We ask the builders in the blockchain and cryptocurrency sector for their thoughts on the industry… and throw in a few random zingers to keep them on their toes!
This week, our 6 questions go to Chen Li, the co-founder and CEO of Youbi Capital, a venture capital firm investing in blockchain technologies and disruptive decentralized applications.
Chen Li is the co-founder and CEO of Youbi Capital. He has a Ph.D. in chemistry and worked as a scientist for Regeneron Pharmaceuticals, where he won two awards for his contributions to the development of breakthrough antibody drugs. He was introduced to Bitcoin mining in 2015 through his college roommate, after which he co-founded Youbi Capital in 2017. Chen laid the foundation for Youbi’s dissertation in blockchain infrastructure and led investments in Algorand, Avalanche, Polkadot, Flow, Kadena, Chainlink, Debank and others. He was also an advisor to JP Morgan’s blockchain team.
1 — What is the main hurdle to mass adoption of blockchain technology?
The main hurdle to mass adoption of blockchain technology now remains infrastructure, especially the scalability and security of layer 1s. We all saw that the turning point for Axie Infinity was not the play-to-earn movement that started in early 2020, but the game’s migration from Ethereum to Ronin in mid-2021, which immediately led to an explosion of players and revenue growth. †
But Axie was only one application and can therefore easily be put into a dedicated chain, while for the DeFi protocols – which are very composable and already interconnected – we still don’t have layer 1 for the whole set of DeFi protocols. protocols to migrate past without hindering traffic. Solana may be the closest to achieving this goal, but it doesn’t scale horizontally for mass adoption.
Much remains to be done to lay a solid foundation for the blockchain application.
2 — What will happen to Bitcoin and Ethereum in the next 10 years?
Bitcoin has successfully expanded the consensus on its asset as a decentralized store of value for everyone from individuals to a large group of institutions in this cycle. It is only a matter of time before it is widely accepted. Moreover, given the global inflation background, Bitcoin could also have a chance to become a widely used currency in international settlements. There has been much speculation about Bitcoin’s value proposition, broken down into its uses across different categories.
On the technology front, the community has deliberately kept Bitcoin’s progress at a slow pace to avoid uncertainty. While I believe this is the right strategy for its use cases, Bitcoin will still be limited in supporting smart contracts for the next 10 years.
Ethereum, on the other hand, is making a much faster iteration by moving to proof-of-stake and possibly sharding in the near future. All EVM support chains are also in the Ethereum ecosystem and contribute to the base layer. Due to the strong network effect, the Ethereum ecosystem is likely to remain a dominant force in the DeFi space for the next 10 years.
3 — When you tell people you’re in the blockchain industry, how do they react?
I remember speaking to outsiders about Bitcoin for the first time in 2015 – they either fell silent and gave me an uneasy look as if I was trying to talk them into some kind of scam, or in some cases they enthusiastically challenged me as to whether Bitcoin has any value had. Bitcoin mining was more of a business that people could understand, but it was extremely rare to find someone who was open-minded about the cryptocurrency itself.
Now people are becoming more and more informed and involved in blockchain technology and crypto. I am often not the only one they know in the industry. I used to get a lot of basic questions about blockchain. But now people who are not blockchain professionals sometimes share their perspectives first once they know I’m in the industry.
They now have much more diverse perspectives on the blockchain industry. In addition to holding crypto in their wallets, several people are NFT collectors or even landowners in blockchain games. They see blockchain as a technology to issue and transact NFT assets as well as infrastructure for the Metaverse, but are more attracted to NFTs and Metaverses. Therefore, I am very confident that the Metaverse will be the gateway to the Web3 era.
4 — Who do you think makes sense and who makes no sense at all?
Whoever builds a product and then tells a story makes sense to me and who only tells a story or builds a product for an imaginary question makes no sense.
There are many great products that have been carefully designed and repeated to meet the needs of the users. For example, Binance has a very efficient feedback loop, from customer service to management. This allows it to properly replicate its product and enter a new trend in the market. The Binance team makes sense to me. Polygon, Debank and The Graph are all excellent examples of products with a strong product-market fit. All these teams make sense to me and I see a lot of potential in the adoption of their product.
5 — List your favorite sports teams and choose the most memorable moment to watch them.
My favorite sports teams were the Chicago Bulls and Denver Broncos. The most memorable moment was Michael Jordan’s final shot with the Bulls, winning their sixth championship.
6 — Unlike now, in what time and country would you like to have lived?
I wish I had lived in Shanghai, China from 2012 to 2015. That was the first crypto market cycle I missed. The two major events in that time frame were the growth of Bitcoin mining and the fundraising and initial community building of Ethereum. They both happened in China at the time.
Besides, China is my home country. I like the food and the people.
A wish for the young, ambitious blockchain community:
I wish everyone in the community could survive the ups and downs and hold onto their crypto assets.