Author: Marco Manoppo & The Launchy Team
Compiled by: TechFlow
Hello everyone,
We are currently in the process of launching our new podcast and while it’s still a little while in the works, I recently had the opportunity to interview two good friends and investors.
So please enjoy these last two episodes of Chain Venturer v1 - v2 will be released once we have everything ready. Here's a little sneak preview :)
Have a great weekend everyone. ——Marco
Fiona Ma from DWF Labs
Fiona Ma is a senior advisor at DWF Ventures , the venture capital arm of DWF Labs . DWF Labs is a new generation Web3 investor and crypto market maker that is one of the largest high-frequency cryptocurrency trading entities in the world, trading spot and derivatives on over 60 top exchanges.
Fiona has had an outstanding career in Web3 and traditional finance. Since early 2023, Fiona has been working at DWF Ventures, managing the firm's venture investments. Her responsibilities include conducting research, scouting for promising founders, and conducting investment evaluations to support investment decisions.
Before getting involved in Web3, Fiona started her career in traditional finance, where she gained extensive experience in private equity and Goldman Sachs investment banking. Her areas of expertise focus on growth investing and mergers and acquisitions, mainly covering industries such as TMT, consumer and retail, and financial institutions.
Fiona received her BBA from the Stephen M. Ross School of Business at the University of Michigan. Prior to college, she competed for eight years on the Hong Kong swimming team.
The following is my interview with Fiona Ma .
Quick points:
DWF Labs is a powerhouse in crypto trading, market making and investing with over 700 portfolio companies.
Finding the right balance and designing a stable and reasonable token unlocking plan is crucial to solving the current high FDV and low circulation situation.
While token-driven venture capital models have dominated the space to date, Fiona expects that the number of private equity deals may gradually increase as the crypto industry matures.
The relationship between infrastructure and decentralized applications (DApps) can be likened to the relationship between the chicken and the egg. Without high-quality DApps, a good blockchain cannot be built; similarly, without a good basic blockchain, high-quality DApps cannot be built.
As hair pulling becomes more complex and requires a higher level of expertise, Fiona anticipates that the number of regular participants in these hair pulling activities may decrease.
P.S. The following passages are not verbatim quotes. These are paraphrases of our conversations, adapted to fit the written media format. In the process, some context and nuances may not have been accurately conveyed.
The author of this issue is not responsible for any misinterpreted content in this issue.
All information provided by this publication and its affiliates is for educational purposes only and should not be considered financial, legal, investment or any other form of advice.
What was the defining moment that drew you into the world of crypto?
Fiona’s crypto journey began during the DeFi Summer of 2020, when she first began exploring cryptocurrencies such as Bitcoin and Ethereum. This exploration led her to try various decentralized finance (DeFi) protocols and found the entire space extremely fascinating.
Defining Moment: In 2021, Fiona was working for a private equity family office with $7 billion in AUM. In addition to traditional Web2 investments, she began exploring crypto opportunities for the firm. Inspired by her senior crypto boss, who had built a considerable fortune through early investments in Bitcoin, Fiona decided to dive deeper into the crypto space. With her experience in private equity and venture capital, Fiona has joined the crypto venture capital space since 2022. She currently works at DWF Ventures and continues to explore the vast possibilities of this industry.
What is DWF Labs?
DWF Labs is a well-known market maker and multi-stage Web3 investment company, and one of the largest high-frequency trading companies in the world. Currently, DWF Labs conducts spot and derivatives trading on more than 60 leading exchanges. With more than 700 portfolio companies, DWF Labs is experiencing rapid growth and expansion.
DWF is primarily known for its market-making services, but it also offers an RFQ (Request for Quotation) platform that facilitates over-the-counter trading in liquid markets. In addition, the company has a venture capital and incubation arm that focuses on early-stage investments, especially at the seed and angel round stages, and takes a selective approach to late-stage investments. While DWF Ventures is not limited to a specific industry, it tends to invest in the consumer and DeFi sectors.
What do you think about the phenomenon of low circulation and high FDV? Do you think different funding models like private equity are needed for consumer crypto products that are not suitable for traditional venture capital?
Fiona believes there is no absolute right or wrong because issues often have multiple perspectives.
On the one hand, the community has expressed concerns about the high FDV and low circulation seen in many crypto projects, especially since Q4 2024. This is understandable, as these characteristics may make projects more vulnerable to price manipulation and selling pressure. At the same time, the altcoin market has not fully recovered, and the highly anticipated token launches of some large infrastructure projects have failed to meet expectations.
As a result, retail traders have become more cautious about these high FDV and low circulation projects. More and more traders seem to be leaning towards more liquid projects whose tokens are fully or mostly locked, as this is theoretically considered more resistant to manipulation. Looking ahead, more venture capital firms may also reduce their interest in high FDV and low circulation projects and instead seek investment opportunities at earlier stages with lower valuations.
On the other hand, Fiona also believes that large-scale token unlocking in the early stages of a project may be problematic, especially for long-term projects that require continuous team commitment and community contribution.
If a project front-ends a large portion of its token incentives in the early stages, later users will often receive significantly smaller rewards. This can make it difficult to attract new participants in subsequent stages. In addition, if the project team is able to unlock their token allocation too early, their motivation to continue to commit and contribute to the project may weaken. Therefore, finding the right balance and designing a stable and reasonable token unlocking plan will benefit the long-term sustainability of the project.
Compared to the token-centric crypto venture capital model, Fiona believes that the private equity approach may be more suitable for equity-centric crypto business models. EigenLayer's acquisition of Rio is a typical example of a private equity acquisition model. Although the token-driven venture capital model has dominated the field so far, Fiona expects that as the crypto industry matures, we may see more and more private equity transactions.
What are your thoughts on investing in consumer-oriented crypto projects, given the challenges in this space?
Looking ahead, DWF Ventures is targeting more consumer-oriented opportunities. Fiona mentioned that most infrastructures are currently homogenized, resulting in smaller returns on investment. Despite the surge in the number of Layer 1 and Layer 2 chains, most chains lack widely used applications. This makes it challenging for these chains to scale and gain wider adoption. Therefore, the crypto industry needs more excellent consumer applications to attract organic users and liquidity.
Fiona pointed out that the relationship between infrastructure and decentralized applications (DApps) can be likened to the chicken and egg problem. Without good DApps, a good blockchain cannot be built; similarly, without a good basic blockchain, good DApps cannot be built. For example, Arbitrum's leading position as an L2 solution is largely due to the adoption of GMX.
DWF Ventures believes that consumer-facing applications will be the biggest winners in this cycle . When the next wave of ordinary users participate in the crypto industry, the applications they use every day will capture most of the traffic and attention.
For example, Telegram is one of the largest social and messaging platforms in and outside the crypto industry. This provides an opportunity for consumer projects built on the TON ecosystem to attract users simply by staying on the Telegram user interface. TON can help consumer projects achieve mass adoption through Telegram's powerful distribution channels, similar to China's WeChat mini-programs. This can be verified by the rapid growth of Notcoin and Catizen to millions of users. Therefore, DWF Ventures sees great potential in this type of consumer DApps.
What are your thoughts on airdrops and their impact, especially in light of recent criticism? Are you more bullish or bearish on them? Do you think we’ll see more projects take radical anti-Sybil measures?
Fiona observed that airdrops play an important role in the crypto ecosystem, especially as a marketing strategy to attract users to participate in protocols. However, many retail users may become more disappointed, especially after realizing that some of the protocols they participated in did not provide as many airdrops or full transparency as they hoped. As mining becomes more complex and requires higher expertise, Fiona expects that fewer retail users may participate in these mining activities.
Regarding LayerZero's anti-Sybil mechanism, Fiona sees it as a valuable social experiment. Although there are different opinions on their methods, she recognizes their innovative efforts in this field. She emphasized that the true measure of a project's success lies in its ability to create products that users truly find valuable, rather than relying solely on airdrops and promotional strategies. Ultimately, sustainable growth in the crypto space will depend on building real utility, not just attracting attention.
What do you think of Bitcoin ETF in Hong Kong?
Fiona is positive about Hong Kong’s wider crypto ecosystem, not just the Bitcoin ETF in Hong Kong. She noted that crypto adoption in Hong Kong is becoming more and more popular, with crypto-related ads and posts everywhere in the city. The government’s supportive attitude is reflected in the approval of the Bitcoin ETF and the provision of grants to Web3 companies.
She also mentioned that DWF Labs has sponsored the 2023 and 2024 editions of the Hong Kong Web3 Festival and noticed a significant increase in attendance this year. In particular, industry leaders such as Vitalik Buterin and many Western ecosystem founders came to Hong Kong and spoke at the event. The participation of major ecosystem projects in the main conference and side events shows the region's growing investment in resources, time and energy.
Fiona therefore sees these developments as positive signs for Hong Kong’s crypto ecosystem, although she acknowledges that regulations may change over time. She remains cautiously optimistic and looks forward to seeing how the situation evolves.
As one of the holders of Pudgy, what advice do you have for other NFT founders who have been struggling?
A well-developed intellectual property (IP) with a unique background story, character or theme can give NFTs higher perceived value and collectibility, just like the value driven by Disney's IP in Web2. With the efforts of the Pudgy team, the Pudgy Toys series is now available in major mainstream retail channels such as Walmart, Toys R Us and Amazon, marking an important step in the mainstream adoption of Web3 based on IP.
The community always comes first - which is not easy. Pudgy Penguins often invests a lot of time and resources in various offline events in different cities such as Hong Kong, Malaysia, Singapore, etc. In addition, Pudgy Penguins CEO Luca Netz constantly interacts with community members on X and other platforms. This level of participation is remarkable. When Fiona talked to him, he was very friendly and made her feel that she was a respected holder, not an ordinary holder.
The personality and charisma of the founder are also crucial. For example, despite past controversies, Azuki founder Zagabond still has a strong following due to his charisma and the trust of the community. As a founder, you need to be a spokesperson and know how to go to market effectively - this logic applies to all projects in the crypto space. For example, Sreeram of EigenLayer is an excellent speaker and often appears in conference talks, showing the importance of the founder's presence.
Additionally, providing benefits to the community can enhance engagement and satisfaction. For example, Pudgy Penguins received several airdrops from infrastructure projects such as LayerZero and ZKSync, which was very appreciated.
Quick Questions
What is something every aspiring investment professional should read/watch?
From Zero to One: Notes on Entrepreneurship, or How to Build the Future - by Blake Masters and Peter Thiel
What was your biggest investing mistake?
Invested in the wrong meme coin. Fiona’s liquid asset portfolio is mainly BTC, ETH, and the Altcoin and meme coins she is very optimistic about.
What is the most underrated use case for cryptocurrency?
One of the most common yet underrated use cases of cryptocurrency is decentralized payments. While it may not be the most exciting story, it is life-changing for many people, especially in some developing countries, by enabling decentralized and borderless money transfers.
What is your most unconventional opinion in crypto right now?
It can be said that this is no longer an anomalous view. Fiona began to regularly invest and support TON tokens in the early days when TON was not widely noticed.
What are the biggest risks facing the crypto space?
Regulatory uncertainty in decentralized finance (DeFi).
