Which Web3 projects do Binance Labs prefer?

He Yi, who manages a multi billion dollar portfolio in Binance Labs, is seeking to invest in Web3 projects, from infrastructure, applications, data to analysis and security.

Title of the original text: Binance's US $7.5 billion women see promise of promise in bear markets

Interviewee: He Yi, co-founder of Binance


Compiled by: Deep Tide TechFlow

He Yi, who founded Binance Cryptocurrency Exchange with Zhao Changpeng in 2017, is now responsible for managing the venture capital department of the company. She believes that the depressed market and difficult economic conditions are exactly the 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 department Binance Labs last month, said that she had a positive plan for this business. The department is under the control of the world's largest cryptocurrency exchange, managing $7.5 billion and holding more than 200 projects.

Ms. He, 35, said that she was looking for early projects that could bring long-term benefits to the industry. She believed that the current bear market conditions would create a once-in-a-lifetime opportunity, but she refused to disclose specific details. She added that "copycat" projects that catch the traffic trend in order to make fast money must be filtered out. She said that this project lacks a solid business model and will not last.

Binance Labs showed last month that it has achieved a return of 2100% since its establishment in 2018. Its investment projects include Axie Infinity, Polygon, The Sandbox and STEPN.

In June, Binance Labs announced that it had completed the raising of an investment fund of 500 million dollars, which was funded by Internet investment companies DST Global Partners, Breyer Capital, private equity funds, some family offices and some enterprises.

The following is the interview record, which we edited for brevity.

Timmy Shen: What is your investment strategy? How is it different from VC's investment in the Internet industry or Web 2.0?

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

A key difference between Web3.0 and Web2.0 in terms of financing is that Web3 projects do not necessarily need to raise funds through venture capital companies. They might as well directly issue tokens and sell them to users.

In this case, it is more effective and valuable for venture capital companies to provide guidance rather than money. These recommendations can include guidance on technology, security aspects, or token models. This is important because users and the corresponding community are the core of the Web3 project.

Timmy Shen: You said that now is a good time to invest. I want to know what impact the bear market or bull market has on your venture capital?

He Yi:Generally speaking, whether in a bull market or a bear market, we should find out what we really want. In a bear market, I think we should invest more actively, but not for investment.

In the investment industry, the trend is obvious. Many funds worry that they may miss the investment cycle of four or five years. Some of our LPs also suggest investing in more projects to speed up investment. But I have told them not to worry.

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.

The industry is still in its early stages. In the future, I imagine that people should be able to use blockchain native products almost everywhere, just as we are used to using office software and social media. However, there are still technical bottlenecks. Therefore, infrastructure is an area where we will still invest, no matter whether you are the first layer or cross chain protocol.

The second type of projects are those that run various blockchain applications.

Now there are more and more projects with a large user base, such as those that adopt the P2E or M2E mode. We are paying close attention to products with innovative use cases.

For these projects, we will ask questions similar to what you would ask Web2: What is your business model? What problems or problems have you solved? What are the innovations? These are typical questions we will 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 attacked by hackers, but this has been happening in the Web3 industry.

For a long time, people in the Web3 industry have repeatedly said, "Code is the law.". If your code is not good enough, you are responsible for the problem. I agree, but if we want wider adoption, then you must make your product easy to use in order to serve more people.

In addition, I prefer projects with their own innovative methods to imitators.

If you tell me that you are just like a hot project, and have similar user groups, and then make some fast money, I will not be interested in this.

Binance will not invest in projects in order to make quick money. We attach importance to "long-term principle".

Now there are still some founders and entrepreneurs who think it is easy to raise funds in Web3 and begin to lay down in this field.

These entrepreneurs do not realize that once you make a commitment to users as a founder, you must deliver. You can't just put the user's money into your pocket and feel that you are now financially free, so you can lie flat.

However, many people in this industry are still exploring different ways to succeed. We hope to find those who value long-term methods rather than pursuing short-term interests.

Timmy Shen: Before you took over Binance Labs, it invested in X-to-ear projects, such as Axie Infinity and STEPN. What do you think of the X-to-ear model?

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

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

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

Timmy Shen: Binance said in February that it would invest 200 million dollars in Forbes, but CEO Zhao Changpeng said in June that this might change after the SPAC transaction failed. Can you give us an update on this and your media investment strategy?

He Yi:We are still paying attention to the investment of Forbes, which is related to the IPO through backdoor listing, but it seems that there are some difficulties, so they are making adjustments. Perhaps some of their shareholders may 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 large user base, which is good for Web3 education.

At present, we have not really listed the media as a specific investment target, but if we do encounter good investment, we will pay attention to it.