Dialogue He Yi: Is Binance becoming the scapegoat for the bleak market? Let time prove everything

Author: Deep Tide TechFlow

On July 14, 2024, Binance celebrates its 7th anniversary.

Looking back at the entire history of cryptocurrency development, it is inseparable from Binance, just as co-founder He Yi often says, "We are not starting a business; we are creating history."

Whether you like Binance or not, you have to admit that Binance has, in seven years, shaped the history of the crypto industry to some extent.

In 2017, amidst the wild west of cryptocurrency, Binance emerged, and just six months later, its user base surpassed 6 million, becoming the world's leading crypto trading platform by trading volume. CZ graced the cover of Forbes magazine, and He Yi became the only "sister" in the crypto industry.

In 2019, the crypto market experienced a bear market low, with both project teams and retail investors severely lacking confidence. During this low period, Binance launched Launchpad (IEO), raising $7 million in less than 15 minutes for its first project, which saw over tenfold growth after launch, bringing a glimmer of hope to the sluggish market. Subsequently, other exchanges followed suit, and the crypto market gradually regained vitality.

As of July 2024, the cumulative return on investment for all projects on Binance Launchpad remains as high as 16 times, leading the pack, with the highest historical ROI nearing 200 times!

In 2020, that summer belonged to DeFi, and as a representative of CeFi, Binance did not miss out on this feast. In April 2019, Binance took the lead again by launching Binance Chain; in September 2020, it launched the EVM-compatible Binance Smart Chain (BSC). To this day, BNB Chain remains one of the top public chains with the highest daily active users.

In 2022, with the cascading failures of FTX, Three Arrows Capital, and others, the market entered its darkest hour, and the industry fell into a crisis of trust. Binance launched a $1 billion industry recovery fund and was the first to propose that exchanges adopt Merkle Tree reserve verification, which has now become an industry standard.

In 2023, a year of regulation, Binance agreed to pay $4.3 billion to settle charges with the U.S. Department of Justice, Treasury, and Commodity Futures Trading Commission (CFTC). New CEO Richard Teng took office, leading Binance into a new chapter of compliance.

In 2024, with the approval of the Bitcoin ETF, Binance continues to strengthen its compliance efforts. However, the rollercoaster market and the collective downturn of altcoins have led public opinion to target Binance, claiming that Binance's frequent listing of new coins/VC coins has drained liquidity.

On the evening of July 12, Binance co-founder He Yi expressed her helplessness regarding this viewpoint during an interview with Chinese crypto media (Foresight News, Wu Shuo, TechFlow, Odaily). She stated, "Let's talk with statistics. From last year to this year, the number of coins listed on Binance is only over 30, while some platforms in the market have started with 100. It's equivalent to saying that Binance shouldn't list any coins at all, leaving only Bitcoin…" In He Yi's view, the market performance is below expectations, so people need to find a target to attack, and Binance has become that target.

In response to the frustration of entrepreneurs under the MEME wave, He Yi shared her life philosophy: Unity of knowledge and action. You must believe in something and stick to it; only through repeated persistence will the results manifest.

"When BNB was launched in 2017, others laughed at BNB, saying it was ridiculous for a non-public chain to issue coins. More often than not, it's not that they don't know, but that it's harder to achieve."

Below is the interview record with Deep Tide TechFlow:

Deep Tide TechFlow: According to public opinion on various platforms, Binance's coin listings have been controversial this year. One reason is that the number of new coins listed is relatively high and the speed is fast. The second reason is that most of the listed coins are closely related to Binance's strong interests, leading people to feel that both retail investors and project teams are working for Binance during this cycle. What is your perspective on this, and what is Binance's value proposition for listing coins?

He Yi:

The first part is whether the speed of Binance's coin listings is a fact or an opinion. The fact is that we can speak with statistics. From last year to this year, the number of coins listed on Binance is only over 30, while some platforms in the market have started with 100. It's equivalent to saying that Binance shouldn't list any coins at all, leaving only Bitcoin and shutting down Binance. Does this represent Binance's interests or those of other exchanges? I'm not quite sure. Facts and opinions are something I'm trying to help my 5-year-old son understand.

This world is still quite easily influenced by emotions. Many times, people are more swept up by the emotions brought on by market downturns, looking for a target. But is this a fact?

When we say that most listed coins have interests related to Binance, it involves two questions. If Binance only lists projects related to its own interests, then most of these coins might not even be able to list on Binance. Many projects either didn't receive investment from Binance or only received a small amount, like 0.1. A few years ago, some investment managers would say they could give you a discount for investing 0.1.

Is it a fact or an opinion that most listed coins have interests related to Binance? This also requires effective argumentation. What percentage does Binance hold in these projects to be considered related to its interests?

When we list some projects, we often ask, "Are you willing to do a Megadrop on Binance, or are you willing to do a Launchpool on Binance?" If the project team is willing, there's no need for any manipulation. Many manipulation studios have fake accounts; Binance provides real users. The airdrop can be directly given to Binance's online users, who are at least real and have verified KYC and facial recognition. Currently, those claiming Binance tokens are indeed retail investors, and Binance has not participated. If Binance wanted to charge a listing fee, it could just ask directly. Do you think Binance needs to go around in circles with project teams? No, who would look down on whom?

Essentially, people are not angry because they feel that retail investors or project teams are working for Binance during this cycle; it's because the market performance is below their expectations, and the return on investment is lower than anticipated. So at this time, they need to find a target to attack. People think they should hang Jack Ma on a streetlight or hang He Yi on a streetlight; this is what's happening right now.

I initially tried to explain what was happening, but ultimately found that when public emotions overwhelm everything, this explanation is ineffective. Rather than that, I choose to stay silent and focus on what I'm doing at the moment. Time will validate everything; the journey will reveal the horse's strength, and time will show people's hearts.

The second point is that people need to understand that Binance's business is not limited to just one aspect. Essentially, Binance provides users with trading products or non-trading products of varying risk scales. For most ordinary people, if they feel satisfied with an annualized return of 10% or 20%, Earn is still a good product. Even investing in stablecoins like USDC for wealth management seems fine. But if your expectation is to seek hundredfold or thousandfold returns, that might be problematic.

As the industry matures, the information gap will also shrink, and competition will become increasingly fierce, leading to lower investment returns. People tend to hope that no matter what coin Binance lists, as long as they buy it, it will rise. This expectation may have a significant gap. You can't say that if I buy coins on other trading platforms and they fall, it's normal, but if I buy coins on Binance, they must rise.

I think it's essential to understand that the fundamental function of a trading platform is to provide relatively popular and high-heat projects to everyone. In this process, we hope to filter out those projects that run away after three days and identify those with a chance of success or longevity. However, this does not mean that the coins listed on Binance will only rise or that they will definitely rise.

**Deep Tide TechFlow: Recently, it has been observed that people's confidence in the industry has declined. On one hand, the market is not performing well; on the other hand, there is a sense of ideal disillusionment, or a temporary rupture of the technological narrative. People feel that the so-called technology and products are merely disguises, and the essence of this industry may still be the game of liquidity, emotions, and chips. Entrepreneurs may feel that creating a product is not as good as launching a MEME; retail investors may also feel that trading technology is not as good as trading MEME. Many times, half of the top ten trading volumes on Binance are MEME tokens. Do you think this will become a norm in the future of the crypto industry? Will there be truly *external* crypto applications in the future?**

He Yi:

As you said, if half of the top ten trading volumes are MEME, what happens if Binance doesn't list MEME? The trading volume and users will go to other platforms. So many times, we have no choice; if you don't list MEME coins, there are plenty of trading platforms that do. Additionally, there's DeFi, so it's not that the entire industry is working for Binance; rather, many times, we can only make a compromise and try to maximize value.

In this cycle, this is not a unique phenomenon. In 2014, people thought everything except Bitcoin was garbage. In 2017, people also thought that what they were trading was garbage; we were all here to gamble. Many people interpret trading behavior as a gambling behavior. Whether in traditional financial markets or the crypto market, it is indeed heavily influenced by emotions, which is a fact.

However, this does not mean that doing a good job in product development or building a business model is invalid. During every market boom or emotional fluctuation, ordinary investors and entrepreneurs indeed face a shock.

I often emphasize to my team members that unity of knowledge and action. You must believe in something and stick to it; only through repeated persistence will the results manifest.

We all know from a young age that if you study hard, your exam results won't be too bad. Many people know this but can't do it. We all know that if you want to lose weight and achieve a good body shape, you need to control your diet and exercise, but you can't do it. Every day, there are temptations telling you to enjoy the moment, eat well, and drink well; you end up gaining weight first and then trying to lose it.

You can understand that both the entrepreneurial market and the investment market are similar. When you want to stick to your ideals and pursue innovation, others may tell you that it's better to do something trivial, like launching a MEME, rather than focusing on technology.

Looking back at when BNB was launched in 2017, others laughed at BNB, saying it was ridiculous for a trading platform to issue coins. More often than not, it's not that they don't know, but that it's harder to achieve. This industry is the same; everyone knows that product innovation and technological innovation are needed to create effective, good, and truly user-oriented applications that can impact the world, but achieving this is much harder.

Deep Tide TechFlow: Many veterans in the industry are starting to pursue their passions outside of the crypto industry. CZ is building an education business, and the founder of Coinbase has also founded a biotechnology company focused on longevity (anti-aging). If you had the opportunity to do something you love outside of the crypto industry, what would you choose?

He Yi:

I haven't thought about this. Outside of the crypto industry, I might find it hard to have an interest in entrepreneurship.

I think this might be a personal characteristic of mine. I studied education and was a teacher; I have a bit of a teaching spirit. I personally hope to help others succeed; only by helping more people succeed can I succeed.

I find it hard to imagine what else outside of the crypto industry would be worth my time and energy. Perhaps it would be helping more people succeed, returning to investment, and figuring out how to provide everyone with an effective mindset.

I understand CZ's involvement in education as a passive choice; to be precise, he has nothing else to do and is looking for something to do. The founder of Coinbase's choice can also be understood. In this world, the speed of AI development is so fast that AI is indeed a more advanced intelligent agent than humans.

Humans are essentially a relatively simple code design; the logic of input and output is relatively predictable. However, humans often have bugs because the gap between knowing and doing is quite large; most people know but cannot do.

If you look at the entire history of humanity, the poor want to make money, and the rich pursue longevity. Once a person becomes wealthy, what they do can generally be predicted. Under this structure, I think it's not just the founder of Coinbase; some older OGs in our industry, after making money, have more children to ensure their DNA continues, and secondly, they pursue longevity and a better quality of life. This is a normal logic; enjoying life moderately and pursuing quality of life are all foreseeable.

However, this does not mean that when some OGs leave the industry, the industry becomes untrustworthy, nor does it mean that when some financially free people enjoy life, others lose their opportunities. On the contrary, it is precisely because some people leave that there are more opportunities.

Deep Tide TechFlow: In the past, people often compared Binance to Tencent in the crypto world. After the 3Q war, Tencent changed its mission to become the most respected company. In the coming years, when discussing the history of cryptocurrency, Binance will undoubtedly be a key player. How do you hope people will evaluate Binance at that time?

He Yi:

I've said this many times since 2017, "We are not starting a business; we are creating history." I have believed in this since the day I joined. I believe that blockchain will bring future changes and possibilities to this world. My logic is that because I believe in it, I will go all in on this matter and fully invest myself in it.

Can everyone understand why I resolutely left during the "Ninety-Four" incident to do this? Because I saw the potential changes that blockchain technology could bring to the world amidst the tide of the times. Therefore, I am willing to invest myself in this mission, and I also believe that more excellent entrepreneurs and talented individuals will join us in this endeavor. A single spark can start a prairie fire; you can see it because you believe in it. If you don't believe in it, you can't make it happen.

Other Q&A Sections

Wu Shuo: Many project teams hope to gain investment from Binance. What are the most important criteria for Binance when investing?

He Yi:

I can align my understanding of investment with everyone.

For blockchain technology to become mainstream and be used by more ordinary people, it needs to cross the chasm, and behind that chasm must be genuine innovation-driven efforts. Labs has invested in around two thousand projects, or at least a thousand for sure. However, to be honest, I haven't talked to most of these projects, nor have I communicated with them.

Basically, Labs' investments look at several framework elements. The first is whether the founder is a long-term thinker and whether they believe in this industry. If they are just gambling and running away, they are no different from gamblers. Even if they succeed, they will ultimately sell their coins and run away.

The second very important point is their skills and what they have done. For example, if someone is a KOL with 1,500 people in their Telegram group, and they shout about a coin's price rising, would you invest? They might help a project with promotion, but that doesn't mean they are a good investment target.

The third is their thinking structure; is their entire growth capable of continuous iteration? Many people can be very resourceful, even if they start from a low point, but they can keep iterating. You can generally make a judgment during the dialogue process. Do they have a vision for the industry? What is their understanding of the world? What is their or their team's capability model? If they pass the basic criteria, we are still willing to invest some money to nurture them. As for whether this can rise or achieve the so-called 100% success, that fundamentally does not exist. You see, traditional VCs invest in ten projects, and nine of them fail, with only one succeeding; this is very common.

Labs' investment in this matter still hopes that the industry will have more innovators who can emerge and continuously build confidence for everyone. Whether it is the long night of everyone's emotions or the long night before a significant technological leap, if you do not support others, you will ultimately be a lone traveler. If there is only yourself on this road, it cannot be called an industry.

Odaily: As a co-founder of Binance, you have already achieved financial freedom and have not considered retiring and handing Binance over to professional managers. Can you share your future plans, such as how to find a balance between work and family?

He Yi:

First of all, because I am a woman, people wouldn't ask a man how to balance family and work. Whether for male or female entrepreneurs, the fundamental issue is time management.

The first point is that I believe in spending more time on more important things.

The second point is a concept of time granularity. I usually don't spend too much time on face-to-face communication; I prefer to keep meetings within 30 minutes. If it's a more effective meeting, I hope to control it within 15 minutes. So, essentially, it's a matter of managing time granularity. These two points are quite meaningful to me.

I am personally someone with a strong sense of responsibility, hoping to build Binance into a sustainable system where every module and every professional manager can cultivate enough successors who are more outstanding than me, have better backgrounds, and stronger expertise. The goal is to organize these people together to maximize their value; I think this is still a thirst for talent. A team with enough strong people, where each person manages better than I do, is when I just need to ask a question.

I have previously mentioned that I particularly admire Duan Yongping. After retiring from Bu Bu Gao, he can still have VIVO, OPPO, and Xiao Tian Cai watches. This is a successful retirement; it doesn't matter whether he retires or not; his structure is well built. If he has a good talent team, the concept of retirement becomes unimportant.

Foresight NEWS: Historically, many well-known leading companies have vanished in an instant, such as Nokia, Netscape, and Yahoo; while some companies are evergreen, like Apple and JPMorgan. In an industry where innovation is rapid, even giants can fall from their peak to oblivion in a short time. What major crises do you think Binance currently faces, and how are you responding to them?

He Yi:

I am a person with a strong sense of crisis. From the perspective of the entire industry, the biggest crisis is undoubtedly regulatory risk, which is not just for Binance. Although we have just passed a hurdle in this regard, regulation remains a significant challenge.

The second crisis is the competition and innovation crisis within the industry. Currently, the competition among exchanges is parallel, and the core skill points of each exchange are not significantly different. We are also continuously learning from others and improving. The greater crisis actually comes from unknown uncertainties and innovations. Therefore, we encourage continuous experimentation with new things from both an investment perspective and among internal employees. If colleagues want to pursue innovative businesses or have entrepreneurial ideas, we fully support them.

Essentially, all threats do not purely come from known competitors but from environmental uncertainties and new innovations. If new innovations emerge and you are unaware, that is the biggest crisis. Just like how mobile phone giants did not realize what the emergence of smartphones meant for them.

The entire industry has developed to a point where it is difficult to exist as a niche startup like in the past. Now, effective communication with regulators and policymakers is necessary. Personally, I spend more time focusing on how to transform a startup company supported by the founder's charisma and capability into a sustainable company. This requires enhancing organizational capability. If the organizational capability is strong enough, it can continuously cultivate good seed players.