asset security management, whether using hardware wallets or e-commerce wallets.
Binance suffered losses in the early days and has indeed invested heavily in security. Our investment in security is currently an ongoing process. For example, some users previously had their assets stolen because they clicked on a third-party plug-in. We have improved our risk control standards and levels in this regard.
We have implemented dual risk control in the cross-trading. First, when the price fluctuates greatly, big data will capture information and alarm, and then conduct manual confirmation. At that time, we captured the price fluctuation information, but because there were many trading teams involved and the profit-making party was not single, there was no big problem in risk control judgment.
We understand users' expectations of us for losses caused by users clicking on plug-ins, and hope that Binance can provide them with a bottom line when they make risky operations. We have put forward higher requirements for the security team and risk control team, and continuously iterate our security measures.
Some users have had their assets stolen due to account sharing. We can find out the specific situation through complete user behavior logs. It is recommended that you try not to click or share suspicious links, especially videos, live broadcasts, etc. If you must click, it is recommended to put the trading account on a relatively independent and safe mobile phone, especially for users with more assets.
When downloading an APP, check whether it is an official version and avoid downloading phishing APPs. Recently, everyone is in a panic, and there are many different voices in the community, such as questioning whether the trading platform is stealing from the inside. We believe that a well-run trading platform will not have such behavior, because this is a healthy business model, and our competitors are also doing well. Such rumors will greatly damage users' trust in the entire industry. The above is a summary of the recent frequent security incidents.
How does Binance view projects with high FDV and low circulation? Will it intervene in the opening price and token distribution?
He Yi: First of all, I would like to give a framework. This framework is my personal observation and understanding, and does not represent official logic or absolute standards. The blockchain industry has entered a special stage, similar to the process of technology moving from a niche market to a mass market. For example, early technologies such as VR and 3D printing, although very popular, have not been widely used because they have not been able to cross the gap from a niche market to a mass market. Tesla's success lies in the commercial application of electric vehicle technology.
In the blockchain industry, we may be building a more decentralized and efficient miniature financial system. In this system, there are already mature business models for scenarios such as transactions, assets, and inflation prevention. However, the greater challenge is how to truly help the blockchain industry move towards mass application. Currently, there are almost no successful cases in practical scenarios such as games and social networking.
I hope that more projects with real business models can be built on the blockchain, rather than just staying at the empty concept. The anti-VC wave and the popularity of memecoin reflect the lack of high-quality assets in the market. Many VCs invest in projects with high valuations, but these projects do not have good business models. Airdrops and other methods are just for data, and trading platforms are forced to list coins due to user demand, but in the end no one is really satisfied, and everyone suffers.
We hope that every project will have sustained growth and a good business model, but in practice, the trading platform cannot control the project parties and market makers. We can only give guidance, such as hoping that the project parties can have more airdrops to users, but we cannot intervene in pricing and execution. When we recruit projects, we hope to find teams with low valuations and good business models, and also recruit market makers. However, too many requirements will cause market makers to transfer liquidity to other places.
The high FDV problem has caused users and investors to suffer except for a small number of project owners who have made profits. This industry is an emerging market, and the rules for issuing coins can be customized. Investors and users need to spend more time doing research and voting with their feet. We continue to iterate the standards and requirements for project owners and market makers, but this process is a battle of wits and courage.
We hope that there will be more friends in the market who are willing to work on solid projects, not just launch empty projects. Real success needs to withstand the challenges of human nature. I hope that this wave of bubbles will precipitate more excellent projects and assets.
In the future, we hope that blockchain assets can be used by more entrepreneurs in terms of investment incubation and funding, rather than just locking users into airdrops and trading platforms. The entire industry needs to cross the chasm.
How to maintain high passion and energy?
He Yi: From personal experience, I grew up poor and have seen the highs and lows of the world. When you see the disparity in the world, you will think about what you want to do in this world, or what you want to leave behind. I might say that material legacy is your children, the continuation of your DNA. But if there is an opportunity to really change the world, why not give it a try? Leave something transformative like Elon Musk or Amazon. In fact, a person can only spend a limited amount of money in his lifetime, and I am not a person who likes luxury. My greater passion is how to rebuild myself, break my own ceiling, and see my own growth.
I focus on self-improvement. For example, I sent a message last night saying that I slept for 6 hours and then got up to work out. I did get up to work out, and was beaten badly by my coach. The requirements for myself can be divided into several modules: the first is health. Fitness is not only about body shape, but also about health. The second is the iteration of self-cognition. I recommended a book "Lifelong Growth" on Twitter, which can push me to iterate myself. My advantage is that I can quickly internalize after reading the book and form a connection with my own knowledge. The third is to leave something in this world. If I can change the world, I want to try. This is why I have been consistent and insisted on being on the front line for many years.
If you ask me if I want to retire or be lazy, of course I do. But I have a goal, which is to build a long-lasting company. This is not only a requirement of personal ability, but also a requirement of the ability to build an organization. If every executive of Binance can copy me in terms of concept, they may be more professional than me in terms of skills. For example, our VIP user manager understands finance better, and the technical team understands technology better. My goal is to build a strong, healthy and continuously growing organization.
In this regard, my role model is Duan Yongping, who is very low-key but successful in the history of Chinese entrepreneurship. He founded Subor and BBK, which later split into vivo, OPPO and Xiaotiancai watches. Not only did he succeed in starting a business, he also achieved great success in investment, such as investing in NetEase and Pinduoduo. Duan Yongping's success proves that success can be replicated. I hope that my ability to succeed can also be replicated to more people, cultivate more high-potential talents for Binance, and bring good thinking, ideas and corporate culture to Binance.
This is what I hope to do and what I am working hard on now. I also welcome more friends with potential and interest in Binance to join us.
How to choose Launchpool and MegaDrop projects?
He Yi: We don’t select projects through Launchpool or MegaDrop first, but we select projects first and then see if they are suitable for MegaDrop or Launchpool. Initially, we did Launchpad, but because many countries and regions have regulatory issues on token pre-sales, we changed to airdrops. We first launched Launchpool for airdrops and found that many project parties want to obtain real users, and Binance’s coin holders are relatively more real.
Binance's Web3 wallet has KYC, which can prove that the user is real. For example, the ZK project was recently criticized because they turned away many users of the cat studio. If real users were acquired through Binance's Web3 wallet at the beginning, the situation would be much simpler. Therefore, Launchpad, Launchpool and MegaDrop are all solutions for project parties to find real users, while also seeking benefits for Binance users.
Sometimes we choose to list their projects because they are willing to provide more airdrop shares, but this decision may not always be correct. Therefore, we constantly reflect and listen to user feedback. For example, a project with high FDV has low circulation after listing on other platforms, and it rises in the short term, but then the price falls. There is no standard answer, such as whether the circulation or deflation model is definitely good, which needs to be evaluated based on the specific situation.
Our goal is to find high-quality projects and teams with long-term development intentions or potential for success, and then decide whether to put them on Launchpool or MegaDrop. If the project offers a lower share, we put it on Launchpool; if the share offered is higher, we put it on MegaDrop. No matter what the name is, the key is to help the project acquire real users while providing benefits to Binance users.
We will adjust project selection criteria based on market feedback to ensure the healthy and long-term development of the market.
Does Binance have standards for delisting zombie coins? How to manage and clear them?
He Yi: We conduct regular audits on tokens that have been launched. The audit is not limited to social media activity, but also includes the continued development of the product, liquidity, and whether there is any major negative news. In addition, we will also conduct assessments based on the regulatory requirements of various countries and regions. If we find a token with a higher risk, we will attach a monitoring label and spend more time observing it.
Recently, our frequency of delisting has decreased, mainly because some projects have become active again during the bull market. We have a dedicated department responsible for monitoring the projects that have been launched, including on-chain accidents, hacker incidents, and user feedback. When delisting a coin, we will conduct a detailed analysis to ensure that the decision to delist the coin is accurate, rather than simply delisting the project because of poor performance.
Delisting will hurt both the project owner and the token holder, so we try to be objective and strictly enforce the standards for listing and delisting. Don’t think that some “shell” projects on Binance can be bought, because these projects may be delisted at any time. We firmly oppose this kind of shell buying behavior, and we will directly shut down the project once we find it.
How do you view the market value comparison with Coinbase? Where is the room for BNB to grow?
He Yi: First of all, I think Coinbase is essentially a stock security, while BNB is a token. The two are not on the same track. Coinbase stocks cannot be used on the Binance platform like BNB. BNB not only has Binance's application scenarios and continuous destruction mechanism, but also has the support of BNBChain.
BNB is widely used on the Binance platform and is known as the "golden shovel" and can be used to offset a large number of transaction fees. Although the current momentum of BNB Chain is not as large as the user base of some large L2, L1 ecosystems or TON, BNBChain has more real Web3 users and builders than developer-centric public chains such as Ethereum or Solana.
I think an important direction for BNBChain in the future is to bring blockchain technology into the lives of ordinary people and help more entrepreneurs and developers to push the entire blockchain industry into the next stage. From this perspective, Coinbase and Binance are taking completely different paths. Coinbase is an excellent trading platform that has achieved profitability through cooperation with Circle, but Binance is taking another path in the blockchain track.
Binance empowers BNB by continuously distributing benefits and airdrops during the launch of many projects. Short-term price fluctuations do not mean anything. We are more concerned about the long-term efforts and goals of the team. The co-construction of BNB Chain and the entire community requires the joint efforts of users, communities, entrepreneurs and developers.
Which tracks do you focus on? What do you think of AI? How do you spend your day?
He Yi: Let me answer the question about AI first. In fact, I also talked about my understanding of AI in the last AMA. I think blockchain changes labor relations and distributes benefits, while AI is a huge change in productivity. For example, many trading platforms and products are multilingual environments. If AI can be used well, a lot of translation costs can be saved and efficiency can be improved. This is a specific example of productivity improvement. In the future, AI's productivity improvement will be reflected in more aspects, including design, marketing, etc., with lower costs and higher efficiency.
AI can be divided into several modules. The application side is the most common one, such as OpenAI’s chatbot, which can help with writing plans, designing, making videos, etc. Further up are the large model teams. These teams are small in size but have very strong professional capabilities. The next step up is computing power, which is why Nvidia stock is performing so strongly. NVIDIA's leading position in chips makes it difficult for other competitors to match. The advancement of science and technology has made the computing power increase more significantly.
Energy and data are two key industries supporting the development of AI. Global wars and political struggles often revolve around energy, and the future development of AI is also inseparable from the support of energy. Data is another key factor. Companies that have a large amount of user data have an advantage in the development of AI.
We are also looking for good AI solutions at Binance. For example, the Greenfield product previously launched by BNB Chain uses data through a privacy protection network to ensure user privacy. This is our attempt to combine blockchain and AI.
Regarding the choice of track, I think as a businessman, you need to keep an eye on and think about various emerging tracks. No matter what track it is, as long as it is helpful to society and has good products and services, it is a viable business.
My daily life is actually very simple. I work out three times a week. I usually get up early to work out, and then I have a full day of conference calls. My goal is to cultivate a team with leadership and build strong leadership in the entire industry. In addition to meetings, I spend a lot of time studying organization and management and communicating with the head of HR. Recently, I have added the task of writing emails to CZ to report on my work and share my life. My life is simple and unpretentious. From morning to night, I work, work out, spend time with my family, and read. This is my day.
What is Binance thinking about stablecoins? How will it develop in the future?
He Yi: Our logic for stablecoins is very simple. Although we cannot say that we will accept all comers, we hope that this will be a continuous competition. In the past, BUSD cooperated with third parties. For us, whether it is TUSD, FDUSD or more stablecoins in the future, we welcome cooperation. The key lies in whether the qualifications and capabilities of the partners match and whether we can reach an agreement. We are very optimistic about the stablecoin track, but to operate this well, we need the right time, right place and right people, not just setting up a stablecoin account and accepting funds.
After Binance users exceeded 200 million, where might new users come from? First of all, it should be stated that registered users are not equal to active users. Some registered users may not have any transactions or top-up behaviors. For the market to reach a larger scale, more high-quality assets need to appear. If the industry is involuted, the reason is the lack of high-quality assets, which involves the problem of crossing the chasm. Our task and thinking is how to cross the chasm and make blockchain like the Internet or AI, so that ordinary people can use it directly. As long as the chasm is crossed, it is not a problem for the user scale to increase ten or twenty times.
I firmly believe that as long as there are high-quality assets in the cryptocurrency market, the market size can be expanded five times or more. New applications and companies will emerge in each cycle, and companies that persist and create value for the world will become industry leaders. Just like the top companies after the Internet bubble, such as Apple, Amazon, Facebook, Google, etc., they continue to create value and become the world's top companies. We also hope to see such continuous growth and development in the blockchain field.
After Binance surpassed 200 million users, what plans and strategies does it have to bring in more outside forces to the industry?
He Yi: After Binance has surpassed 200 million users, what plans and strategies do we have to bring in more outside forces to the industry?
In fact, Binance has been trying this. Whether it is from the marketing level, or through our academy, charity projects, and even in terms of project listing, we have made some attempts. We have also received some negative comments. For example, everyone knows that we signed The Weeknd before, and we later signed Cristiano Ronaldo. Cristiano Ronaldo has 600 million followers on Instagram, and his daily likes are often millions or even tens of millions. We hope to let more people know about Binance and cryptocurrency through these celebrity effects.
In addition, we hope that when users register on Binance, they will take the time to understand cryptocurrencies instead of blindly following the trend of investment. Even if you invest in meme coins, you need to understand their nature and cycle to avoid impulsive operations. Our logic is that the projects launched on Binance are not necessarily very high-quality projects, sometimes because of user demand. We will first put some projects on the contract market and let users choose to go long or short. If you are not sure about the long-term popularity of the project, put it on the contract market first, and users can choose one or two times leverage.
We have made some mistakes. For example, the Hook project was ridiculed as "girlfriend coin" by everyone, and many people questioned that the users of this project were fake and bought. We carefully studied their users and found that they were not typical Crypto users, but the kind of users who get rewards by registering and completing tasks, such as motorcycles, rice cookers, etc. These users are not typical Crypto investors.
We have also recently collaborated with some Web3 projects on cross-game projects, attracting 1.3 million users, but only 56 of them became trading users because they were mainly looking for the benefits. In this process, everyone may question why we are on these projects, but we hope to find applications and business models that can change the lives of ordinary people through these attempts.
In addition, Binance Academy and charity projects are also taking on more industry responsibilities and influence. Although sometimes the investment is not always effective, at least more people have seen Binance and cryptocurrency. Signing Ronaldo may not have brought a large number of registered users and trading users, but at least more people have seen Binance.
There is a lot of negative information and prejudice in the Crypto industry, but we will continue to push the industry forward and guide more outside users to join. Even if we endure some ridicule and failure in the process, as long as the goal is clear, we will move forward firmly.
In summary, we will continue to work hard to introduce more forces from outside the industry to promote the healthy development of the industry.
What impact will the US regulatory settlement have on Binance's development in Europe or other regions?
He Yi: After the regulatory settlement in the United States, Binance's development in Europe or other regions will be affected to some extent. You may have also seen that one of our executives got into trouble in Nigeria. From a regulatory perspective, traditional finance has a history of hundreds of years, and the regulatory system has been established step by step. Therefore, when they see a new thing like Crypto, which claims to overthrow traditional finance, they will naturally regard it as a flood and a beast. In this case, as a leading company in the industry, we will face more pressure and challenges.
Many people think that DeFi can solve all problems, but in fact, the development of the Internet has also gone through a similar stage. Although freedom of information is important, the Internet is still observed and regulated by governments. The blockchain industry will face similar challenges. If it is fully decentralized, regulators in various countries, especially the United States, will take strong measures to crack down on DeFi, and they will not be soft on CeFi. This is why CZ is still in the United States.
If we want this industry to serve 1 billion users and drive the industry forward, we must reconcile with regulators, build consensus and trust, and find a way to survive. When the industry is large enough, it must demonstrate its positive impact, how to complement the existing financial system, improve efficiency, and achieve peaceful coexistence. This is the direction we are thinking and moving forward.
In this process, we will encounter some challenges, such as the possibility of not being able to provide contract transactions in certain regions. In addition, the size of the compliance team will become very large, and many decisions will require the approval of the compliance and legal teams. However, as long as the organization itself is strong enough and the strategy is correct, these staged challenges will not affect the long-term goals. Overall, we are still seeking coexistence.
Coinbase is also very supportive of embracing regulation. We may be the first exchange in the world to actively embrace regulation, especially in the United States. In fact, competitors in the entire market, such as Coinbase, OK, Huobi, Bybit, Bitget, Bitmex, etc., every company that has come to this day has gone through many cycles, and there are many things we can learn from. This industry is still in its early stages, and we need to work together to make the pie bigger.
