Written by: 0xJigglypuff
The initial capital is as high as 100 million US dollars, and OKX Ventures, which has participated in more than 300 projects in 2 years, has almost hit all the early fundraising rounds of the recent hot projects, such as Arbitrum, zkSync, LayerZero, etc. It can be said that the vision is precise and curious. What is the logic and selection strategy.
At the Hong Kong Web3 Carnival, Jeff Ren, partner of OKX Ventures, appeared on the scene and unveiled the mystery of the VC industry with us. In addition to contacting many front-line developers in the encryption industry, he also analyzed the encryption track, current market conditions, and unique insights into the future in exclusive interviews.
Investing History: From Lehman Brothers to Bitcoin Miners
After graduating from Peking University and Harvard Law School, Jeff Ren has served in the financial industry for more than 20 years. He witnessed the company's collapse when he was working at Lehman Brothers. After experiencing the subprime crisis, he was transferred to the executive director of UBS. Financial elite.
But also because he entered the cryptocurrency circle in the early stage, he finally moved towards the Web3 industry. Beginning in 2013, by chance, he invested in OKX and other exchanges, and tried PoW mining. In addition to studying Bitcoin computing power as a miner, he also encountered some mining machine investment opportunities. Looking back on this memory, Jeff feels that the best thing about the blockchain industry is that there are always many opportunities for continuous learning:
I think I was more like a technology investor in the past, expecting that technology can change our lives, the way we communicate and the way we build... I think Blockchain must be a part of my study now... I am also fortunate to be in my career In the middle stage, you can continue to learn and continue to explore new fields with young and outstanding entrepreneurs and developers.
Looking at the Web3 industry from the experience of the traditional financial circle, what are your special feelings?
Jeff answered that traditional finance and Web3 seem to be binary oppositions, but he thinks that is not the case. The two are actually similar in nature (traditional finance and Web3), and the binary opposition is just a process. He also mentioned leaving the financial industry. The biggest reasons to bet your career on the cryptocurrency industry:
I don't think the two (traditional finance, Web3) are necessarily opposed or different. For those who believe in Bitcoin technology, they insisted on their beliefs back then, but today they have become a vast industry. I think the entire industry is still on the rise. Like various Fintechs, this is an intermediate period of exploration. There are many doubts, struggles, and confusions. Just like the early Internet or mobile phone innovations, it takes a longer time to verify.
I feel very lucky to be able to serve the top organizations in the world's top tracks. Since I joined OKX, the industry has undergone many changes, but I have persevered to see the harvest. I told my team, colleagues, and partners that I can now be very proud to tell my parents Talk about your industry.
Analysis of the current situation and future of the cryptocurrency industry
Bull and bear market? unimportant
Since its establishment in 2021, OKX Ventures has been in a bear market most of the time, but Jeff believes that the bull-bear market cycle itself is not very important, because the bull-bear concept is very subjective, and from the perspective of VC, it may be different from what most people think. The only thing that is certain is that construction cannot be stopped. Only from this point can we continue to move forward, and we don’t need to pay too much attention to the interference of bull and bear markets.
For bulls and bears, we are still relatively objective, because the current bear market may look very bullish since 3 years ago.
Our bulls and bears will not be based on the prices of certain mainstream assets. We focus on the data on the chain, or pay attention to the status of our friends in the investment and ecological circles. We will continue to see new projects and new ideas appear, so we say It’s always spring hahaha, we won’t focus on returns in the short term, what’s more important is empowering innovation…..
Bull and bear markets are relative. If the price of the main encrypted assets (BTC and ETH) rises sharply for a period of time, the proportion of the overall encrypted assets is stable (that is to say, the prices of small currencies also rise), plus the number of active addresses and transactions If the volume rises and remains stable, public opinion and the community will regard it as a so-called bull market.
The L2 track is an important key to the next round of the market
When talking about the big narrative and big hot spots of the next round of bull market, Jeff believes that after the upgrade of Ethereum Shanghai, there will be Cancun upgrade, and many emerging tracks such as DA, Raas, etc., and Layer 2 will be the key, and the future must be in Focus on product experience and lowering the threshold, the next wave of bull market is bound to usher in large-scale popularization of the industry:
And Layer2 helps Ethereum solve the scalability problem, which is a strong deterministic track. Layer1 and Layer2 are not just competing, but mutually reinforcing. We have invested in many stars such as Arbitrum, Scroll, Starkware, zkSync, Taiko and Metis Layer 2 items.
The recent Ethereum Shanghai upgrade, or the upcoming Cancun upgrade, may benefit the diversification of Layer 2, the development of the DA layer (data availability) and the Raas (aggregation as a service) track... With the improvement of infrastructure and technological innovation , It is expected to improve the Web3 product experience and lower the threshold. The next round of bull market will attract more people and funds, and the scale of the industry will continue to expand.
Source: OKX
Among the projects that OKX participated in, OKX Ventures also invested in a large number of Zero-knowledge Proof-related public chains and protocols. Jeff said that OKX itself has invested in its own ZK laboratory because they feel that the current DeFi has a lot of trust The problem needs to be solved by Zero-knowledge Proof(zk).
Wallet is the key to the "mass popularization" of Web3
Wallets are seen as the entry barrier to the blockchain, and Jeff emphasizes the design of cryptocurrency wallets. He talked about the problems of the current mainstream wallets, and hoped that after the wallets are improved in the future, they will be able to promote the large-scale adoption of the industry:
The biggest problem with the wallet is that it is not very easy to use. Let’s solve this problem. There will be Seed Phrase and security. The OKX Web3 wallet can be accessed by email. In terms of user experience, it is the same as the traditional web2 moblie app. It's seamless, and the user doesn't feel like he's using something weird and messy.
The OKX Web3 wallet is also Multichain. For some novice users, he may not understand it. He thinks that there is only one chain in the blockchain. He wonders why I can’t receive your things when I give you an address. This is where the threshold lies. On the first day of our promotion, compared with Metamask, the Multichain user experience has been greatly improved, so one is easy to use, and the other is easy to understand. Expanding the possibility of future Cross-chain asset Defi and unified protocol application scenarios, we In a very short period of time, 500, 600 support items have been added.
How to help the Web3 industry as a VC
As a VC, Jeff talked about his work content, saying that he usually dives in the Gitcoin forum of the Ethereum development community, and has long served as an Advisor in it, discussing with industry professionals how to increase the influence of the project in Asia force. Jeff emphasized that OKX Ventures is a centralized organization and can play a limited role in the Web3 industry. Therefore, it is very important to keep a distance from the project party and help them as much as possible without interfering:
We are members of Gitcoin DAO, the world's largest Ethereum development community, and I also play an Advisor commitee in Governance. I usually discuss with Gitcoin founders how to work together to increase the presence and influence of the Asia-Pacific region, and how to give more Can the Ethereum development community, how to find more meaningful projects, how to recruit and attract more developers to participate in the construction and promotion of these projects. We must be very humble during this process. We want to know how to help as a centralized organization. We often say "help without adding chaos". We pay attention to our positioning and will not cross the boundary and push too much.
VC’s usual work, in addition to getting in touch with people from various projects, also has to hold different activities to attract more projects. Most of the time, the activities do not only include OKX itself, but follow the development of many public chains and projects. Activities together, humbly participate and be part of the builders in Web3:
Infrastructure, NFT, GameFi, DAO... etc., we have made layouts, invested in establishing partners, and held hackathons, dev con, demoday and other similar activities, not only the OKX Ventures team, but also our public like Chain team, wallet and other Product Team.
We are a connector to connect the industry. Externally, we are OKX's business card and the role of industry representative. We rarely say how much carry (dividends) we will have at the end of the year.
Tips for Web3 developers on how to get started, seek funding
With the Web3 Carnival held in Hong Kong, Chinese projects are also focusing on seeking funds here. Jeff took the opportunity to encourage new venture teams, such as emerging project parties, should understand the pain points of the industry and user problems at a basic level, and he emphasized that the new team and VC itself communicate with each other:
If developers read the Whitepaper and feel that they have enough knowledge of a language or public chain, and want to build applications on it, they should look for ones that can be on board, have the most users, and can solve some pain points. From security Whether it is good in terms of reliability, reproducibility, or cost reduction, if there are certain breakthroughs (projects) in this area, such projects will definitely come out. I still want to tell everyone "It's only the beginning", you are learning, we are learning, you can guide us, educate us, if we do our job, we will appear.
Regarding the funding part, you can participate more in our (OKX) activities, meet developers, and contact Layer 1 foundations. We have regular contacts and meetings with almost all large-scale foundations, so they will not be buried. AMAs available on twitter Ask more questions and participate more.
Interestingly, in the chat in Hong Kong, Jeff also answered some sensitive questions. For example, most retail investors have a stereotyped impression of VC, much like a big market dealer who takes the cheapest tokens in the early stage and waits to unlock them. Finally, when the price rises, the goods will be dumped as soon as possible, so that the rate of return can be quickly pursued.
To this narration, Jeff responded to us with a smile. He thinks this is not the case, because VCs must grow together with the project to survive. He also emphasized that OKX Ventures is not a traditional financial investor and does not need to be an external investor. Responsible, so most of them are long-term investments without pressure to recoup funds:
OKX Ventures focuses on long-term structural value investment. The industry cycle has no direct impact on our investment projects. Our investment is not purely for financial returns, so we are not financial investors in the traditional sense.
OKX Ventures is a Corp venture under OKX. It manages OKX's own funds by itself. We don't have the pressure of return on investment and capital reuse. We never care about external funds, all of which are 100% OKX’s own funds, and we don’t need to raise funds for LPs. This is different from the investment institutions outside. We prefer to play the role of an entrepreneur or empowering entrepreneurs rather than Venture capitalists who pursue high risks and high returns.
Hong Kong vs. Singapore
Looking at the opportunities and opportunities of the current "Hong Kong environment" often compared with Singapore, another Asian financial center, what is Jeff's understanding of Hong Kong issues?
Jeff responded that from the perspective of the real economy and talents, Hong Kong does have many opportunities to surpass Singapore:
Basically, the economic foundation cannot be bypassed by China and the United States. Only with the economy can there be enough talents. In this regard, the size gap between Hong Kong and Singapore is huge. Everyone knows that Hong Kong’s capital market and stock market are larger than Singapore’s. 9 times that, not to mention the depth.
There are also demographic dividends and potential market size. Hong Kong is far from being a small window for the mainland. Now it is more about attracting back excellent companies and projects from the mainland that have left due to past policies.
The Hong Kong government uses the words of Web3 to attract the largest group, and from the perspective of anti-money laundering in the most cautious way, to accept Crypto and precious metals that were not under the supervision of the SFC in the past. I think this is very wise, and we also Looking forward to the introduction of detailed rules by the Hong Kong government, we are optimistic and wait and see.
Be on the lookout but not be afraid of the "Lehman moment"
In addition to the Hong Kong issue, at the end of the interview, Jeff had a deep understanding of the recent overall economy and monetary economy. He believes that the current global economic landscape is very pessimistic, and he even has a lot to say about the thunderstorm incident of crypto-friendly banks :
It’s sad, it’s disappointing, everyone calls it a “Lehman moment” when something happens, unfortunately I’m really from Lehman. Everyone still remembers that weekend, the U.S. regulatory agency issued a letter stating that it would save Silicon Valley and that it would also take over Signature Bank, which was a very helpless result for us. The Wall Street Journal said that the United States bought everything else and let Lehman go bankrupt. I would think "why me" and "what's the matter with me", why should the Signature Bank be damned? Thanks to the efforts of the community, we still haven't shed the burden of history, and I certainly hope this will give everyone a chance to start over.
Jeff pointed out that Bitcoin is a product of a new era that emerged due to the financial tsunami, and it is a pity that it is still constrained by traditional finance today. In addition, he also looked at the future economy with a cautious and pessimistic attitude, talking about geopolitical fluctuations, and the impact of some national policies is far-reaching, even to the verge of getting out of control.
There are also big problems in the United States. The political responses of the two parties to social issues are becoming more and more extreme. The general election has also divided the crowd. The commercial field has been greatly affected, so it is not convenient for China to comment haha.
