Original author | Keegan Xiaogang
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My first startup in Web3: From building a DEX team to running out of funding
Disclaimer: This article is a reprinted article, authorized by the Wu Blockchain. Readers can access more information via the original link. This reprint is for informational purposes only and does not constitute any investment advice, nor does it represent the views or positions of Wu Blockchain.
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I reviewed the technical content I had produced over the past few years and clarified my future direction: I would no longer focus solely on "explaining the technology," but rather, from a Builder's perspective, I would review the projects I had done in the past and record the process of new projects that I would personally try next—not just talking about "how to write the technology," but also "how to get things done, or how not to get them done."
This retrospective will begin with my earliest Web3 startup in 2018. That was the first time I dedicated myself full-time as a Builder to an on-chain project.
It was an experience filled with hope, yet ultimately ending in disappointment. From the peak of the bull market to the arrival of the bear market, from high team morale to a broken funding chain and project dissolution. Although it ultimately failed, it allowed me to truly stand at the heart of Web3 for the first time.
This article is a retrospective of that entrepreneurial experience. It marks the beginning of my "project-driven content output" approach and I hope it can provide a real-world perspective for those of you who are on the path of Web3 Builder.
starting point
This experience began with a friend's recommendation.
In the first half of 2018, a friend who had previously worked at "Heima"—someone I had met when I was invited to give an offline technical presentation—contacted me. At the time, I was in Guangzhou, and he was in Shenzhen. He said he was working on a decentralized exchange (DEX) project, developing a DApp based on the Loopring protocol, and wanted to recommend me to come over and talk to see if there was a possibility of collaboration.
What attracted me to this project wasn't just the "blockchain" label. What truly captivated me was its strong overlap with three areas I was interested in at the time:
First, the focus is on DEX, which belongs to one of the core blockchain sectors ;
Second, the underlying layer uses the Loopring protocol, which was considered an advanced DEX technology solution at the time .
Third, they wanted to find a technical lead who understood mobile development, was familiar with product implementation logic, and had full-stack app capabilities—which was exactly my skill profile at the time.
At that time, I had already made up my mind to devote myself to Web3 and was looking for a suitable entry point. This project came at just the right time, giving me a feeling that "the time has come".
So I used my weekend to travel from Guangzhou to Shenzhen and meet with the person who initiated the project.
The founder is a 90s generation individual who previously worked as an Android developer. After making a considerable amount of money through cryptocurrency trading, he began planning his own blockchain project. He was a strong believer in Loopring, having participated in the early token issuance and holding a significant number of tokens—a true die-hard fan. Therefore, he wanted to create a DApp based on the Loopring protocol, even choosing a similar product name: Loois .
Overall, I had a good impression of him: he was down-to-earth, had a strong drive, and was quite courageous. Although he lacked management experience and product background, these were precisely the areas I could fill.
In addition, it was a bull market at the time, and the company had a profitable business line that did not require financing at the moment, so there was no pressure on its finances.
At that moment, I felt: the direction was right, the people were reliable, and the gap was exactly what I could fill. I was willing to give it a try and see if this idea could really be made a reality.
We talked all day, and in the end I decided to join as CTO and become a partner by contributing my technical expertise as equity.
Team building
After officially joining, I didn't give myself much of a transition period. Instead, I quickly took on the role of CTO and started building product and technology teams.
Prior to this project, I had led several small R&D teams and participated in the entire process of building systems from scratch. The challenge this time was that we not only had to start from zero, but also explore product implementation in a completely new arena—Web3. Time was tight, the workload was heavy, and there was almost no room for trial and error.
I spent a week establishing the basic technical direction and architecture, while simultaneously starting to recruit and build a team. At that time, remote work was not yet widespread, and in-person work was the absolute mainstream. To minimize commuting time, I rented an apartment in the neighborhood across from the company and brought my family and children from Guangzhou. My life and work were almost "zero commuting," which allowed me to fully dedicate myself to the project.
When assembling the team, I was keenly aware of the tight schedule and the need to quickly build a highly efficient and collaborative technical team. The core members primarily came from three groups:
Most of them are excellent subordinates I've trained before. They are familiar with my management and work style and can quickly get into the swing of things.
• Some are outstanding colleagues I've worked with before, possessing rich experience and abilities;
In addition, I have selected some outstanding talents from my WeChat official account followers, hoping to bring fresh perspectives and vitality through them.
Through these channels, I am able to quickly identify trustworthy and capable core team members, ensuring team quality and execution.
My team building strategy includes three key points:
First , quickly identify core members to ensure a solid foundation for the team;
Second , precise role matching and division of labor : based on project requirements, key positions such as product manager, mobile developer, front-end developer, back-end developer, smart contract developer, and tester are clearly defined, and responsibilities are reasonably allocated.
Third , create efficient collaboration processes , promote flat communication and agile development, use project management tools to track tasks, and ensure information transparency and rapid feedback.
Using these methods, we built a team of over 20 people in a very short time, covering key positions such as product manager, UI designer, mobile developer, front-end developer, back-end developer, smart contract developer, tester, and operations and maintenance. Even in today's startup environment, this speed is still considered very rapid.
The team is highly capable and energetic. From day one, a clear collaborative rhythm was established: I led the breakdown of product direction, the development process was divided into modules, project management was tracked using tower.im, with weekly synchronizations and flat communication throughout the week.
What I'm most satisfied with is that, although the team was only recently formed, its execution is extremely strong and the integration cost is very low.
Under these circumstances, we completed the development and launch of the first version of Loois in just one and a half months.
Looking back, this was the fastest-paced and most exciting phase of the entire project.
Highlights
To mark the official launch of Loois, we also held a small launch event, inviting some friends and media from the industry. Although it wasn't a large event, over two hundred people still attended, almost filling the venue. We also simultaneously launched a live stream online, attracting over ten thousand viewers , which was considered quite a lot of buzz for a blockchain project at the time.
As the CTO, I took the stage to give a comprehensive presentation, covering everything from technical solutions and product positioning to protocol selection and future roadmap. That was my first official appearance as a Builder in a Web3 project.
To more systematically explain our vision and mechanisms, I personally wrote the project's white paper , which covered Loois's business architecture, business model, economic model, and future development plans. At the time, we did indeed paint a very ambitious picture: not only would we integrate with Loopring, but we also planned to integrate with multiple protocols such as 0x and R1, and achieve cross-chain transactions, with the goal of becoming a decentralized transaction aggregator —which is actually very similar to the aggregated transaction experience provided by the OKX Web3 wallet today.
But while the promises were promising, our product iteration speed and quality were truly impressive . The team adopted a bi-weekly iteration rhythm, releasing a progress update every two weeks to ensure the community could continuously see the project's evolution. Loois's user interface and interactive experience were outstanding among similar products at the time, earning high praise from many early users.
The Loopring official team recognized our product and invited us to participate in their 2018 Digital Economy Summit as an ecosystem partner, giving us greater industry exposure. Later, they also made a small investment in us using their project tokens. Although the amount was small, it was both a financial supplement and an "official endorsement" from the upstream protocol for us.
Subsequently, I was invited to participate in several industry salons and private board meetings, which allowed me to connect with more blockchain venture capitalists and expand my early network in the Web3 community.
The investor who impressed me most was Jiang Haibing , known in the industry as " Old Rascal ." He was Alipay's second employee and later founded Duoniu Capital in 2014, focusing on early-stage investments in the blockchain field. We met with him several times, and he expressed strong interest in Loois. Although we ultimately didn't reach an investment agreement, we benefited greatly from those exchanges, gaining a deeper understanding of "how to present a project during fundraising."
This is the most promising stage for the project, and when the team is most confident. Although the shadow of the bear market has begun to loom, we still believe that as long as we develop a product, financing and growth are only a matter of time.
But soon, we will face the backlash of reality.
The backlash of reality
In the period following the press conference, team morale was high, product development progressed smoothly, user feedback was positive, and ecosystem partnerships and media attention were gradually increasing. From the outside, everything seemed to be "moving upwards."
But what we didn't realize was that it was actually at the tipping point of a downward cycle .
Although Loois's product has been launched and offers a better user experience than many similar products, the overall market is gradually cooling down. The bear market of 2018 is quietly approaching—the hype on the blockchain is receding, and investor enthusiasm is rapidly waning.
We weren't anxious at first. After all, the company had other profitable business lines, plenty of cash on hand, and the product had been launched with decent feedback. The general consensus was: "As long as we keep developing the product, funding and growth are just a matter of time."
But soon, reality began to shatter our confidence bit by bit.
The previously profitable business line suddenly started to "bleed".
The business line that supported the company's cash flow quickly cooled down in the early stages of the bear market, with customers being lost one after another and business revenue declining sharply. As for the salaries of our Loois team, they are attached to the entire company system. In other words, our salaries are not borne by the Loois project itself, but are "infused" by other businesses .
Once the blood transfusion capacity weakens, the pressure immediately shifts to us.
Funding difficulties: lofty ideals, but an increasingly cold market.
At that time, we officially started the fundraising process and began pitching to external parties. But reality quickly dealt us a heavy blow.
Many investors still lack confidence in the DEX sector and have limited understanding of the Loopring protocol; while our product has been launched, the number of users is still small, and the data is not yet convincing; the team members' backgrounds do not have the halo of "serial entrepreneurs" or "star technical teams".
Worse still, the entire industry is entering a "capital winter," and investors are becoming extremely cautious. Projects must be highly certain and counter-cyclical in order to gain favor.
After several rounds of pitches, the reasons for rejection we received were remarkably similar: "The project is good, but we're hesitant to invest right now."
Internal Concerns: Unseen Money, Visible Anxiety
Funding was becoming increasingly tight, and everyone started to feel anxious. Some of the members were people I had brought from Guangzhou, and they had all initially treated this as a long-term battle. At first, we could comfort ourselves by thinking, "We'll get the funding soon," but gradually, even I began to doubt that statement.
The founder also seemed overwhelmed. The wealth he had accumulated through early cryptocurrency trading had shrunk significantly due to the sharp drop in cryptocurrency prices. Under pressure, he began to become impatient, and internal communication became increasingly chaotic.
The most typical symptom is: we are still working hard to write code and optimize, but no one can answer "whether we will be paid next month".
It feels like you're driving a great car, the accelerator is firmly on your side, and you're steering the car correctly—but you don't know if there's a gas station ahead.
Things didn't suddenly collapse at some point, but rather slipped into chaos step by step without warning.
First, funds became tight, and salaries were delayed; then, team members quietly updated their resumes and looked for opportunities; later, communication became difficult, decision-making was delayed, and team morale visibly declined.
We tried to "grit our teeth and persevere," continuing to refine the product and seek funding, but at a certain point, we all knew in our hearts: this car really had run out of gas.
From the initial brilliance to the harsh reality, and finally to the realization that you're mired in a quagmire— that's the power of a bear market. It won't destroy you overnight, but rather, like a tide, it slowly swallows up your confidence, resources, and endurance.
This is the harsh reality that many Web3 entrepreneurs experience: they don't die from technical difficulties, but rather from cycle and lack of confidence.
Ultimately, we announced the discontinuation of the Loois project and the disbandment of the team.
Fortunately, at the time, a partner was preparing to launch a centralized exchange (CEX), and they highly valued our team's execution capabilities and collaborative skills, so they proactively invited us to participate in the construction of its core system.
Although the shift from DEX to CEX may seem like an idealistic departure, we all know that at that stage, staying in the industry and doing something practical is more important than anything else.
I accepted the job and began my new Builder journey.
Gains and Reflections
This failure taught me more than just lessons; it also provided me with invaluable experience and insights .
First, I started building my network within the Web3 community. This is crucial in an emerging industry. I began integrating into the circles of core Builders, and these connections proved repeatedly useful in various subsequent situations:
Information exchange and sharing helped me quickly broaden my industry horizons;
• When you need to recruit talent, you can find trustworthy recommendations within the industry;
• When you want to find a new job or collaboration opportunity, you can also directly find internal referral channels.
Secondly, there was a leap in my professional skills . During that period, I not only improved my technical skills in Golang and Solidity, but also began to understand how to write white papers and the design thinking of economic models. More importantly, for the first time, I truly participated in the integration of "on-chain products" and "business logic".
For the first time, I also had the opportunity to participate in industry events as a Builder, communicate with experienced entrepreneurs and investors, and learn firsthand how they understand trends, assess risks, and judge timing. These experiences rapidly broadened my business perspective .
Finally, here's my true understanding of this industry ecosystem. I'm starting to see the true nature of the Web3 world: blockchain, crypto, hype, speculation, ICOs, worthless cryptocurrencies, pyramid schemes—especially in Shenzhen, the entire ecosystem is far more chaotic than I imagined. Web3 has strong financial attributes; during its boom-and-bust cycles, it attracts genuine builders as well as a large number of people looking to make quick money. This is the reality of the industry that we must face.
