Wang Feng's speech transcript at the Element 2.0 online launch: I want the whole team to hear my excited heartbeat

Source: Element

This article is compiled from Wang Feng's speech transcript at the Element 2.0 online launch. The following is the full content:

I believe that NFTs are the light of the crypto market. With NFTs, GameFi and the metaverse have their foundational components. A PFP image, a song, a Vlog, or even every original author's article can be recorded, shared, and exchanged using NFT metadata. With a series of NFT protocols and trading markets, the door to the Web3 world is about to open. For any new public chain ecosystem or layer two network to rise today, several things are essential: wallets, NFT markets, DEX trading, and lending, which shows that NFTs occupy a very important position.

NFTs will trigger a broader IP revolution. It is evident that, whether based on the protection of knowledge products like CryptoPunks or embracing the CC0 protocol to promote public intellectual property, NFTs are the most critical new data and new medium in this process. Perhaps future generations will say that many of the strange logos or icons in today's world mostly emerged from your NFT era.

1. Recently, there has been a lot of news about Element, so let me briefly introduce the situation:

Element launched its first test version in September last year. After nearly a year, we have completed the replacement of two generations of trading protocols. Currently, we provide a very complete set of on-chain data, offering cross-market order purchases and listings. We have also done a lot of work on product usability and trading efficiency. In addition, Element has integrated four public chains: Ethereum, BNB Chain, Polygon, and Avalanche, and will next integrate Solana. Our integration on different public chains is set up as an independent entry.

In fact, when our product team was founded last year, we received $11.5 million in Series A funding from top-tier investors such as Sequoia, SIG (the largest investor in TikTok), and Feng Bo's Dragonfly Capital, Draper Dragon, and Ince. At that time, there were only two of us, and I hadn't even written a PPT. So how did we manage to secure funding so smoothly? Many people don't believe that you can get world-class VC investment without writing a PPT. I tell you, it's true. Although I myself am not very clear about the product and operational points discussed with VCs at that time, I have always believed that they are not interested in what you say but in your ability to seize opportunities, your current state of work, and what you have done in the past.

This is our fourth startup. The so-called entrepreneurship means being fully committed to something.

The first time was at Kingsoft, just before the company went public, when Lei Jun gave me 1% of the stock. I joined as an employee, starting as a product manager for a tool software. Don't think that the product manager position is that impressive. In any successful company, the CEO is the best product manager. But what I want to say is that I have always regarded myself during that period as an entrepreneur fighting alongside others. I fought alongside an incredible entrepreneur and a group of technical geniuses.

The second time was founding Blueport Interactive. Eight years later, we went public in Hong Kong. During this period, our team wrote about fifteen games, among which "Journey to the West OL," "Dawn of Light," and "Sword of Kings" were popular games at that time, and many players still message me on Weibo asking me to grab games. The process from founding Blueport to IPO taught me how to maintain a fighting spirit even in the darkest moments.

The third time was initiating Mars Finance. I didn't expect that by creating a blockchain information platform, I would end up writing some things myself. What I'm proud of is that Vitalik Buterin even participated in my community dialogue program. Binance, Huobi, OKEx, and Matrixport led by Wu Jihan are all our investors. In fact, we were also early investors in FTX in the Chinese market. Mars Finance is now launching a new brand, Marsbit, overseas, which is also the incubator for Element.

This round is the fourth time. Feng Bo from Dragonfly Capital said when introducing me to his friends that he always remembers me casually saying this sentence.

"I want the whole team to hear my excited heartbeat."

Yes, I think we still maintain that passion today. Whether in a bull market or a bear market, our R&D team is on the front line, insisting on building products and continuously optimizing user experience. With a very passionate state, we have done a lot of work. Much of the work has far exceeded my initial expectations. Without the entrepreneurial passion from the marrow, we would not have been able to persist. Over the past year, we have seen many teams come in, but they quickly disappeared, while we have become braver in battle.

From the recent DappRadar NFT trading market rankings, Element's trading volume and user numbers have far surpassed the second-largest aggregator market, Genie, and have approached the long-standing leader, GEM. From April 15 to now, Element 2.0's multi-chain transaction volume has reached $42.2 million, equivalent to 22,000 ETH, with a total of 16,185 unique user addresses completing 91,599 transactions. We will announce this on Twitter.

It is undeniable that we are a relatively active force in the NFT market.

2. After entering the NFT market, we understand how difficult it is to create an excellent NFT market.

Will (co-founder) and I have some unique connections with NFTs. The CryptoKitties game started in 2017. Today, we no longer consider it a game. But at that time, in the Blueport game team, we quickly noticed this interesting product, which was based on our instinctive understanding of games. We were one of the earliest teams in the Chinese market to write similar products, completing it in about ten days. We later almost forgot about this interesting thing. That product was called Crypto Dog, which was given to a team developing a public chain. They provided us with digital currency that we didn't quite understand.

We needed to learn about decentralized protocols. Coincidentally, we encountered the DeFi summer of 2020.

This is how we started. Originally, we planned to enter during the DeFi Summer with an ERC20 asset lending protocol developed by our team. We deployed it on the Ethereum test network but ultimately abandoned the commercial release because we saw that the next wave, the NFT market, was about to begin.

However, during this process, my technical team and I greatly improved our understanding of mainstream decentralized market protocols. We were very excited before we started, but once we got in, we realized how difficult this work was.

Initially, my investors told me, "What if we could create a crypto version of eBay?"

That is pretty cool. The question is, how do we achieve that? This is really difficult.

A few days ago, a colleague in the U.S. told me, "Building a centralized exchange is hard, building a decentralized exchange is harder, and building a decentralized NFT exchange is even harder."

Over the past year, we have encountered countless problems:

• The traffic advantage based on CEX? For example, Binance and Coindesk.
• Completely using a protocol library without managing its development and opening it to the market? In fact, the 0x protocol does just that.
• Creating a trading market for blue-chip NFTs for their holders? Bored Apes can have their own market, so they won't need OpenSea in the future?
• Based on a similar AMM mechanism for swaps?
• Creating a SaaS that integrates all trading orders? Allowing market collaborators to each go their own way.

I doubt that any of these can truly build a really good market; of course, I might be wrong. We don't have the ability to foresee the future, so we can only wait and see what happens next year and then come back to focus on being builders. I also better understand how difficult it is for Binance to grow from a trading platform to its current scale. Not to mention that we are trying to create an even more challenging NFT trading market.

I believe that the NFT market is a very unique market. It operates differently from centralized exchanges (CEX) and has significant differences from the current DeFi mechanisms.

Furthermore, in the Ethereum market, the NFT market based on the ERC721 protocol differs greatly from ERC20 exchange markets like Uniswap. Similarly, we believe that companies entering the NFT market based on the advantages of CEX trading platforms have almost not achieved better market results.

3. Let's talk about how the Element trading protocol can significantly reduce gas fees.

First, let's review how several decentralized trading protocols have evolved historically.

• OpenSea's Wyvern has been in use until the end of May this year, making it the longest-serving NFT protocol layer. It is important to note that protocol iterations in decentralized crypto markets are not like operating system and application upgrades; they are either deprecated or used in parallel. The Seaport protocol that OpenSea recently migrated to has significantly reduced gas fees and is currently the most dominant protocol in the entire crypto market, with gas burned exceeding that of the Uniswap protocol. OpenSea is migrating most of its business to this protocol.
• The 0x protocol released V4 in March this year, which was directly deployed by Coinbase. Unfortunately, the Coinbase NFT market performed poorly. We noticed that the transaction volume reported by Coinbase NFT was only 4,000 ETH, which is about 20% of what we have at Element.

As for our protocol? According to our own environment testing data, using the ElementEx protocol can reduce gas fees by nearly 49%, and the speed and performance of contract interactions have also improved. Recently, I have received a lot of feedback from users saying that we have done well in saving gas. It seems that this is a good reputation.

In comparison, Seaport's gas fees are higher than ours. However, their protocol has been better promoted than ours. For example, our protocol name is very engineering-oriented. The world is not solely determined by technology; sometimes, culture is more important than technology. The West has looked down on us for many years; culture and values are the lifeblood.

Back to the point, our trading market is mainly built on two protocols.

One is ElementEx, which executes our own market transactions. Our trading fees are written here.

The other is ElementSwap, which is the protocol used by our built-in aggregator. Our aggregation protocol does not charge any additional fees.

Using the ElementEx protocol can reduce gas fees by nearly 49%, and the speed and performance of contract interactions have improved, outperforming the industry giant OpenSea's Seaport protocol and far exceeding other trading markets. Additionally, due to further optimizations by our technical team on the aggregation protocol, we actually save some gas in the aggregation market compared to GEM.

You can test it yourself; any market can be compared with us on this point. I should mention that our Element Swap aggregation protocol also saves more gas than GEM, and we will soon have an aggregator 2.0 that may save nearly 1/3 of the gas fees compared to the current GEM aggregator.

We have made three important designs at the protocol level:

• We incorporated assembly language; we did not just use Solidity for programming. The reason for this is mainly to find ways to improve transmission efficiency. In fact, there is a certain difference in transmission costs between Solidity and Assembly. Most of the code in the ElementEx protocol is directly processed using Assembly programming, reducing transmission costs during contract execution.
• During the compilation process, we split the ERC721 and ERC1155 contracts. In the protocol design, the technical team split the import functions for buying, selling, and basic and advanced features, which is clearly aimed at reducing redundant calculations.
• The order status is stored in binary, reusing fields in the order structure by bits, which can improve efficiency and reduce costs.

In summary, we encapsulate it into three key points: we have made relatively advanced processing in transmission efficiency, process redundancy calculation, and storage efficiency.

Based on this protocol, we have developed some powerful functional tools that greatly simplify operations and enhance execution efficiency during transactions, such as batch purchasing, collection offers, and mixed payments. The technical team has also provided a complete API and SDK.

The protocol is significant for a trading market. In a decentralized market, protocols are the operating systems of decentralized applications, like Apple's iOS, Google's Android, and Huawei's Harmony in mobile phones; everything else is built upon an excellent protocol. Protocol iterations are not simple upgrades; they are not as easy as adding a patch to a Web2 application. We are just waiting for various trading platforms to release V2, V3, and V4.

Next, there are already some NFT fragmentation and lending protocols on the market, currently in the professional investors' assessment stage, but they have not sparked a positive response from the general market.

The above are slow and dull changes; greater transformations may come from the following speculations. Better support for trading and financial derivatives, more robust protocols emerging, and whether the composability effects between NFTs and DeFi will occur still require a new bull market. Currently, on Ethereum L2, the Odyssey event was very popular for a while, but the ecological NFTs have basically not taken off.

4. Chinese builders need to compete with OpenSea, and the best starting point is to choose to create good tools.

This sentence was told to me by a friend when I was in Singapore. Especially in a bear market, it is a good time for builders. So we are determined to create good tools and get started.

Our team is a group that is good at learning and executing.

First, we aggregate liquidity to make trading more convenient. We first aggregated OpenSea's trading orders, then aggregated the listing market. After that, we connected orders from platforms like LooksRare. Then we found that it was far from simple to create an aggregation market; it was really key to make the tools user-friendly. User reputation will gradually build up, and community feedback will become increasingly positive.

For example, we proposed and designed with the thought of "saving money and being more convenient."

Furthermore, some team members suggested whether we could achieve "making more money." We will also answer this question.

Secondly, in working on user-friendly tools, design evolution and iteration have been very fast. Over the past four months, we have taken the strengths of various platforms and combined them with community user feedback to launch these necessary killer features. Since this is a voice-mode live broadcast, I asked our team to prepare an illustrated version for everyone, which is intuitive and clear. You can find this message on our Twitter. It mainly includes:

• Cross-market purchases
• Cross-market listings
• Shopping cart (batch purchasing)
• Batch listings
• Batch cancellations
• One-click purchasing
• Collection offers
• Next, we will release cross-market offers, solving the issue of buying well.

I will give further examples. We were one of the first to launch "batch purchasing," which is the shopping cart. We are almost launching new tools every week or two.

For example, the "batch listing function" integrates multiple assets from different collections into a single page for listing across multiple markets. After selecting the NFTs they hold, users can set prices across multiple markets and complete multi-asset, multi-market listings with one click.

"Collection offers" is a feature I use frequently; I have snagged low-priced NFTs through offers, but operating offers one by one is still very time-consuming. This collection offer function allows users to make offers for all assets in a collection with just one operation.

"Batch purchasing" has greatly facilitated the trading process, but the experience is still not smooth enough. The "sweeping mode" experience, with a clever slider design, allows users to smoothly select NFTs from low to high floor prices and add them to the shopping cart for one-click purchasing, making the user experience increasingly refined.

The reason I mention these is that our team believes that the current NFT market has not fully reached a competitive situation like that of CEX; it cannot simply be achieved by funding and market investment. Therefore, we have kept a low profile for nearly nine months. Since last October, we have been thinking about how to create a user-friendly NFT trading market.

We believe that OpenSea has been too slow in product development, misleading many followers. There were industry people who saw our design of Element and said they also forked one. I was actually speechless. Creating this NFT marketplace is not easy. In fact, I believe that even LooksRare and X2Y2 are still in the exploratory phase. It is too early to make assertions about what the future will look like.

We do not need to walk the same path that OpenSea has taken. I told the product team. When it comes to creating good tools, the ability truly depends on the Web2.0 team. Fortunately, our team has experience in developing MMORPG games, which is much harder than this. Much of the work is substantial and requires real effort; there are no simple solutions.

Creating tools relies on refinement. I hope that after today's launch, everyone can open the tools we introduced and try them out; even just clicking to take a look will leave a direct impression. We may already be among the top three trading markets with the best tools, at least.

5. Why does Element have a trading protocol and also embed an aggregator? Unlike GEM, which is a pure aggregator.

Yes, there is an unavoidable question here: how do we view GEM? We consider it an aggregator, a pure tool platform, and it does a good job with data products. However, it is not a large trading market like OpenSea.

Market liquidity comes first.
This statement is a bit grand, but what I mean is to find ways to enhance secondary market liquidity, rather than just looking for a star project to create a primary market; there are many teams doing that, and we do not need to compete with them.

• We insist on creating a good aggregation market.
• In fact, if you cannot do well in the secondary market, you cannot stabilize the primary market.
• When market conditions mature, we will also consider vigorously promoting a Launchpad.
• We actively open APIs.

Not only will we open the API for our trading protocol, but we will also open the API for our aggregation market tools, fully available to third parties; anyone can access it. We have talked to most companies, and everyone believes that the market should naturally open liquidity.

Therefore, it is essential to fully open the API. In fact, aggregation is not a business model; aggregation has become an important gene for the next NFT market. Let me share my personal understanding: aggregation has become an important gene for the next NFT market and is no longer just an independent product concept. During Microsoft's dominance, one of the most commonly used keywords was integration, which was later criticized as monopolistic behavior. Today's post-90s generation may not have a deep impression of this, but in 1998, Microsoft integrated a web browser directly into the Win98 operating system, which caused Marc Andreessen, co-founder of A16Z, to lose the leadership position that Netscape had established in the internet market, leading to its demise. Andreessen later transitioned to become a very successful angel investor and is now one of the largest VCs globally, especially significant in the crypto space.

The term "integration" was mentioned above, but aggregation is different from integration. Integration may involve larger entities overpowering smaller ones, as in "I have already done what you are doing." Aggregation, on the other hand, means "you are in me, and I am in you."

In the era of Google and Facebook, search and social media later rose to prominence by optimizing information aggregation. The keyword has shifted to aggregation.

In the Web3.0 era, the composability we often mention in the DeFi era resonates strongly with today's asset and order aggregation. To allow aggregation to fully share the market growth dividends, we need to propose Open API.

Open API faces an A/B choice—opportunity and challenge.

Third parties can call your order data and use it freely to enhance platform efficiency, but those who do not open will be isolated and will eventually become distant islands. Unlike centralized crypto asset trading platforms, any NFT trading platform must actively open APIs. From a political science perspective, in the great maritime era of Web3.0, those who do not open APIs are engaging in the same factionalism as in Web2.0. In terms of game theory in economics, how to face the prisoner's dilemma, based on the premise of "rational economic man," opening APIs and sharing liquidity throughout the ecosystem can help escape the prisoner's dilemma and achieve Nash equilibrium.

During the peak of Web2.0, WeChat adopted an open platform strategy, and Alipay and PayPal also opened their payment systems based on this consideration. It is precisely because more NFT trading platforms have entered that aggregators can become a natural price comparison system, providing traders with cross-market order books and the best opportunities for floor prices across all markets. Therefore, in a certain sense, the entry of more resource platforms like LooksRare and GEM is mutually beneficial.

We hope to collaborate with everyone. Not only do we aggregate you, but you can also aggregate us, regardless of your business model or resources.

So, we reiterate our commitment to fully open our API.

For those interested in the API, you can refer to the relevant information:

https://api.element.market/openapi/

We unconditionally provide the order book API for our own market protocol. We are currently handing over our aggregation API keys to some potential market collaborators. So far, we have approved API applications from over 40 third parties, including GEM, NFTGo, Amber Lending, NFTtrack data services, OnTo Wallet, and OpenOcean.

Next, we will also unconditionally open the overall business and data API for our aggregation protocol.

In the future market, the competition will be about infrastructure. How could we not open up? Some people interpret our simultaneous development of a trading protocol market and the integration of an aggregator as both the referee and the athlete wanting to do both; this understanding is actually misguided and does not grasp the spirit of the Web, let alone the fact that we are already at the threshold of the Web3 world. Moreover, in any market, the users are the referees.

Currently, we have aggregated trading orders from OpenSea and LooksRare and are acting as their listing agents. Additionally, we are collaborating with the GEM team. We will obtain more market order aggregation through the aggregation API they provide, such as completing aggregated purchases from markets like NFTX and X2Y2 through the GEM API.

In fact, they are becoming increasingly open in trading collaboration. After integrating with OpenSea, they have become noticeably more open and must face competition from Uniswap.

The day before yesterday, we also announced that we would integrate our NFT market with the Web3 wallet Bitkeep and aggregate orders under each other's trading protocols.

A preview: our aggregator protocol 2.0 will be released at the end of this month:

1) It will further reduce gas fees by 6,000 from the original 1.0 aggregator, equivalent to a 30% reduction in transfer fees; (Reference: a standard ETH transfer is 21,000 gas)

2) It will support mixed payments of ERC20 and ETH, allowing users to purchase NFTs in any currency, with automatic conversion by the contract.

3) It will aggregate support for new AMM trading platforms like SudoSwap.

This year's market is not as glamorous as last year's, but it is a time for builders to gather resources and prepare.

In June, OpenSea acquired GEM. In July, Uniswap acquired Genie.

Both NFT and DeFi leaders have taken action to acquire aggregators. It is not difficult to guess their next intentions.

We can only adapt to changes. The only constant is to persist in creating good products.

6. Why do we provide NFT market data services?

First, I want to mention that we have seen enough excellent data products, but we have not seen enough outstanding NFT markets. The reasons are complex; one is that many people think creating a trading market is simple, believing that having traffic and assets is enough. Another interesting phenomenon is that teams that excel in data tend to have strong product and technical spirits.

For example, we see an increasing number of data dashboards; Nansen dominates the professional market, DUNE's data is very authoritative, and there are NFTnerd, NFTGo, NFTtrack, and TwitterScan emerging in the Chinese market. These data products have greatly inspired us in creating the NFT trading market. Currently, there are more and more products providing data services, so many that it is hard to keep up.

Our direction in providing data services is still directly aimed at 2C, not 2B. We have designed the following data products to help users make trading judgments.

Several important points:

• Real-time data tracking; we have taken finer market data granularity, providing data from 5 minutes, 15 minutes, 1 hour, 24 hours, to 7 days and 30 days.
• Trading volume/floor price is fundamental. Our learning about the NFT market began with the change from average price to floor price.
• The current number of whale holdings is our latest offering, allowing users to directly check the number of whales holding in a collection on our site.
• Similarly, we also provide the current number of buyers and current number of listings, which are very intuitive.
• More professional users can find dashboards on our asset analysis page for collections, which include trading scatter plots, listing market analysis, and holder address data.

Most NFT trading markets have directly omitted these efforts.

In fact, we are far from enough; if we had more funds, we would definitely establish a dedicated data product team.

7. How do we view the existing active forces in the current market, and what do we think of the newly entered Sudoswap?

I have previously written about this issue. You can check out my article "Fifteen Observations and Speculations on the Quiet Evolution of the NFT Trading Market Over the Past Year."

If we do not consider the uncertainty of the bear market, if we observe teams that continue to iterate products even in a bear market, this trend is relatively positive.

Currently, the most active market players may develop and derive from the following paths, either from the overflow of OpenSea market users or from new participants:

• Aggregated trading tool streams
• Trading reward operation streams
• On-chain data tracking streams
• The entry of decentralized wallets

Based on my personal intuition, I believe that the three emerging forces will capture an increasingly larger market share, and these three product and operation teams will learn from each other, absorbing each other's strengths in aggregated trading, token-driven governance, and data tracking services. As product and operation iterations continue, the NFT market may gradually evolve into a new paradigm, potentially looking entirely different from today's platform products.

Of course, the above conclusions have a narrow relativity, limited by the fact that the current mainstream protocols still have significant room for improvement, coupled with insufficient product design in guiding liquidity capabilities. Approaching from a completely new angle and breaking through is also highly possible. For example, we see an increasing number of data dashboards; Nansen dominates the professional market, Dune's data is very authoritative, and there are NFTnerd, NFT Go, NFT Track, and Twitter Scan emerging in the Chinese market. These data products have greatly inspired us in creating the NFT trading market.

How do we view Sudoswap?

Finally, someone has taken action to create AMM pools and develop products across the entire chain, truly engaging in liquidity mining—new models and new gameplay. The emergence of completely different product forms in the market is a good thing, but we do not agree with the practice of not writing royalties into contracts. We have always kept a close eye on this, and some members of our internal product team are very fond of it. Just yesterday, we were discussing internally, and we believe that the interests of creators should not be overlooked by the designers of an excellent trading platform, whether decentralized or semi-centralized.

However, it is certain that we will have a timeline for aggregating Sudoswap's trading orders. Overall, this is a very good thing. The emergence of different types of protocols in the market will quickly leverage the composability advantages similar to the DeFi market.

Today's NFT market test is far from over. We must keep working hard and truly keep pace with the times. The crypto market changes too quickly. Next, many issues need to be verified and unlocked through market changes. For those who have played strategy games, the battlefield fog makes it hard to imagine what the next steps will be without activating new maps.

8. Why do we say that Element is a community-driven platform?

I clearly answer that we will fully promote the expansion towards Web3 or DAO economy in the next step. We must change the current situation of the NFT trading market. Users should hold their interests in the market.

Currently, our community is very active, and there is a proposal to establish an ELE DAO.

The initial goal is to change the current centralized decision-making mechanism and gradually drive major issues in the development of the Element platform through DAO governance, such as which chain to develop on, new product planning, and operational incentives, with participants having voting rights. We are looking for suitable tools to achieve this.

Based on the ELE DAO governance economic model, the Element platform can provide seamless incentives to support creators and traders. In collaboration with ELE DAO, we will soon launch three initiatives.

• The first in the world to support the market "invitation + commission" mechanism in the NFT market. We will give invitees up to 50% commission. We are currently discussing this with some KOLs.
• Launching a task reward activity similar to Odyssey called "Element Storm," which will start soon and is planned to last until October 24.
• Collaborating with creators, we will launch a unique support plan—creator certification and reward program.

Thank you all for taking the time to listen to my introduction.