OKX Friends Issue 02 | Dialogue with Independent Researcher Chen Jian: Experience Sharing and Industry Insights from a Cross-Industry Tech Expert

Guest Message: As a practitioner, I am definitely optimistic about Web3 in the long term, and there are indeed very few industries like Web3 that have such benefits and a low entry barrier for ordinary people. OKX's investment and leading position in Web3 wallets allow us to see the responsibilities and vision that a leading exchange in the industry should undertake. I truly find Web3 wallets very user-friendly and smooth; I have almost stopped using various other swaps.

Chen Jian, an independent researcher, spends a considerable amount of time sharing thoughts and research on the industry and projects on Twitter. In addition, he also personally participates in supporting some early-stage projects as a consultant and investor. He was introduced to blockchain technology during his graduate studies in 2017. After graduation, he joined Alibaba and re-entered the blockchain technology field due to a collaboration opportunity with Ant Chain. He later joined Sequoia Capital's Sequoia Scholars program and, having found limited development opportunities in the internet and traditional finance sectors, ultimately decided to fully commit to the Crypto industry.

Currently, Chen Jian focuses primarily on researching the industry and projects, sharing extensively on Twitter. On one hand, he engages in cryptocurrency trading, while on the other hand, leveraging his technical background and work experience in the internet and finance sectors, he gradually shifts towards the upstream of the industry, communicating with primary market projects and institutions, assisting project development as a consultant and early-stage investor.

Given his rich experience and the broad representation of the player group he embodies, OKX has specially invited him to be a guest speaker in the "Friends of OKX" series, hoping that his transformation journey and understanding of the current state of the industry will be helpful to Web2 tech talents who are observing Web3.

++The "Friends of OKX Series" is a special column produced by OKX, hosted by OKX official community ambassador Mercy (@Mercy_okx). It aims to provide new users with learning references by exploring the stories, industry insights, and lessons learned from KOLs with diverse backgrounds.++

1. Sharing Experience of Transitioning from Web2 to Web3

Mercy: As someone with experience in large companies and well-known funds, what natural advantages do you think technical practitioners have in the Crypto field? Do you have any advice or experience to share for tech leaders seeking to transition into Web3?

Chen Jian: Although Web2 experience has almost no direct application in Web3, there is still a significant potential for reusing specific skills and work methods. For example, if you previously worked on user growth or operations in an internet company, those ideas are equally applicable in Web3 projects. We can see that some well-known founders of Ton ecosystem projects were previously responsible for user growth in large internet companies.

However, the situation is different for product managers. If you were a product manager in a Web2 company, I suggest you completely abandon your past product methodologies, as the product logic in Web3 is entirely different.

From a technical perspective, the Crypto industry is still driven by early technological narratives. As a developer, the technical dividends you can gain in this industry are quite substantial. These dividends are mainly reflected in the following aspects:

1. Although the effect has weakened now, during the last bull market, simply being able to write scripts allowed for arbitrage, and many people made a lot of money from it.
2. You can become a technical contributor. For example, the education academy created by 0xAA, ++@WTFAcademy_++, has received funding from many well-known public chains. This is both a public welfare education initiative that encourages more people to participate in blockchain, and its commercialization transformation has also been very successful.
3. Developers are the most scarce group in this industry because they can bring activity to the chain and create ecological opportunities for projects. Therefore, various projects are competing for developer resources.
4. You can participate in on-chain activities, develop small projects, or even become a bounty hunter in hackathons. Although this behavior is difficult to evaluate as good or bad, it is indeed a way for developers, project parties, and ecosystems to meet their respective needs.

Even if you don't write code directly, as long as you have an understanding of the overall technical framework and can read code, you can conduct project research and make judgments about projects. This judgment can be used for secondary market trading or for primary market investment or to become a project contributor.

In summary, if you are currently a developer, as long as you find the right way to enter, this industry will still bring you substantial returns.

Mercy: Considering the current state of industry development, which tracks should new developers entering Crypto and Web3 focus on to accelerate their growth?

Chen Jian: For new developers, my advice is:

First, you must find an organization. You can join a developer community or participate in several hackathon projects. Even if you are just helping out, this is very important. Practicing through this organization and participating in actual development work is crucial. Try not to reinvent the wheel on your own.

Second, consider platforms like the WTF Academy created by 0xAA. It gathers many developers, and you can submit code on GitHub to contribute your efforts. Even if you are just taking courses, collecting badges, and then joining developer communities, this is also a very effective path.

In summary, joining communities and participating in practice is the most effective growth path.

Mercy: What are your thoughts on the recent Token2049 in Singapore?

Chen Jian: My overall impression of this year's 2049 is that compared to last year, there doesn't seem to be any new track or sector that feels like it's gaining momentum. Last September was right at the intersection of the bull and bear markets, and there were still many new things to see. For example, I wrote a short article last year predicting that the Ton ecosystem would rise. But this year, after thinking it over, it feels like everyone is either very mature in what they are doing or in a state of anxiety, with no obvious new tracks or sectors emerging.

From the perspective of the entire industry, I feel that everyone is quite anxious. Whether in the primary or secondary market, it seems that not much money has been made this year. VCs appear to have made money on paper, but in reality, they haven't realized those gains. Traders in the secondary market are generally stuck, and project parties are also very anxious. Projects that have already launched coins are waiting to cash out to continue their work, while projects that missed the golden window in March to get listed on major exchanges are now trying to find ways to issue their tokens by the end of the year.

The fundamental reason for this state of anxiety is the lack of liquidity in the market, which cannot absorb the volume. Not only are project parties and VCs anxious, but even the agencies that help project parties with marketing are also anxious. I sense that the businesses that can truly help project parties or VCs solve liquidity issues are the ones that are still making money, and they are doing quite well. Besides that, everyone is generally anxious and losing money.

As for hot topics, there hasn't been anything particularly obvious this year. The Ethereum ecosystem is hard to describe, and Layer 2 has already become aesthetically fatigued. The Solana ecosystem is lively, but no particularly new things have emerged. We are thinking about what Solana's third growth curve will rely on; some are discussing concepts like DePIN, but those aren't particularly novel either.

Regarding the Ton ecosystem, I am personally trying to support some projects. Although I predicted last year that the traffic dividends of the Ton ecosystem would rise, the actual projects I participated in were still quite few. Now I am starting to change my view; through engaging with some projects, I find that the quality of traffic in the Ton ecosystem seems to have improved. Although there are still a lot of bots and junk accounts, compared to the currently rampant infrastructure projects, the Ton ecosystem at least provides a space for users to interact and operate.

Overall, I feel that various sectors may be in a relatively anxious state, all searching for their second or third growth curve.

2. Discussing Views on Popular Ecosystems like Ethereum, Solana, and TON

Mercy: As an independent researcher, how do you view the development trends of the Crypto industry over the next one to two years?

Chen Jian: First, I want to emphasize that as industry practitioners, we must maintain an optimistic attitude towards Crypto. If you think this industry is going to fail, then you should leave as soon as possible. This is not only a professional attitude but also essential for your long-term survival in this industry.

From a rational perspective, I believe that next year's market will be relatively good. The world is easing and cutting interest rates, and aside from US stocks, Crypto seems to be a better investment choice. However, when it comes to practical operations, the current market state is indeed perplexing.

Currently, there are two main points causing panic: First, Bitcoin is still hovering above $60,000, while altcoins have dropped to levels lower than during the bear market. If Bitcoin fluctuates slightly, altcoins may suffer even greater impacts. Second, it seems that this industry is still dominated by off-exchange funds; for example, we are constantly monitoring the inflow and outflow of funds related to ETFs.

From the perspective of the primary market, I believe that current projects can be divided into two categories. The first category is "similar" projects, where the teams, sectors, and valuations are not luxurious or top-tier, but also not grassroots. These projects are currently in a difficult situation, and I suggest they prioritize generating revenue, whether through gas fees, selling nodes, or other means, as long as they can create actual interactions for users on their products. They should focus on this rather than rushing to issue tokens; perhaps they can survive without issuing tokens, but once they do, they may die faster.

The second category consists of projects with unique advantages that occupy key positions in their sectors or have excellent teams and VC backgrounds. If you are optimistic about next year's market, issuing your assets now while you are at the "halfway up the mountain" or "at the foot of the mountain" might be a good choice. However, it is important to note that if your project cannot get listed on major exchanges and lacks top-tier institutional support, getting listed on smaller exchanges may be quite bleak.

I also want to remind everyone, especially retail investors, to pay attention to two types of projects: first, those that purely lack revenue models, and second, those that have made a lot of money before issuing tokens. The former may only be able to recover by selling tokens, while the latter, although appearing wealthy and ambitious, may not necessarily use that money to support token prices.

In summary, I believe there is still significant growth potential in the Crypto industry over the next 1-2 years. However, in terms of operations, traders need to make choices based on their risk preferences and market judgments.

Mercy: Vitalik recently stated on Twitter that next year he will only focus on Layer 2 projects that have reached a certain stage. How do you interpret the meaning behind this statement?

Chen Jian: Vitalik's statement mainly has two implications. First, he categorizes Layer 2 projects into three stages, with the highest stage being fully decentralized Layer 2, including decentralized sequencers. This aligns with Ethereum's technical roadmap and philosophy. Vitalik hopes to guide more Layer 2 projects to develop in this direction.

We know that the main way Layer 2 projects make money, aside from issuing tokens, is by earning transaction fees. These fees are usually earned by the projects' own nodes. Faced with such significant interests, it is very difficult to require Layer 2 projects to be decentralized. However, if Layer 2 is not decentralized, it contradicts Ethereum's future development direction. Therefore, Vitalik hopes to guide Layer 2 towards decentralization through this approach.

But I believe achieving this goal will be quite challenging for two main reasons:

1. The power of interest groups is too strong. Leading Layer 2 projects like Base, Arbitrum, and Optimism have very substantial gas revenues. Especially for projects like Base that do not issue tokens, if they do not earn through gas fees, it is equivalent to doing public welfare.
2. The development prospects of the Ethereum ecosystem are concerning. Although I personally mainly participate in the Ethereum ecosystem, I must admit that Ethereum's performance in this round has been disappointing. Many analyses have pointed out the current issues with Ethereum.

Despite this, I still believe that in the long run, Ethereum remains the ecosystem with the highest level of decentralization and spirit. The Ethereum Foundation's mission and entire roadmap are dedicated to being as open and decentralized as possible. Therefore, I believe that in the long run, Ethereum will still be a field capable of nurturing innovation.

Regarding the Layer 2 track, my view is: if you are a consumer-facing application with a large user base, issuing your own Layer 2 or application chain is a great choice. This way, you can not only earn money by issuing tokens but also continuously generate income by charging users gas fees.

However, for platform-level Layer 2 projects, I have lost interest. I have even started to refuse to cooperate or participate with such projects as much as possible.

Mercy: Ecosystems like Solana, Ton, and Base are still receiving a lot of attention. In your judgment, what opportunities exist within these ecosystems?

Chen Jian: Let me elaborate on this, starting with the Ton ecosystem that everyone is concerned about.

I believe the Ton ecosystem is worth continuous attention. Although its first phase (a large number of ineffective interactions to obtain incentives) may have ended, I have recently come across some projects that genuinely engage users, showcasing new development trends. These projects are not only creative but also incorporate real social attributes and assetization capabilities. I believe the second growth curve of the Ton ecosystem may come from such projects.

Next is the Base ecosystem. The main issue with Base is that, although the trading volume is high, the leading projects are still Ethereum-native projects like Curve, Aave, and Uniswap. This feels more like a migration of old projects rather than the emergence of new ones. Logically, the Base ecosystem should not be thriving because it has not issued tokens and has not provided expectations for token issuance. Yet, it can generate such high trading volume and TVL, which is quite unusual. This may indicate that there are powerful backers or "conspiracy groups" driving it. If you can integrate into the Base ecosystem, there may be good opportunities. However, if you rashly enter just because of the high trading volume on Base, you might fall into a trap.

Lastly, regarding the Solana ecosystem. Although I mainly participate in the Ethereum ecosystem, I do not reject trading in the secondary market of Solana. Last September, when Solana was priced at $18, I wrote an article analyzing why I chose to buy in. However, from the perspective of the primary market, the opportunities to participate in the Solana ecosystem may have diminished. We can see that many new projects have emerged in the Solana ecosystem recently, but almost all the founders have a Solana background, which means the ecosystem has formed a relatively closed loop, making it difficult for purely external entrepreneurs or investors to intervene.

In summary, these ecosystems all have their unique opportunities and risks. As entrepreneurs or investors, the key is to choose the right ecosystem to participate in based on your strengths and judgments. At the same time, always stay vigilant, manage risks well, and exit in a timely manner when appropriate.

3. Discussing OKX's Product Experience and Suggestions

Mercy: The Web3 industry has been eagerly anticipating the next big explosion. From your perspective as an independent researcher, what role will OKX play in this process?

Chen Jian: First, I want to state that this is definitely not flattery because this is OKX's occasion. I genuinely believe that OKX is a very solid exchange. Through my interactions with OKX employees, I deeply feel their love for the company, which stems from their belief that they are making substantial contributions to the industry.

One of the best examples is the OKX Web3 wallet. Since I started using this wallet, I have almost stopped using other DEXs or swap tools when buying projects on-chain. The user experience of the OKX Web3 wallet is very smooth. I have a few friends working on the OKX Web3 wallet team, and they respond very promptly to user feedback.

As far as I know, OKX has invested a lot of manpower to refine this wallet product, and currently, this wallet is non-profit, meaning that users will not be charged extra for interactions on it. This determination and courage are admirable. Additionally, the OKX wallet is also providing technical solutions to other exchanges, marking OKX's leading position in the transformation from "exchange to wallet" and "Web2 to Web3."

Of course, returning to the exchange itself, we also hope that OKX can continue to strengthen its core business in trading depth, new coin listings, and mining activities. But in terms of product strength, OKX is undoubtedly very competitive.

Regarding how to attract new users, I believe there are two levels: one is to enable users to hold assets on-chain, and the other is to facilitate user interactions and trading on the exchange. OKX has opportunities in both areas. Especially in terms of scenario-based applications, if a project similar to STEPN emerges that can attract new users while generating trading, OKX's previous investments and product accumulation will have the chance to capture this wave of traffic.

In summary, I believe that exchanges should not only focus on trading as a single scenario but should also invest energy in some forward-looking reserve work, even some seemingly unprofitable public products. OKX is doing well in this regard.

Mercy: Do you have any suggestions for OKX's future technological development or product experience?

Chen Jian: OKX's products, especially the Web3 wallet, have been done quite well, and the user experience is very smooth.

However, for the exchange itself, I hope OKX can continue to strengthen its core business in trading depth, new coin listings, and mining activities to enhance its competitiveness.

Additionally, I believe OKX could consider further expanding into the payment sector. If it could launch a product similar to a Visa card, allowing users to directly use funds in their exchange accounts for daily consumption, it would greatly enhance user stickiness. This would not only allow users to view OKX as a trading tool but also as a payment solution in their daily lives.

Overall, if OKX can enable users to directly use funds in the exchange for daily consumption, rather than just treating the exchange as a tool for market observation, it would be a very promising development direction.