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Interview with He Yi: Which three types of Web3 projects are more optimistic about the $7.5 billion Binance Labs?

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Emphasize long-term approaches over short-term gains

Original title: " Binance's US$7.5 billion woman sees plenty of promise in bear markets "

Original author: TIMMY SHEN, Forkast

Original compilation: Shenchao TechFlow

He Yi, who manages a multi-billion dollar portfolio at Binance Labs, is looking to invest in Web 3.0 projects, from infrastructure, applications, Data to Analytics and Security.

< p>He Yi, who founded the Binance cryptocurrency trading platform with Changpeng Zhao in 2017, is now in charge of the company's venture capital department. She believes that the depressed market and difficult economic conditions are just the right time to find potential projects for investment.

In an interview with Forkast, Ms. He, who was appointed as the head of the incubator and investment arm Binance Labs last month, said that she With aggressive plans for the business, the unit sits under the umbrella of the world's largest cryptocurrency exchange with $7.5 billion under management and over 200 projects in its hands.

The 35-year-old Ms. He said that she is looking for early-stage projects that can bring long-term benefits to the industry, and she believes that the current bear market conditions will create once-in-a-lifetime opportunities , but she declined to give specific details. She added that "copycat" projects that catch traffic trends in order to make a quick buck must be filtered out. Such projects lack a solid business model and won't last, she said.

Binance Labs revealed last month that it has achieved a 2,100% return since its inception in 2018, with investments including Axie Infinity, Polygon, The Sandbox and STEPN.

In June, Binance Labs closed a $500 million investment fund that included partners such as Internet investment firm DST Global Partners and Breyer Capital. The new fund has also attracted private equity funds, family offices and corporates as limited partners (LPs), according to a June statement.

The following is a transcript of the interview, which has been edited for brevity.

Timmy Shen: What is your investment strategy? How is it different from venture capital (VC) investments in the Internet industry or Web 2.0?

He Yi: We all know that a bear market is a good investment opportunity, because many teams who just want to make some quick money will forced out of the industry. Now is a great time to support those who really want to stay in business and believe in this industry.

A key difference between Web3.0 and Web2.0 in terms of funding: Web3 projects do not necessarily need to raise funds through venture capital firms, they may as well issue direct Token and sold to users.

In this case, instead of providing money, venture capital companies should provide guidance, which is more effective and valuable. These recommendations could include guidance on technology, security aspects or token models. This is important because users and corresponding communities are at the heart of Web3 projects.

Timmy Shen: You said that now is a good time to invest. I would like to know how the bear or bull market affects your venture capital investment?

He Yi: Generally speaking, whether in a bull market or a bear market, we have to figure out what we really want. In a bear market, I think we should be investing more aggressively, but not investing for investment's sake.

In the investment industry, the bandwagon trend is clear, with many funds concerned that they may miss a four- or five-year investment cycle. Some of our LPs also suggested investing in more projects, with faster investment speed. But I've told them not to rush.

Timmy Shen: What types of projects are your investment preferences?

He Yi: There are three types of projects we are interested in:

The first category is those projects that build infrastructure.

This industry is still in its early stages. In the future, I envision people should be able to use blockchain-native products almost everywhere, just like we have become accustomed to using office software and social media. However, there are still technical bottlenecks. So, infrastructure is an area where we're still going to invest, whether you're layer 1 or a cross-chain protocol.

The second type of projects are those running various blockchain applications.

There are now more and more projects coming up with a huge user base, such as those that adopt the P2E or M2E model. We are paying close attention to those products with innovative use cases.

For these projects, we ask questions similar to what you would ask a Web2 company: What is your business model? What problem or problem did you solve? What's new? These are typical questions we ask.

The third category is those projects that provide blockchain-related services to support better development of the industry, such as data security.

It is rare to see Internet (Web2) companies being hacked, but it happens all the time in the Web3 industry.

People in the Web3 industry have been repeating a sentence for a long time: "code is law". If your code isn't good enough, it's your fault that something went wrong. I agree, but if we want wider adoption, then you have to make your product easy to use to serve more people.

Also, I prefer projects that have their own innovative approach, rather than copycats. If you tell me you're just like some hot project with a similar user base and making some quick money, I'm not a fan of that. Binance does not invest in projects to make quick money, we value "long-termism".

There are still some founders and entrepreneurs who think it is easy to raise money in Web3 and start to lay flat in this space. What these founders don’t realize is that once you as the founder make a promise to the user, then you have to deliver. You can't just put users' money in your pocket and think you're now financially free so you can lay flat.

However, many in this industry are still exploring different ways to succeed, and we hope to find those who value a long-term approach rather than short-term gains.

Timmy Shen: Before you took over Binance Labs, it invested in X-to-earn projects such as Axie Infinity and STEPN. What are your thoughts on the X-to-earn model?

He Yi: Projects running the X-to-earn model need to realize that "earning" is not the key, "X" is the key yes.

A typical example is P2E games. If users join only because they want to make money, then once the pump is over, the game is basically over, the number of users will shrink, and the token price will drop.

The fundamental of this model is: if there is no revenue, is the game still attractive? Are enough people willing to pay?

Timmy Shen: Binance said in February that it would invest $200 million in Forbes, but CEO CZ said in June that after the failure of the SPAC deal, this subject to change. Can you give us an update on that and your media investment strategy?

He Yi:We are still paying attention to the Forbes investment, which is related to the initial public offering through the backdoor listing investment, but it seems to be having some difficulty, so they are making adjustments. Maybe some of their shareholders might want to dilute their holdings.

In terms of media investment, when Elon Musk said he wanted to buy Twitter, we thought it was a good opportunity because Twitter has a huge user base, Good for Web3 education.

Right now, we don't really list media as specific Investment goals, but if we do come across a good investment, we pay attention.