Key Takeaways
"There is no absolute security." Binance's investment in security is an ongoing process. With the experience of recent events, we have improved the current risk control standards and levels, and put forward higher requirements for the security and risk control teams, and constantly iterate ourselves.
Let the entire industry cross the gap. We hope that the entire industry can settle down in this wave of bubble waves, usher in more excellent projects and assets, truly allow blockchain technology to be applied by more entrepreneurs, and bring the entire blockchain industry to the next level.
Reconcile with regulators, build consensus and trust, and find a way to survive. As a more mature industry leader, we need to know how cryptocurrencies can help the world become better, how to better complement the existing financial system, make the existing financial system more efficient, and better coexist peacefully.
The following is a summary of Binance Co-founder He Yi’s responses to community opinion leaders and user questions during the X Spaces AMA on June 13, 2024. Please note that this transcript has been edited for length and clarity.
【Phyrex Ni】: Recently, there have been frequent security incidents at exchanges, and many investors are concerned about asset security. Now that Binance users have grown to such a large scale, what new progress has Binance made to make investors safer?
Yi: I have said to the team: "There is no absolute security", which means we have to be alert at all times. There is no absolute security not only for exchanges, but also for users' own asset security management, whether using hardware wallets or on-chain wallets. Binance's investment in security is an ongoing process. With the experience gained from recent events, we have improved our current risk control standards and levels.
Binance currently implements dual risk control in the face of sudden price fluctuations. When the price of the currency fluctuates greatly, big data will alarm based on the captured information, and then conduct manual confirmation. Binance's security team and risk control team are very experienced. I understand that users choose Binance and expect Binance to help intercept when users face sudden risk operations due to their own reasons. Therefore, I also put forward higher requirements for the security team and risk control team to continuously iterate themselves.
Here I suggest that when you encounter fancy links sent to you by others under various banners, try not to click or share them. We can put the trading account on a relatively independent and safe mobile phone, especially if you have a lot of assets. At the same time, you must use the official download link and use the genuine App.
Everyone has been a little panicked recently, and I have seen many different voices in the community (Editor's note: recent community discussions on security incidents at other exchanges). I think that for a well-run trading platform, it is unlikely to drive its own users out. After all, it is already a relatively healthy business model. So this kind of rumor will greatly damage users' confidence in our entire industry. This is my summary of the recent frequent security incidents.
【Auntie Ai】：We can see that there is a clear anti-VC trend in this bull market, and people's expectations for high FDV and low circulation projects have been significantly reduced. As the largest exchange, Binance has repeatedly emphasized the importance of sustainable development of projects and expressed its hope to support more low-market-cap projects. How will it be implemented in the future? Who sets the opening price of a project? Does Binance intervene in the opening price or token distribution?
Yi: I personally think that the entire blockchain industry has entered a very special stage. There is a book called "Crossing the Chasm", which talks about how new technologies develop from niche markets to mass markets, how to face challenges, find niche tracks and how to run your own business model. But I see more challenges in our industry in this book.
Why didn’t the popular VR concept including 3D printing be widely used? I think the biggest reason is that they didn’t get out of this gap. From the attempts of niche geeks to early users in emerging markets, new users were not interested after trying, so they naturally failed. I think the challenges of the blockchain industry are more typical, such as CeFi like Binance, or DeFi like Uniswap and anti-inflation application scenarios of stablecoins. However, the bigger challenge is how to truly help the entire blockchain industry go to the public and continue to empower users like BNB. This is the challenge that the entire industry is facing now.
I personally certainly hope that there will be more businesses with business models that can be built on the blockchain, rather than on more abstract concepts. As I said before on Token2049, the popularity of all Memecoins and inscriptions is anti-VC. Why anti-VC? I think the fundamental problem is that there are indeed many VCs in the market that have invested in many companies with very high valuations, but they have not really come up with a good business model. They may use airdrops to collect data, and after the data is collected, the trading platform is forced to list the currency under pressure, and then users buy it. In this process, you will find a very interesting point. Except for the project party, no one is satisfied in this process. Because you will see that most VCs will be locked, it is recommended that you can also observe when doing data analysis, how many years these investors have been bound. Sometimes VCs are also the objects of cutting. You will find that it is becoming more and more difficult to do VC in the crypto industry. Many VCs are also saying that they can't do it anymore, and it is better to be a KOL to get rebates.
We hope that every project can empower users in the long term, but as a trading platform we have no way to control the project party or market maker. In the execution process, the price pricing trading platform has no way to control after the project party goes online, because we do not participate in the transaction ourselves.
Binance has many requirements for the market makers of the project parties. We will limit the amount of money that market makers can withdraw from their accounts every month, which has led to many market makers moving their liquidity to other places and not playing with Binance. The high FDV directly leads to the fact that except for a small number of project parties whose villas are close to the sea, the rest of the users and investors are very painful. This industry is a very emerging market, and I think we should spend more time on research. If Binance does not list many projects with ridiculously high FDV, people will say that Binance does not list such hardcore projects; if it lists some low-valued projects for them to try, some users will also say that you also list such non-Web3 projects.
No matter what, it is difficult to make everyone happy. We can only continue to iterate our standards or requirements for project parties and market makers in this process. This is the same as security. Use policies to manage the process. Even if you design a good rule, there will be countermeasures to deal with this rule. I think it is still a process of fighting wits and courage. We sincerely hope to call on friends in the market who are willing to do projects in a down-to-earth manner to think clearly about what you are doing so that you can not only use the blockchain, but also make profits.
Some people say that the more incomprehensible a project is, the more valuable it is. I think success goes against human nature. We hope that this industry can settle down in this wave of bubbles, usher in more excellent projects and assets, and truly allow blockchain technology to be applied by more entrepreneurs, rather than just welding users to airdrops and transactions, so that the entire industry can "cross the chasm."
[Dayu]: Binance has a very unique landscape. Yijie has been the "Binance Chief Customer Service" for several years. We can all feel that Yijie's style and passion for work over the years are no different from when Binance was founded a few years ago. I would like to hear from Yijie, what motivates you to maintain your passion from the beginning to now, and always be as energetic as a fledgling girl?
Yi: You may be asking what turned me into a ruthless work machine.
I was born in poverty and have seen the highs and lows of this world. When you see the disparity in the world, you will think about what you want to do or leave behind in this world, which may be a material legacy or a child, which is the continuation of your DNA. But on the other hand, if you have the opportunity to truly change the world, to truly leave behind something amazing and revolutionary, then why not give it a try?
If you do a careful calculation, if you are not a person who particularly likes to buy luxury goods every day, the amount of money you can spend in your lifetime is very limited. I happen to be a person who is determined not to fall into the trap of consumerism. I am more passionate about rebuilding myself, how to break through my own ceiling, and how to see my own growth. My requirements and standards for myself can be very simply divided into several modules.
The first part is your own body. In addition to the requirements for body shape, another part is health.
The second part is your self-perception iteration. I have previously recommended a book on Twitter called "Lifelong Growth". This is a very effective way of thinking that can promote self-iteration. I tend to integrate knowledge and action. When I read something, it quickly becomes my own idea, forming an interdisciplinary link with my own knowledge, and finally becomes my own thing and understanding.
The third part is what you leave behind in this world. I want to try to see if I can change the world. This is why I have been working on the front line for so many years. If you ask me if I want to retire or be lazy, I do, but we want to build a long-lasting company, which requires not only personal ability but also the ability of the entire organization. If every executive of Binance can become a "He Yi", not a "He Yi" in terms of skills but in terms of concepts, they are all very professional in their respective skills. For example, VIP colleagues understand finance better than me, and technical colleagues understand technology better than me. In this process, we build a strong, healthy and continuously self-growing organization. This is my goal.
In this regard, I will use a Chinese entrepreneur Duan Yongping as an example. He is a very low-key person in the history of Chinese entrepreneurship, but he was once very high-profile. After he finished working on Subor, he left Subor to start BBK, and then retired when the company was relatively successful. However, BBK has become three well-known brands today: Oppo, Vivo and Xiaotiancai watches, all of which are top companies that were created based on Duan Yongping.
There are many very powerful people in this world who can create success and then pass on their success to more people. Many people say that success cannot be replicated, but for me, replicating the ability to succeed to more people, cultivating more high-potential talents for Binance, and bringing good thinking, ideas, corporate culture and better governance structure to Binance are what I hope and strive to do now. I also welcome more potential friends who are interested in Binance to join Binance.
【Joey Lu】: Binance launched a series of new coin mining this year. How did Binance select LaunchPool and MegaDrop projects, and what is the difference between them? Will these two different new coin mining methods exclude each other, and at what pace will they operate in the future?
Yi: We don’t select projects through LaunchPool or MegaDrop, but select projects first and then put them on LaunchPool or MegaDrop according to their conditions. We started with LaunchPad, but considering the regulatory requirements of many countries and regions, we feel that airdrops are more appropriate.
We launched LaunchPool first. The project owners wanted everyone to interact on the chain and brush tasks, which cost the LuMao Studio a lot of money. In the last cycle, these project owners wanted coin holders or real users. Compared with brushing data in other ways in the market, Binance coin holders are obviously more real. Even though Binance's Web3 wallet is difficult to use, we are changing it. Everyone says that Binance Web3 is a wallet with KYC, which can at least prove that the user is a real user.
For example, some projects have been criticized recently, which has caused a lot of studios to lose all their money. If the project owners do not compete with the studios in this way, and want real users, Binance will give them to you, and this matter will become much simpler. Whether it is LaunchPool or MegaDrop, we are looking for some real solutions for these project owners, and we also hope to seek some benefits for Binance users.
Binance is an obedient trading platform. Here, "obedient" means that we will study the user's complaints and observe what is happening in the market. In this process, we are also constantly reflecting, but there is no black and white answer.
For the projects with high FDV, we expect that the circulation of the projects should be 10% or 7%. In the end, we found that there is no standard answer. The circulation of ETH was not very large in the early days, and BTC also relied on everyone's own mining. The circulation is a long-term and continuous unlocking process. There are not many deflation models like BNB in the market. Is the deflation model definitely good? Or is the inflation model definitely wrong? This is not a black-and-white answer.
Our current thinking path is to find some high-quality projects, whether they are good projects, projects with long-term development intentions, or projects whose teams have at least a certain degree of relative success potential. On this basis, we will see whether their share willingness is high or low. If the percentage given is low, we will go to LaunchPool, and if the percentage given is high, we will go to MegaDrop. In general, our underlying framework is to bring real users to the project party, and on the other hand, to seek some benefits for Binance users.
Users have criticized us for launching too many projects on LaunchPool. We have listened to their advice and will continue to raise the standards for selecting projects, observe what is happening in the market, and what else we can do to make this market develop more healthily in the long run.
[Jason Chen] There may be many zombie coins on Binance. Does Binance have standards or mechanisms for delisting coins, similar to the delisting mechanism in traditional finance such as the stock market? Will Binance manage the withdrawal of zombie coins and shrink liquidity to truly good projects?
Yi: Our listing team will regularly review the tokens that have been launched. We will not only review the activity of the project community, but also check whether the product is continuously being developed and whether there are major problems and negative liquidity. There are also some different standards according to the regulatory requirements of various countries and regions. In general, we have found that tokens with higher risks will be labeled for monitoring and we will spend more time observing them.
Recently, our frequency of token listings has been slightly lower. The fundamental reason is that some project parties have become active again in the bull market, so we do have a relatively long watch list at present. Binance has a special department that conducts daily monitoring of listed tokens, including whether there are hacking incidents, chain accidents, fraud and other problems. There are many projects that users criticize every day, and sometimes the team needs to do more work to analyze what happened. I think this is also a way to listen to both sides and not to listen to one side.
Many project owners will come to Binance to argue fiercely when they list their tokens. We try to list tokens accurately, rather than delisting them just because we feel that a project is not doing well. This will hurt both the project owners and the users who hold the tokens. We try to be objective and be relatively rigorous in both listing and delisting.
[Big Big Orange]: Currently, the market value of Coinbase is about 58 billion US dollars, while the market value of BNB is about 90 billion US dollars. How do you view the market value comparison between the two? Where do you think BNB has room for future growth and imagination? As the market develops, what potential and advantages does BNB have compared to Coinbase?
Yi: Let me answer the first question first. I think Coinbase is essentially a stock security, and stock security and tokens are not on the same track. In 2021, many friends in the community said that the reason why BNB is so awesome is not only because of Binance's application scenarios and continuous destruction, but also because of the support of BNB Chain.
First, you have Coinbase shares but you can’t use them, but at least BNB is quite useful on Binance, and everyone is calling it the “golden shovel” these days;
Second, BNB has a lot of transaction fee deductions;
Third, from the data, BNB Chain has more users than Ethereum or SOL, which are developer-centric public chains. We also see that BNB Chain is constantly innovating and will have a bigger direction in the future, which is to truly bring blockchain into the lives of ordinary people, which is similar to what I said earlier about "crossing the chasm". I hope to see BNB Chain help more entrepreneurs and developers to bring the entire blockchain industry to the next level. Coinbase is also a good trading platform, they are very good, and we have also seen that they have achieved profitability through cooperation with Circle, but in essence, everyone is taking two completely different paths in the blockchain track;
Lastly, in essence, Binance can continue to give everyone benefits and MegaDrop, which is one of the application scenarios of BNB. So I think from this dimension, the price does not mean anything. We don’t look at the price fluctuation of a certain coin today, but we pay attention to the direction in which our team is working and what goals we are moving towards. The whole community co-construction, whether it is the user side, the community side, or the entrepreneur side and the developer side, requires everyone to work together.
[Bonnie Blockchain]: What kind of track attracts the most attention of Sister Yi? Recently, the CEO of Nvidia has set off a whirlwind of AI in Taiwan. Are you optimistic about the AI track? Finally, I want to know what a day in the life of a sister looks like?
Yi: I answered questions about my understanding of AI in the last AMA. Blockchain changes labor relations and how we distribute all the benefits. AI itself is a huge change in productivity. In all aspects of the future, this improvement in productivity will be reflected in our lives. In essence, it is to complete tasks more efficiently at a lower cost. I am very optimistic about AI.
AI is roughly divided into several modules. The most common one may be the application side. For example, Open AI can chat or write a plan, or let AI help you design and make videos. This is the C-end. Going up is the so-called large model. The large model team is usually not very large. It is one against a hundred. Professional ability is more important than the size of the team. If we go one step further, it is computing power. This is why Nvidia's stock is so strong. Nvidia is a very typical industry with a siphon effect in chip manufacturing, where the top strong ones become stronger. Only when the product is done to the extreme, others can't catch up. This is the iteration of the technological singularity.
There are two industries at the top of the chain that are not paid much attention to, but I think they are very important and will support the development of AI in the long run. The first one is energy. Looking back at history, all wars and political struggles are fought for energy. No matter how powerful the chip is, it needs energy to support its continuous computing. One step up is data. A lot of data in this industry is concentrated in the hands of traditional Web2 giants. The larger the scale of user data, the more advantages it will have when it wants to penetrate downstream when doing AI and make the large model more accurate.
Binance is also looking at some AI projects and looking for some good AI solutions. Binance has many opinions and attempts in investment, but its energy is limited and it has not conveyed its understanding of the industry, investment, AI and future development to users. We hope that future products will not only be self-entertaining, but will truly allow technology to serve life and effectively change the world. This is my understanding and thinking of AI.
Second, my interests and interests are very broad. No matter what track it is, I will spend a little time thinking about it and pay attention to new things. If I really want to do something, as long as it is helpful to society, has good products, good services, can have better solutions, and can really help others, I think this is a viable business.
Finally, my personal life is extremely boring. I work out three times a week, and then I make phone calls for 30 minutes at a time, and occasionally I can spare one to two hours. As I said before, I hope to empower our leadership group with Binance's strong power, and hope to cultivate future leaders who can truly lead in this industry. If not, I at least hope that he/she can be independent in certain departments of Binance and hold up the sky, which will take up a lot of my time.
My life cannot be called simple, it is extremely boring. If you are next to me, you will see a person who gets up in the morning to exercise or not, makes phone calls from morning till night, puts the children to sleep, and reads a book for a while. This is my life which basically does not change day after day.
[Big Brother Tu’ao]: I am curious about what Binance thinks about stablecoins? At the same time, Binance has exceeded 200 million registered users. Where will the new users in this industry come from?
Yi: Regarding the first question about stablecoins, our logic is very simple, that is, we hope that this process will be a continuous competition. Whether it is FDUSD or future stablecoins, Binance always welcomes cooperation, but we just need to confirm whether the qualifications of the partners themselves match. The stablecoin track is not about setting up an account, everyone deposits money into it, and your business will be done well. To operate this thing well, you need the right time, place and people.
Regarding the second question about new users, I would like to state that registered users are not equal to active users, and registered users do not necessarily have trading behavior. It is not difficult for this market to expand five times to 1 billion, but I think it requires the emergence of high-quality assets. Our current thinking is how to cross the gap. As long as we can cross the gap and truly make blockchain like the Internet, so that ordinary people can use it directly, then it will not be a big challenge to expand the basic user scale by 10 or 20 times.
Of course, I still believe in cycles. For example, during the Internet bubble, everyone thought that the Internet was over, but after a cycle, a few leading companies persisted for a long time, and then some new applications emerged in the entire industry. However, the few leading companies that persist will still thrive in the global asset class and continue to create value for the world.
[0xUnicorn🦄 Unicorn]: Binance has also surpassed 200 million users. The total market value of U.S. stocks is now more than 50 trillion, and the crypto field is 2.8 trillion. If compared with U.S. stocks, the entire crypto industry still has a lot of room. Binance has "half of the industry", so it should also take some responsibility and bring fresh blood to the entire industry. What new plans does Binance have in the future to attract more users to the cryptocurrency field?
Yi: I think Binance has been trying to do this. The world has a large population base, and we hope to let them know about Binance and cryptocurrency, and it would be best if they really spend time to understand what cryptocurrency is.
Sometimes the projects launched on Binance are not necessarily of very high quality, but we pay more attention to whether they are really valuable in the long run. For example, we have launched a project that was ridiculed by everyone before. We have done research. It is similar to the user profile of this project that does not look like a typical cryptocurrency investment user. But in fact, in this process, we want to see if there is an opportunity to run an application that can really change the lives of ordinary people and build a real business model. This road is definitely a long way to go.
Of course, it doesn’t mean that all investments are effective. Many people will say that Binance signing Cristiano Ronaldo doesn’t help them. Indeed, Cristiano Ronaldo doesn’t bring us that many registered users or trading users, but at least we let more people in the world see Binance and Web3. There is a concept in advertising that you will become interested in an advertisement after watching it ten times. Our industry may be more difficult, but someone has to do these things. Although there will be some ridicule and failure in the process, I think as long as you have a clear goal and think clearly about what you are doing, you should move forward firmly.
[K-line Master]: Since I am in Europe now, I want to know what plans Binance has for subsequent development and embracing regulation after the settlement with US regulators? Will this settlement have any impact on Binance's development in Europe?
Yi: I think it still has some impact. Traditional finance has a history of hundreds of years, and its regulatory system has been built up step by step like building blocks. They see cryptocurrency and claim to "overthrow traditional finance". Isn't that a scourge?
In this case, Binance, as a leading company in the industry, will also face more pressure and challenges, but I think there will be a future direction judgment. Many people think that decentralization can solve all problems. There is nothing new under the sun. The overall development of the network is heading in two directions, one is the dark web and the other is the Internet. But no matter where you are, your Internet information is being observed. The Internet still makes the lives of ordinary people better to a certain extent and improves the speed of information transmission around the world.
The blockchain industry will also face such challenges, and different regulatory regions around the world are already taking drastic actions. If our industry really wants to serve 1 billion users, I think we still need to cooperate with regulators, build consensus and trust, and find a way to survive. When others think that an industry is hippie, you can say that you are anti-financial and anti-traditional; when the industry reaches a certain scale, others will think that this group of people should still be the same hippies as before, but as a more mature industry leader, we must know how cryptocurrency can help the world become better, how to better complement the existing financial system to make the existing financial system more efficient, and how to better coexist peacefully with traditional finance. This is our own thinking and direction for this matter.
There will inevitably be challenges in this process, but as long as your team is strong and your strategy is correct, you may face periodic challenges, but it will not affect your long-term greatness. We hope to seek coexistence. I think other companies in the industry have a lot to learn from. This industry is still in its very early stages. I hope we can work together to make this pie bigger.
