Written by: TechFlow TechFlow
Recently, OKX Ventures has completed a number of separate strategic investments and led investments, covering multiple tracks such as gaming, social networking, and Layer 2. Coinciding with the Hong Kong Web3 Carnival, we invited Estrella, strategic business investment director of OKX Ventures, to conduct an interview with us.
Estrella is from the Internet. This interview will cover OKX Ventures’ investment methodology, focus areas and industry views. The following is the full text of the interview.
OKX Ventures’ investment methodology: Fundamentals are an important basis, and community/operations/technological innovation are the focus
TechFlow TechFlow: We understand that Estrella, you previously worked mainly in Internet companies , including Baidu, Ctrip, etc. As the strategic investment director of OKX Ventures , what was the opportunity for you to enter the encryption industry?
Estrella:
I entered this industry in 2017. At that time, I was looking for some growth opportunities in the Internet industry. In the post-mobile Internet wave, Fintech was quite eye-catching, with very diverse interpretations. It was also at that time that I paid attention to the field of Blockchain. Based on analysis and judgment, the Blockchain industry will have a lot of room for growth and explosiveness .
TechFlow TechFlow: In the Internet industry, companies have a financial valuation system or various business data, but in the encryption industry, investment methods are more "diversified". Some people look at teams, some look at factions, and some even Look at the face... In a market that prioritizes narrative, according to your personal experience, what are the main dimensions for investors to judge a project?
Estrella：
We will still focus on evaluating fundamentals, such as the industry, team, financial health of the entire project, and operational plans. These are important basis for us to judge a project.
In addition, the Crypto industry will pay more attention to the culture and operational attributes of the community, especially some technological innovations. Therefore, the community, consensus, and user acceptance will also be considered.
TechFlow TechFlow: In the field of Web3, which development directions and tracks are you more optimistic about? Why?
Estrella:
OKX Ventures actually publishes monthly reports regularly every month. We just released our quarterly report some time ago, which actually details our investment directions, such as infrastructure, Layer 2, Bitcoin ecology, and application fields, such as In fact, we are also looking at Gamefi, AI, and DePIN, and the direction is quite comprehensive.
At its core, we want to find strategic partners who can create synergy with the company. Because we have a complete ecosystem in operation, we hope to make some long-term value investments for both the company and the industry.
TechFlow TechFlow: I have heard many investors complain before that the pace of the encryption industry is too fast. Projects invested in high valuations by FOMO were quickly abandoned by the market, and everyone is pursuing new narratives, even the hottest tracks. It has nothing to do with VC , such as ORDI\MEME, VC is also a FOMO player in this market . Do you have such anxiety? How to solve this problem?
Estrella：
Actually no. There are actually certain driving forces behind this phenomenon, such as the cultural and consensus sense of belonging of some young user groups or similar user groups. Of course, this also lowers a certain investment threshold.
But as an institutional investor, I believe that institutions have their own relatively mature value methodology systems. For example, when we look at projects, we don’t just look at this aspect, we need to have a value anchor. At the same time, I think we still need to strengthen investor education so that everyone has the ability to identify which investments are short-term and which are long-term investments, and have a certain risk tolerance.
I believe that as time passes, high-quality cores will be preserved, and exploration will stimulate healthy development due to collisions.
Solana has its own unique advantages, but Ethereum is still worth looking forward to
TechFlow TechFlow: OKX VENTURES is a staunch supporter of the Ethereum ecosystem. We have seen a lot of investment in the infrastructure of the Ethereum ecosystem. However, this year it seems that the Ethereum ecosystem has once again encountered challenges from Solana and encountered many doubts. What do you think about Ethereum? What do you think about the future development of ecology?
Estrella:
I think Ethereum is still an ecosystem with its own advantages and long-term development. Its technology is constantly iterating and upgrading. As a big ship, every micro-innovation requires more effort than other new projects to achieve.
At the same time, we have also observed that the number and activity of Ethereum developers have never weakened, and a relatively strong ecological moat has been established.
TechFlow TechFlow: We have seen that OKX has also begun to invest in Solana ecological projects, such as Eclipse and io.net . In your opinion, what are the advantages of Solana?
Estrella:
Regarding Solana, of course it also has its unique advantages, such as achieving high TPS, low handling fees, etc., which is friendly to the user experience.
In addition, Solana's community is also continuously being built. Whether it is investors or users, we see that there are a large number of loyal fans in it. Moreover, Solana has gone through some cycles, and there are still many people who continue to build.
TechFlow TechFlow: What impressed me is that OKX VENTURES has invested in Ethereum Layer2 such as Scroll, Taiko, and Zksnyc. However, this year, a large number of Ethereum L2s have been questioned as PUA masters. And due to the rise of Raas infrastructure, it is easy to issue L2 with one click. What do you think of the future competitive landscape of L2? Do we need so many L2s?
Estrella:
I think the competition for Layer 2 is still at a relatively early stage. The phenomenon of a hundred schools of thought contending is very good. It promotes the survival of the fittest, and some top Layer 2s will come out.
At some special application levels, there may also be some specialized "Layer2". As you said, one-click link posting is actually an iteration of development tools. We can see that everyone is constantly looking for efficient ways to solve problems in this ecosystem.
With the emergence of diversification, such as interoperability, some cross-chain projects will also develop accordingly. In the future, we look forward to seeing a truly interconnected state.
There is still a lot of room for improvement in infrastructure, and Web3 is still a blue ocean.
TechFlow TechFlow: According to our observation, this year more and more application-oriented projects have begun to transform into infrastructure and are doing Layer 1. Therefore, many people joke that there are more chains than applications. What do you think of this phenomenon?
Estrella:
This approach is actually healthy competition for Layer 1. We believe that the current infrastructure still has a lot of room for improvement and is far from reaching a saturated state. Everyone is competing fairly and looking for some micro-innovation points to solve problems in certain specific fields.
TechFlow TechFlow: This is actually a bit like Layer3, a customized chain. You just mentioned that the current Layer 1 is far from saturated, so in your opinion, the point of unsaturation in the future is that there will be many customized chains like Layer 3?
Estrella:
I think this is just one aspect, because from a macro perspective, this industry has just begun. The Web3 industry is still a blue ocean industry, and it still has a very broad space for development. Based on this, it is difficult to say what percentage of the market share we have achieved now.
TechFlow TechFlow: MEME is a hot spot that cannot be ignored this year, but it has also brought a lot of "disillusionment". After working hard on technology and making products, a few years of hard work is not as good as a three-day MEME coin. The founder of 0xscope also said He tweeted that DAU\technology\product updates are basically irrelevant to the price. Only the mouse warehouse is more closely related to the narrative. We even saw that some project developers took the initiative to delete product functions and turned them into MEME. What do you think about this? , will it be the norm in the future?
Estrella:
I think this question is somewhat related to the question just mentioned. MEME is suitable for a certain type of group or specific needs, but it does not mean that all entrepreneurs must compete in this direction. Entrepreneurs still need to have their own value system and clear positioning, and know what kind of thing they want to do and what kind of value they want to create.
TechFlow TechFlow: In terms of narrative hot spots, the Eastern and Western encryption markets seem to be somewhat separated. A large number of Bitcoin ecological projects have emerged in the Chinese-speaking encryption market, while the West has responded coldly to this, with more AI+ DePIN. As you can observe What are the preferences of entrepreneurs in various regions?
Estrella:
I think this phenomenon is related to the technological development, cultural attributes, economic development, policy environment, etc. of each region.
If we look at characteristics, for example, the United States is more technology-driven, so the AI track will be more popular ; for Asia, we see more projects that focus on operations and application attributes; for Europe, traditional There will be more projects in the financial direction; for Latin America/Africa, it may be closer to the local life direction, such as Earn , culture and sports , anti-inflation, payment scenarios, etc. The entrepreneur's preferences are in line with the local market and user needs.
TechFlow TechFlow: Since the beginning of this year, there have been a lot of KOL rounds, which has also stimulated many people’s discussions. In your opinion, is this reality healthy? Is it reasonable to set up KOL Round?
Estrella:
I personally think this setting makes sense. The value contributed by KOL is different from that of VC . KOL is doing some operational work for the project, such as community promotion, etc. Because with such an incentive mechanism, these things will be done better. Moreover, in this process, KOL will actually screen projects in reverse. Such two-way selection will also allow some high-quality projects to stand out.
VCs are empowered by VCs, and KOLs are empowered by KOLs.
TechFlow TechFlow: This year, more and more Chinese entrepreneurs are pouring into Hong Kong to carry out project construction. Finally, from the perspective of investors, can you give some advice to Chinese entrepreneurs?
Estrella:
I don’t dare to give suggestions, but just talk about my personal thoughts . First of all , to join Web3, you must fully understand the Web3 industry and fully understand the native mechanisms of Web3, such as consensus mechanisms, incentive mechanisms, community participation methods, etc. Understand the project operation cycle, which will be somewhat different from the traditional Internet operation project cycle.
Secondly, because Web3 itself has significant international features, the team's vision must be broadened and internationalization construction strengthened. For example, the configuration of localized teams in different regions will have higher requirements for entrepreneurs.
Finally, Web3 attaches great importance to technology and operations, and is also an important stage of regulatory compliance; it is necessary to fully understand the industry characteristics of the specific cycle of Web3 and be sensitive to industry opportunities.
