Dialogue Sino Matthew: Ethereum and Solana have a more complementary relationship in the market

Sino Global Capital is a cryptocurrency investment fund that connects the East and West. They have invested in early-stage projects like FTX, Solana, and other market-performing projects, which makes us curious about their methods for discovering potential projects. This time, Chain Catcher had an in-depth conversation with Matthew, a partner at Sino, covering topics from investment cases to the similarities and differences in the crypto industry both domestically and internationally, hoping to inspire you.

Chain Catcher: Please briefly introduce your personal experience, the background of Sino Global Capital, and why you came to the Crypto industry to invest?

Matthew: I started my journey in the blockchain field in 2013 and now have seven years of experience in investment banking in China, mainly representing international tech companies for strategic cooperation and investment. I started slowly trying things out and have continued to this day. Sino Global is now the executive partner of the Liquid Value blockchain fund, and I am investing in blockchain technologies that are strategically significant to China, which is also the reason I came to China.

Chain Catcher: Sino aims to build a bridge between the Chinese and international markets. How are you constructing this "bridge"?

Matthew: First of all, the West and China are different. For example, in the DeFi field, China is catching up and showing explosive trends, but initially, it may have been due to the influence of Fcoin that the Chinese were more cautious about DeFi.

The specific difference is that China's DeFi is mainly concentrated on BSC, while overseas it includes parts of BSC and the Solana ecosystem. Sino's bridging role mainly plays out in: direct introductions between founders from the East and West; consulting services, market research; helping projects recruit and establish teams in China; and mainly providing post-investment services in areas like community, market, and PR.

Chain Catcher: Investment institutions often have their unique investment strategies. For example, DCG has focused on investing in middleware projects in the past year. From the perspective of sectors and logic, what is Sino's investment strategy and methodology?

Matthew: We believe the crypto market is very active and changes rapidly, so it is unrealistic to evaluate projects with a standardized methodology. You might miss many investment opportunities due to fixed evaluation criteria, so Sino's investment strategy mainly relies on three points.

1) Approach emerging things with an open mind. This has made us early investors in NFTs. We do not simply judge a project based on whether its narrative aligns with the current market.

2) Focus on overseas projects that can empower China.

3) Our style leans towards traditional VC, valuing the founder's background and industry experience. Sino aims to do long-term things; we do not want to be the ones who sold Alibaba stocks in 2004 or Tesla stocks before 2010. We are willing to help projects navigate through bull and bear markets.

Chain Catcher: What characteristics do you think high-quality projects possess?

Matthew: 1) Financial background 2) Understanding of technology 3) In-depth understanding of the Asian region 4) Natural recognition of Western culture.

Chain Catcher: According to public reports, Sino invested in the FTX exchange at the beginning of last year, which now seems like a very profitable investment. What was your logic behind investing in FTX at that time?

Matthew: I initially saw Sam on Twitter and thought he was special, so I reached out for further contact. But to be honest, part of the reason for completing this investment was luck, and another part was our long-term attention to the industry, which gave us the opportunity to meet him early. I personally admire Sam; as a leader and founder, he has many shining points. Our investment is about investing in people, and Sam has a very entrepreneurial mindset. Generally, when we encounter such people, we invest immediately.

However, people like Sam are rare, just like Elon Musk, who might only appear once in a decade. Therefore, Sino usually meets and gets to know thousands of entrepreneurs each year to increase the chances of investing in such outstanding founders, which is also one of the reasons we invested in Sam.

Chain Catcher: Recently, we have seen the explosive potential of the Solana ecosystem in the Chinese community, even comparing it to the Ethereum ecosystem. What do you think is the probability of Solana replacing Ethereum's position in the future?

Matthew: Ethereum and Solana are not in a competitive relationship; we cannot talk about one replacing the other. Perhaps the purpose of Ethereum is like a common vehicle, while Solana might be an innovative model like Tesla; they are complementary.

Chain Catcher: Now there are many scam projects, and the market is overheated. How do you filter out this noise?

Matthew: I don't like an overheated market. It is very unfavorable for institutions because the valuations of projects in the primary market are generally high, and anyone can launch a project. However, what the crypto industry needs are projects that build underlying infrastructure and promote healthy industry development. In this case, we filter projects based on three indicators and conduct research on the existing super fans of the projects. We always believe that investment institutions are not smarter than users, and we do not guess user needs.

The concept of super fans can also be understood as seed users or early users (not users who just chase airdrops), to discover what good projects can retain these seed users and the reasons why users use this product. But if a project has no early users at all, we would think that this project is probably not needed by the market.

Chain Catcher: In the past, AMM has always been regarded as the foundation of DeFi innovation, changing users' trading habits. From your traditional financial background, what do you think the next innovation similar to the current "AMM" will be? What kind of product can change user habits?

Matthew: We believe that in a multi-chain world, different use cases will naturally and organically cluster around certain chains, but it is important to connect different "islands" to form a cohesive ecosystem. Additionally, in the future, CBDCs may start using DeFi protocols for connection, so interoperability and composability are still crucial for the maturity of the industry. These ongoing innovations will significantly disrupt the future of DeFi in a positive way.

Chain Catcher: Coinbase's listing is a milestone event in the crypto industry. To what extent do you think this will promote the industry's compliance?

Matthew: Coinbase has been compliant from the beginning until its recent listing, setting a compliant exchange business path for our industry. However, one thing to always remember is that the crypto world has only been alive for over a decade, which is still very early compared to any traditional industry. Coinbase's listing has its significance, but from the perspective of the entire industry, it is still a small event, and compliance will not happen as quickly as we think.

Chain Catcher: One last question, what do you think is the most worth exploring question in the Crypto industry in the next five years?

Matthew: From what we understand, large overseas institutions are currently working hard to provide basic crypto products for clients to overcome legal barriers, and we are getting closer to DeFi-supported savings accounts and on-chain settlements for large-scale financial transactions. Based on this outlook, we believe that the future of MEV and CBDCs, as well as their interaction with the DeFi ecosystem, are issues worth exploring for entrepreneurs.