Moderator: Blair Zhu, Mint Ventures
Guest: Lydia Chiu, VP of Business Development of Ava Labs
Blair: Hello everyone, and welcome back to Web3 Founders Real Talk. We're here to bring you an exciting conversation with Web3 industry leaders. We're very excited to have Lydia, Vice President of Business Development at Ava Labs, on the show today. Welcome to the show, Lydia.
Lydia: Thank you Blair. I am very happy to be here and I am looking forward to our discussion today.
Lydia Chui experience introduction
Blair: Thank you for coming. Please introduce yourself first. How did you get into crypto and how did you join this project?
Lydia: Of course. I started my career on Wall Street, like many people who end up in the Web3 space. I originally worked for Credit Suisse, a large investment bank, which, as far as I know, probably didn't seem to exist anymore last year. I have worked on the buy-side for 10 years, investing in Internet, fintech, software services and gaming companies. In fact, it’s a lot of what I’m focusing on right now, which we’ll cover in a moment. Then when I got involved in the Internet industry, I discovered Bitcoin in 2013. At that time, it was viewed as an alternative payment network, a virtual currency used for payments. It hasn’t really been viewed as a store of value yet. It is decentralized. This is what happened at the time. So even though I started my career on Wall Street in 2007, right before the global recession, it was kind of a breakthrough idea to think, maybe there's a way out here. I didn’t move into the cryptocurrency industry at that time, but I started paying attention. It wasn't until 2015 that Ethereum released a white paper, early mining, etc., which introduced programmability to on-chain assets and made assets and value programmable. I was very excited. Because that's when I discovered that automated programs could execute trades and you could move value without the human oversight that traditional financial markets currently require. At that moment, I realized this was a lot more interesting than the job I was doing. I started digging into the industry while I was still working and spent a lot of time reading white papers. It wasn’t until 2018 that I really got into cryptocurrency, what I call Web 2.5. I joined a secondary market and they no longer exist. They were called SharesPost at the time and were later acquired by Forge Global. It was in the ICO bubble of 2017, and there were a lot of fundraising activities, and the question was, could these be regarded as securities? The first goal of SharesPost's launch of the digital asset department is to establish a compliant market that utilizes existing brokers and alternative trading systems. Their alternative trading system is a trading platform that operates outside of traditional exchanges. The second thing is to establish a global settlement network to connect brokers and other institutions around the world to achieve cross-border transaction settlement. At that time we were also planning to build this network on Ethereum , and that was an interesting story as well. But in 2019, I realized that a lot of work needs to be done on the regulatory side, including updating registration information and allowing regulation to accept digital assets. I realized I didn’t want to continue doing this job. Then the opportunity came up to join Ava Labs, and I jumped at the chance. For me, what is more interesting is working on the actual blockchain level, Layer1. Because like I said, we were trying to build a global settlement network on Ethereum, but we found a lot of obstacles related to the Ethereum technology that was available at the time. We can discuss this in detail. This is a long introduction.
The Origin and Mission of Ava Labs
Blair : Wow, I love your story, especially about how you got into cryptocurrency and discovered that this concept was really promising. I've heard many stories, but I like your version. We all know that Ava Labs is a widely recognized project, and everyone wants to know some behind-the-scenes stories. How did you discover it? How did you set up this project? Can you tell us a little bit about how your funding team originally set up this project? What was the thought process like?
Lydia : I wasn’t involved in the earliest stages. I joined in early 2020 when the team was still relatively small and we worked out of a coworking space in Brooklyn, pre-COVID. A group of us work in this shared office space from Monday to Friday, coming and going and collaborating face-to-face. Looking back now it seems a bit incredible that we have gotten to this point. Looking back, because I was not involved in the earliest discussions, I will speak based on what I know now and our previous discussions. Avalanche 's mission is to digitize global assets. Considering that our founder Emin Gün Sirer and COO both have a background in distributed computing, combined with the situation at the time, I think it started with a strong personal intention to build a system that can handle the activities and loads required for the digitization of global assets. Network, therefore, we need a solution that is fast, low-cost, more secure and reliable, more decentralized and more fault-tolerant. Combined with the Avalanche consensus mechanism that was being innovated at the time, we came up with the idea of building a network using the Avalanche consensus. That's the impetus for the project. We are still working to digitize assets around the world, but progress is slow and can only be done one asset at a time.
Challenges facing Ava labs
Blair : The entire Layer1 field is very competitive, while the entire Web3 cryptocurrency field is dynamic and fast-paced. We've been seeing different emerging stories and trends for weeks and months. We would like to know how you effectively manage and lead these trends as a pioneer in this field? Have you faced challenges, resistance, or adversity along the way?
Lydia : Avalanche was launched in September 2020. It has now been three years and the anniversary of the mainnet launch is approaching. A lot has happened since then and we have witnessed a lot of changes. In addition to Avalanche, many Layer1s have appeared. Now Ethereum is moving from proof of work to proof of stake, many Layer 2s have emerged, and many new technologies have entered the market. From our perspective, we always strive to achieve our mission and constantly strive to innovate to provide Avalanche with tools and technologies that enable tokenization and smart contract writing for any application and asset. While there are various narratives, I personally and many people at Ava Labs believe that the overall market size is still small. Competition may be fierce, but before we fight for all share, let's make the entire market bigger. It’s something I’ve always pushed myself to do. How many people are there in the world? How many Internet users are there? Web3 can sometimes feel like an echo chamber.
Ava Labs’ current focus
Blair : Yeah, I feel the same way. It's still in its infancy, maybe we need to give it more time. Once we have more technology and applications, maybe mainstream adoption will happen, but that's not the time yet. Can you share what the current main focus of Avalanche and Ava Labs is? You have always emphasized that your mission is to digitize world assets, and you seem to hope to put more assets on the chain. Please tell us about your current concerns.
Lydia : Yes. There are many different types of assets in the world. We're not just talking about financial assets or what people call real-world assets or on-chain assets. Broadly speaking, we believe that subnets can address many different use cases, which are key to bringing the world’s assets on-chain. This includes gaming, obviously, but also the institutional and traditional financial space, but also consumer use cases, such as loyalty systems or loyalty platforms. There is also the ability to put different currencies, stablecoins and other payment methods on the chain. In short, we focus on all of these things. But taking it to the next level, what we're really focused on is allowing anyone who wants to build an application or work on a use case to be able to use it on Avalanche and provide the necessary tools and architecture to support those applications. Specifically, using subnets as a way to extend Avalanche networks, as well as for developers to build custom modular networks. I think this is a very good idea, you don't have to be beholden to the main chain or the main permissionless network, whether in terms of competition for block space or transaction ordering and so on. You can create your own environment where you have your own block space, or provide environments for different use cases. For example, the Movement Labs team just announced their funding round. They are building a Move-based ecosystem that can promote the development of the Move virtual machine and language. Their first steps include building the M1 on the Avalanche, rather than the L1. It will be powered by the Avalanche consensus, which is a subnet. Part of the appeal is that not every developer in the world knows how to program with Solidity or gets what they want. The idea is to meet the needs of developers and give them the choice and flexibility to build what they need more securely, faster, and more cheaply than the Web2 or other solutions they currently use. This is a way of thinking. Additionally, we develop a lot of different things for the Avalanche platform. There has been some news about the Hyper SDK, which will help people build applications or use cases on custom virtual machines or subnets. But the focus of Hyper SDK is performance and throughput. Therefore, it prioritizes providing TPS to users over and above what can be provided using Solidity encoding or the EVM. This is the part we focus on on a technical level. In terms of business or strategic roadmap, our focus remains on helping partners understand how best to use Avalanche, how best to build their applications, whether it's on a subnet or on a C chain or other permissionless environment . We also help partners take advantage of many different programs. We’ve talked about all of this, there’s so much to cover.
Blizzard Ecosystem Fund and its evaluation criteria
Blair : Yeah, I saw those tweets. The progress you have made with your partners is impressive. As you said, make the market bigger first. This is how you make the market bigger. You also talked about developers, such as how to lower the barriers to use for developers and how to ensure that we have a richer ecosystem that covers all these applications. Developers don't have to actually know how to code correctly. Even transaction costs can be significantly reduced. This is great. I know you have launched your own investment and ecosystem funds. Are there any preferred areas you are currently focusing on? Can you elaborate a bit on your personal preferred projects or areas? Because we mentioned many emerging trends and narratives, such as real-world assets, and even social tracks such as the recent popularity of Friend Tech. Do any of these appeal to your team?
Lydia : Yes. Ecological funds have always supported innovation in various categories. There is no specific focus. It's open to any developers and projects that bring interesting use cases and build really cool applications. They all need funding for different reasons. The investment fund, the Blizzard Ecosystem Fund, is tasked with developing the Avalanche ecosystem. Although the themes or types of projects in which the fund invests may change over time, it also has a very diverse portfolio of companies in different industries. The idea is that we at Ava Labs and all of us at the fund don't stick to those so-called "must-win" tracks or areas, but we do want to support everyone building in this space with what they build. All have a chance of success. No matter how they define success, such as mainstream adoption, becoming popular or having 5 million users, 5 million wallets, etc. I mean none of us feel like we are trying to choose or decide for the industry what will make it successful. We just try to make it as big as possible.
Blair : This is very interesting. Many projects will say which industry they are optimistic about. Your open attitude is amazing. You just want to see that there is value and unique things in the project, and then you will fully support it. But I guess you're probably going to be doing a lot of due diligence, doing an internal evaluation of these projects. Can you walk us through that process or what are the core capabilities or prerequisites that you think developers or builders in the ecosystem must have?
Lydia : Starting with our team. Our business development team and our Blizzard trading team are a mix of general talents and industry experts. We have heads of six verticals, covering institutions, DeFi, games, enterprises, and more, and overall, we focus on leveraging the team’s expertise to help projects in these industries. The due diligence they do will vary from person to person, but I think the common denominator is the team members, and for very early stage projects, the most important point is to secure the team members and their experience accordingly. When evaluating, especially when it comes to different industries, we value whether they have industry experience. Then, we will also conduct some feasibility assessments of business models or application scenarios, such as very typical financial analysis or investment analysis. But our main concern is deciding whether these guys are good builders, they know what they're doing. Second, are they committed to growing the ecosystem and are they aligned in their views and approach to Web3? I think that's another key factor. For industry-specific specialties, we have a very diverse team that can delve deeply into each vertical that they're responsible for, rather than having a group of integrated talents. But we also have general talent that helps us analyze those areas that we don't have experts in, and overall, our team is very diverse.
Discussion on Web3 applications and industry driving forces
Blair : That’s interesting, and I totally agree with you. I don't know about other industries, at least for Web3 and crypto, where the state of the team is key. Sometimes, for those entrepreneurs and builders, they must be very cautious when choosing development directions and industries. And they may encounter a lot of distractions along the way. This is what we see all the time. We talked about developers and your mission. We'd also like to know how you assess the current growth of Web3 adoption and its broader impact on the overall growth and evolution of the decentralized Web ecosystem? What does the future hold? Because it's still in its infancy, very early days. So my next question is, what are the major catalysts or drivers of the next cycle? These are two questions that can be tricky.
Lydia : It’s been an extraordinary journey. To answer the second question, even when I was working in technology, there was no clear answer. Everyone was trying to find the next big winner, the next big innovator, or the next big disruptor, but it never started with technology. appear in the form. It always comes in the form of a single hot app that suddenly grows in users, growing exponentially in a short period of time. Then, the market follows suit. So I think that's going to happen in Web3 as well, pushing Web3 to the next level and really adopting it. Simply put, we need a big app that people love to use, and maybe they don’t even know it’s powered by blockchain and it doesn’t matter. The user experience needs to be simple to use. If people like the app so much, they may be willing to overcome some obstacles to use it, but not so much that they are stalled by a cumbersome onboarding process. The point is, I think there needs to be a killer app. As for where it is, I think the answer will vary from person to person. But I'm super excited about this new game that's coming out. The game is called Off the Grid and is developed by Gunzilla Games. They've done a great job with the graphics, gameplay, and they've released a preview video showing some well-known gamers playing the game, and it looks pretty amazing. I am also a gamer, and I have also invested in game companies, so I have some preferences and tendencies in this direction.
Blair : Yeah, I feel the same way, because I feel like there's definitely an important pillar that we're trying to solve for is how to make the whole Web3 world smoother and more accessible. Because usually, because usually, newbies may feel very burdened because they have to master the wallet, master the private key. They must also learn to use each application, even the various DeFi protocols, there are a large number of applications, and each DeFi may have a very different user interface and user experience. It is very unfriendly for people's daily use. Of course, GameFi may be a promising area, because there are definitely many Web2 gamers. If we can make it more visually appealing and incorporate NFTs and other elements, it would be a very interesting ride.
Lydia : Yes. There are a lot of possible directions to take, but as a gamer, I'm very excited about some of the things that are coming. Because it will be rolling out on my console first, it will be easier for people to access. It doesn't run in the browser and you don't need to create a wallet with C language to start the game, you can just start playing. This is a very important point and you only need a simple introduction to get started. However, not every project has such a clear product upon launch. Sometimes, blockchain construction is not an easy task for developers. If you're building a game and you need to build an entire engine around graphics, gameplay, and all interactions with the game engine, the last thing a developer wants to worry about and think about is blockchain. So, why don't we provide a service that makes building this thing on the blockchain easier? At Ava Labs, we also have Ava Studios and AvaCloud, a service that manages subnets. It really helps teams that are focused on critical parts of the application and make network infrastructure a secondary concern, knowing they need blockchain. But if we truly support projects and help them build a great product and their own business, why not provide a service that makes development easier? This is another aspect we focus on. We hope to expand the market and allow developers to focus more on what they really care about, rather than trying to understand how to get data from the chain, use APIs or build their own data dashboards, etc.
Blair : Yes, entrepreneurs should free their brains and not worry about the technical aspects. They should not worry about what blockchain technology is or how do I do it. Because it may take up a lot of their time and energy. It's great to see your efforts to provide them with a more friendly development environment. They can focus on product market fit, think about which industry to work in, and how to implement growth strategies. I think this is a very important pain point in the current industry, especially now that more and more developers are joining. So glad to hear that. I also agree with your point about the internet, users don't need to understand blockchain technology, they don't have to know about it. Imagine if you ask our parents, they don't really understand Internet technology, but they use Internet technology every day. So I think this is the ideal scenario for Web3.
Lydia : Yeah, I don't think our parents knew about the hard-to-reach parts of the data servers behind it, or that Uber and Lyft were on AWS.
Ava Labs’ support direction
Blair : Yeah, they don’t need to know those things, they just need to know that it’s easy to use and it brings a huge convenience to their lives. So they continue to use it and are willing to pay for it. Thank you for sharing these interesting insights. My next question may also be a little tricky, I know you guys are very open-minded and don't want to pick a so-called "must-win" track or trend. But what are your thoughts on the current popular narrative? Because we saw friend.tech RWA LSD Layer2 and even trading robots become very popular recently. Can you break it down for us, is Ava labs planning to support all these types of projects or various industries within the ecosystem, and what are your personal thoughts on that?
Lydia : Based on my experience and investing, and the time I spend on Wall Street and in crypto, there are many reasons to use blockchain to innovate and make traditional financial markets more efficient. This is where tokenization comes into play. Real-world assets are having a hot moment right now. While we're not necessarily picking a so-called "must-win" track, we do want to support the verticals we focus on. For example, on the RWA side, we launched Avalanche Vista, a $50 million program from the Avalanche Foundation to purchase tokenized assets with the goal of helping drive the development of the RWA market. We also work with many buy-side firms to drive market growth. We've gotten some feedback from issuers and investors that once an asset is tokenized, it's not necessarily liquid on the chain. On the institutional side, we are working with buy-side firms to try to resolve this issue. Unlike many other platforms in the past that focused on the supply side or tokenization of assets, in order to reach the next stage there must be liquidity, demand and distribution. So we are looking at this issue. There are other aspects where we are cooperating with some artists. As part of the Avaissance program, focusing on NFTs and bringing digital art to Web3, this is very popular with the community as it engages and mentors existing artists, we have resident artists who provide courses to those entering the program , there will be several first batches that have finished their courses. This isn't just about grants or investments, this is really about the community, engaging them and providing content and education to artists who may not know about Web3 art or NFTs. Now they know how to create their own collection or portfolio on-chain. We're also looking at DeFi, as has always been the case, which is actually one of the first initiatives launched by the foundation in 2021 called Avalanche Rush, a somewhat different initiative in terms of gaming we have Avalanche Arcad3, which is actually more like It is a collision of Web2 and Web3 gaming industry players, and one of the first batch on the Web2 side includes GREE, a Japanese gaming and content media company. On the Web3 side, it also includes the Shrapnel team, who are also developing similar AAA shooting games. This is also an area that we are very concerned about and maybe we will have the opportunity to discuss it today. We're here to drive a variety of different things, working toward our mission of digitizing global assets, which is also our slogan. Suffice it to say that we picked these six industries and spent a lot of time in them, and overall we are very supportive and try to help our community and people new to the community find what they want to do.
Blair : That's great. Rather than choosing a so-called "must-win" track, you have done a lot for community developers and others. Thank you for sharing these valuable insights, your expertise is extremely valuable to all those developers and builders out there. We very much look forward to seeing more innovations from Ava Labs in the future, and there will be more good news in the future. Thank you.
Lydia : Thank you, this was a great conversation.
Blair : I feel the same way, thank you.
