OKX University Interview ｜ Feng Yu: Insufficient Users is the Biggest Bottleneck in the Industry During This Cycle

Feng Yu is an assistant professor at the University of California, Santa Barbara. He obtained his Ph.D. in Computer Science from the University of Texas at Austin (UT Austin) in 2018. His research areas include blockchain security, programming languages, and formal verification. He is currently the founder and CEO of Nubit.

Since 2011, he has been engaged in formal verification research, focusing on the security of various software systems, ranging from browsers to mobile applications. During his Ph.D. studies, he conducted in-depth research on distributed systems and security protocols, gradually realizing the immense potential of blockchain technology in building secure and decentralized systems. The management of virtual currency assets also made them frequent targets for hackers, which motivated him to dive into the Web3 field, aiming to promote the security and efficient development of the blockchain ecosystem through academic research and practical applications.

We hope to observe the development of the Web3 industry through the perspectives of entrepreneurs from global universities and to explore their experiences in the Web3 industry, providing references for university students entering Web3 for employment and entrepreneurship. In this issue, we are particularly pleased to invite Professor Feng Yu to be a guest speaker for the "OKX University Interviews."

++The "OKX University Interviews" series is a special column produced by OKX, hosted by OKX official community ambassador Mercy (@Mercy_okx), aiming to explore the industry perspectives of global university personnel and provide references for those starting businesses and seeking employment in Web3.++

1. First, please introduce yourself briefly.

I am Feng Yu, an assistant professor at the University of California, Santa Barbara, and I obtained my Ph.D. in Computer Science from the University of Texas at Austin (UT Austin) in 2018. My research areas include blockchain security, programming languages, and formal verification. I am also the founder and CEO of Nubit.

Since 2011, I have been engaged in formal verification research, focusing on the security of various software systems, ranging from browsers to mobile applications. During my Ph.D. studies, I conducted in-depth research on distributed systems and security protocols, gradually realizing the immense potential of blockchain technology in building secure and decentralized systems. However, with the booming development of the blockchain field, the management of virtual currency assets has also made them frequent targets for hackers. For this reason, I decided to dive into the Web3 field, aiming to promote the security and efficient development of the blockchain ecosystem through academic research and practical applications.

I clearly remember that when I first joined UCSB in 2018, the price of Ethereum was only $80. The department chair kindly reminded me, "Little Feng, this Ethereum is going to zero; why are you researching this?" I really appreciate one aspect of the American academic community, which is the ability to maintain my judgment against the suggestions of the department chair and dean (of course, I do not advocate being stubborn). At that time, I was full of passion for technology but had no concept of coin prices and didn't even have an exchange account.

In the following three years, my doctoral students and I achieved some results in the fields of blockchain smart contracts and zero-knowledge proof security. In 2022, through my former colleague Shumo (co-founder of Manta), I met Luke from Polychain. At that time, Luke mentioned, "DeFi Summer was indeed exciting, but the frequent hacking incidents that followed have caused headaches for investors; why don't you start a startup?" I replied, "I don't understand the process of starting a company, and I don't have funding…" He said, "We support you!" Thus, I founded Veridise and officially embarked on the entrepreneurial journey in Web3.

In the early stages of entrepreneurship, friends from various sectors of the crypto world provided me with tremendous support, allowing me to move forward despite my stumbling. At the same time, with the support of the Ethereum Foundation and 0xparc, we conducted several research and product development projects on zero-knowledge circuit security and audited several leading ZK projects. However, contrary to expectations, due to inconsistent management philosophies, I decided to exit Veridise earlier this year. At that moment, my feelings were complex; it felt like giving up a child I had raised myself and failing to protect it carefully. It was especially regrettable to see the company miss opportunities and fail to realize my ideal vision, disappointing those investors who trusted me unconditionally.

After a few weeks of adjustment, my doctoral students and I established Nubit, aiming to develop the infrastructure for the data layer and execution layer for the Bitcoin ecosystem, leveraging our expertise in security. To my surprise and delight, nearly all of Veridise's investors expressed their support upon learning about my newly founded Nubit project. Even though I failed to fulfill my initial promises at Veridise, they still trusted my character, and this trust became a significant driving force for Nubit's rapid growth. With the full support of old friends like Tekin from dao5 and Luke from Polychain, Nubit rapidly developed in just five months, completing three rounds of financing and becoming a new force in the Bitcoin ecosystem.

2. What is your view on the current state of the Web3 industry? What will be the driving forces for the industry's future development?

I believe that the current Web3 industry faces both challenges and opportunities. Although the market has experienced multiple rounds of cyclical fluctuations, the infrastructure and ecosystem are continuously maturing. However, there has been an increase in criticism of infrastructure projects, especially within the Ethereum ecosystem. To some extent, it is true that the entire Web3 industry has invested a significant amount of manpower and financial resources in infrastructure over the past few years. In this round of cycles, both infrastructure projects and the entire industry have encountered bottlenecks in large-scale applications—specifically, a lack of users. However, public opinion seems to have swung to the other extreme, questioning the role of technology and instead promoting phenomena like meme culture. Of course, some project teams do indeed raise the banner of technology but fail to deliver substantial results, leading investors and users to steer clear of overvalued infrastructure projects.

At this point, I believe we need to maintain a clear understanding. There is an ancient saying: "History is a mirror that can reveal the rise and fall." I remember over twenty years ago, when my family's small house first connected to the internet via dial-up, the browser opened to a flood of ad-filled pop-up windows, and clicking on them would lead to countless more, ultimately forcing a shutdown. The internet infrastructure already existed at that time, but no one could grasp what changes it would bring to ordinary people's lives.

Today, the traditional internet has profoundly changed our lives. What I want to express is that we need to adopt an open, inclusive, and dialectical attitude toward the development of this industry, giving entrepreneurs more time; perhaps in a few years, we will see the emergence of Web3's Google, Facebook, and Twitter.

Of course, I am not trying to shirk the current problems in the industry. The Web3 industry indeed faces some urgent challenges that need to be addressed, such as security, scalability, and user experience. Security is particularly critical, as vulnerabilities in blockchain systems and smart contracts can lead to severe economic losses. Some OGs believe that the current decrease in hacking incidents is due to the efforts of auditing companies, but in fact, the frequent hacking incidents in the previous cycle were precisely because the DeFi Summer was a time of flourishing innovation alongside vulnerabilities. In this cycle, many projects are only engaging in simple operations like staking, leaving hackers with little to exploit (although incidents like the bedrock hack still occur). This is also why I continue to focus on blockchain security and formal verification, aiming to enhance the security and reliability of the entire ecosystem.

Looking ahead, I believe the driving forces for the industry's development will mainly manifest in the following aspects:

1. Technological Innovation: In academia, AI technology has permeated multiple fields in just a few years, and AI + blockchain has become a hot topic in this cycle. However, there has yet to be a killer application that combines AI and blockchain; some project teams use AI as a guise while engaging in meme activities. Nevertheless, I believe that AI + blockchain applications will eventually materialize.
2. Security Assurance: Enhancing the security and reliability of systems through smart contract audits and formal verification.
3. User Experience: Simplifying the architecture of blockchain applications to lower the barriers for users and developers, promoting true large-scale applications.
4. Regulatory Compliance: A clear regulatory framework will help enhance the industry's credibility and promote its healthy development.
5. Cross-Chain Interoperability: Achieving interoperability between different blockchains to break down data silos and enhance the collaborative effects of the entire ecosystem.

3. What is the proportion of students from universities entering the Web3 industry? How do you view the current talent situation in the Web3 industry?

I dare not make sweeping judgments about the overall trend in global or even North American universities (it is likely an upward trend). However, based on my observations at the University of California, Santa Barbara (UCSB), the number of students choosing to enter the Web3 industry is gradually increasing. Although I do not have specific statistical data, I can clearly sense that students' interest in blockchain technology and decentralized applications is continuously rising, a trend that corresponds with the rise in Bitcoin prices.

Here are a few simple examples: UCSB's computer science department has one of the top security labs in the country, led by two legendary figures in the security field, Chris and Giovanni, whose Shellphish team consistently ranks high in major CTF competitions globally and with the U.S. military. Interestingly, when I first joined, these two professors were not optimistic about blockchain, believing it served as infrastructure for money laundering and drug trafficking, and saw no need to focus on its security issues.

At that time, I quoted an ancient Chinese saying: "Water can carry a boat; it can also capsize it." Today, over 50% of the doctoral students in these professors' labs are engaged in blockchain security research. I believe that when facing emerging phenomena and technologies, we must maintain an open and inclusive academic attitude. Technology itself is a double-edged sword, and there is no inherent good or evil.

Regarding the current talent situation in the Web3 industry, I believe this field is in a rapid development phase, with a strong demand for specialized talent. However, due to the relatively nascent nature of blockchain and Web3 technologies, there is still a scarcity of talent with deep knowledge and practical experience, leading to a supply-demand imbalance in the industry. To address this situation, we are working hard to provide relevant courses and research opportunities to meet students' needs. For example, in 2019, I offered the first blockchain course at UCSB, which had only 15 students at the time. After several years of investment in research and teaching on blockchain and Web3 technologies by the school and department, the number of students in each course has stabilized at over 100. Although this growth rate does not match the volatility of cryptocurrency prices, it is still a good start.

Overall, as mentioned earlier, the entire Web3 industry is developing rapidly, but the infrastructure and talent reserves (both in management and technical development) are still relatively weak compared to the traditional Web2 industry. This poses significant challenges for Web3 project teams. For instance, at Nubit, we prefer to recruit engineers and managers with high professional qualities but lacking blockchain backgrounds from traditional Web2 giants (such as Google, ByteDance, Alibaba, Tencent) rather than short-term trained Web3 practitioners. After all, in any industry, the fundamental principles remain unchanged.

To solve this problem, we need to continue focusing on education and training. On one hand, universities and research institutions should increase their investment in research and teaching on blockchain and Web3 technologies to cultivate more specialized talent; on the other hand, companies can help newcomers adapt to industry demands more quickly through internship programs and training plans. Overall, as the Web3 industry continues to mature, the demand for talent will continue to grow. I am confident about the future and firmly believe that through the joint efforts of all parties, the talent shortage issue will gradually be alleviated, thus promoting the healthy development of the entire industry.

4. What advice do you have for the younger generation about to enter the Web3 industry?

Based on my experiences in research and entrepreneurship over the years, I would like to offer a few suggestions for your reference:

1. Solidify Technical Foundations: While the thrill of making quick profits through trading cryptocurrencies is enticing in the short term, it is crucial for young entrepreneurs, especially those in technical development, to master the core knowledge of computer science, particularly in-depth understanding of blockchain technology, distributed systems, and cryptography. Maintain a keen awareness of the latest developments in the industry by regularly reading relevant academic papers, technical blogs, and news reports, and participating in industry conferences, seminars, and hackathons; these can help you stay abreast of cutting-edge technologies and trends. Emphasize Practice: While theory is important, practical experience is equally essential. Participating in open-source projects, developing decentralized applications (DApps), or deploying smart contracts on testnets are effective ways to enhance practical skills.
2. Strengthen Security Awareness: Security issues in the Web3 field are particularly prominent. Learning secure coding practices and understanding common vulnerabilities and preventive measures can help you avoid significant mistakes during development. As someone who has engaged in security research for over a decade and founded a Web3 auditing company, I know that most hackers are not necessarily smarter than the average person; rather, over 80% of vulnerabilities stem from practitioners' neglect of basic security mechanisms. Therefore, improving the security level of Web3 relies not only on developing more robust security tools but also on raising security awareness across the entire industry.
3. Entrepreneurship is Like Being a Person: Startups in Web3 face risks that are generally higher than in traditional fields, and many investments ultimately turn into bubbles. Therefore, as a young founder, when you receive venture capital, it is essential to remain clear-headed, as you are essentially over-drawing the trust that investors have in you. When you are in a favorable position, do not become complacent; the speed of industry changes and the multitude of risks can shift in an instant. When you are in a difficult position, do not belittle yourself. Many of the hot projects from two years ago were once as obscure as you, searching for investment. Respect your peers, partners, and every employee who works hard for you; do not sacrifice long-term visions for short-term gains.
4. Maintain a Hunger for Learning and an Innovative Spirit: Web3 technology is evolving rapidly, making it crucial to maintain a passion and ability for learning. This does not encourage blindly chasing new technologies but rather fosters a thirst for any new phenomena and technologies, which can help you respond quickly when projects encounter difficulties. What I love about Web3 is that it is a field full of opportunities that encourages innovation and entrepreneurship. No matter how unconventional the technology you hear about, you can find its application scenarios in this industry. If you have unique ideas, try to put them into practice; you may achieve unexpected results.
5. Focus on User Experience: Compared to Web2, Web3 projects still have significant gaps in user experience and stickiness. After turning off their phones or computers, people can completely avoid Web3, but leaving traditional Web2 services like Uber, WeChat, or Amazon will impact their lives. Young entrepreneurs should not overlook user experience in their pursuit of technical solutions. Successful products require not only robust technical support but also ease of use and the ability to meet user needs. Step out of the office, engage with potential customers, accelerate product iteration, and timely find the product-market fit (PMF).
6. Adhere to Ethics and Regulations: Understand and comply with relevant laws, regulations, and ethical standards to ensure that your work promotes the healthy development of the industry.

Finally, the most important thing is to maintain your passion and curiosity for this field.

5. What significant changes are likely to occur in the Web3 field in the next 5-10 years?

I believe that in the next five to ten years, the Web3 field may experience the following significant changes:

First, large-scale applications and mainstream adoption: As technology matures and user experiences improve, Web3 applications are expected to be accepted by a broader user base. Areas such as decentralized finance (DeFi) and stablecoins will transition from niche to mainstream, extending their influence to more industries. At the same time, traditional Web2 applications will gradually expand toward decentralization, blurring the lines between Web2 and Web3, ultimately leading to integration.

Second, cross-chain interoperability and chain abstraction: The interconnection between different blockchains will gradually be realized, and the development of cross-chain technology will break the isolation of various chains, allowing assets and data to flow freely across different networks and enhancing the collaborative effects of the entire ecosystem. Similar to the platform ecosystem of WeChat mini-programs, the abstraction layer of blockchain infrastructure will be further improved, enabling traditional Web2 developers to more quickly develop complex decentralized applications.

Third, the penetration of artificial intelligence and the standardization of security: Artificial intelligence will gradually penetrate the technical field of the blockchain industry, enhancing system performance, security, and diversity in application layers. At the same time, Web3 security will move from the current "scattershot" phase toward standardization, regulating the security mechanisms of various subfields, thereby enhancing user trust in Web3 applications and promoting their broader adoption.

Fourth, the establishment of regulatory and compliance frameworks: Governments and international organizations may introduce clearer regulatory policies to provide legal protection for the Web3 industry. This will help eliminate uncertainty and attract more institutional investors and traditional enterprises into the field. Looking back at the history of internet development, twenty years ago, people were hesitant to easily share their credit card information with online services; today, even the previous generation cannot live without online payment methods like WeChat Pay.

Fifth, the key role of university talent and entrepreneurial teams: Just as Harvard nurtured Facebook, Stanford nurtured Google, and Berkeley incubated OpenAI, North American universities have played an important role in the Web2 field. Looking ahead, university talent and entrepreneurial teams in the blockchain field will also play a crucial role in the transformation of Web3. Reflecting on the development history of blockchain over the past decade, I categorize it into three stages:

• From the birth of Bitcoin in 2009 to 2021: This stage was the "wild west" era for blockchain entrepreneurial teams, where both those looking to exploit and those genuinely working on projects were racing against time to establish themselves, while the infrastructure was relatively weak. When I began researching smart contract security in 2017, I had a conversation with the Solidity development lead about design issues with the language and suggested they introduce an intermediate representation (IR) layer during compilation to optimize the generated EVM bytecode. His response was, "That's a genius idea! We will do that in the next version" (which is today's YUL). This made me realize how significant the oversight in foundational design was.
• From the DeFi Summer in 2021 to 2023: This stage was a time of flourishing innovation, with various innovations emerging. Meanwhile, professors and research teams from North American universities gradually entered the field. Most of my peers in programming languages and formal verification have founded their own blockchain companies.
• From 2023 to the present: The industry is gradually stabilizing, and among the blockchain startups emerging in North America, founders or advisors without university backgrounds are hardly attracting the attention of investors.

Although entrepreneurial teams with university backgrounds may sometimes face issues such as insufficient market adaptability and execution capabilities, just as integrity is the foundation of Western countries, these teams often provide the two most scarce elements for the Web3 field: bottom line and innovation. The bottom line is easy to understand; such teams are subject to strict oversight from schools and governments, and any violations may face severe repercussions; innovation is a strong suit of North American universities. This is not because professors and students are inherently superior, but because the university environment is relatively pure, free from complex leadership relationships or external interference, allowing for a focus on research and innovation, creating an atmosphere of working tirelessly and fearlessly.

In summary, university talent and entrepreneurial teams will play the roles of innovation engines and practical promoters in the future transformation of Web3. Their research and practice will help overcome current technological and application barriers, accelerate the popularization and maturation of Web3, and drive the entire industry toward a more open, decentralized, and trustworthy future.

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This article is for reference only. The views expressed in this article are solely those of the author and do not represent the position of OKX. This article does not intend to provide (i) investment advice or recommendations; (ii) offers or solicitations to buy, sell, or hold digital assets; (iii) financial, accounting, legal, or tax advice. We do not guarantee the accuracy, completeness, or usefulness of such information. Holding digital assets (including stablecoins and NFTs) involves high risks and may fluctuate significantly. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. Please consult your legal/tax/investment professionals regarding your specific circumstances. You are solely responsible for understanding and complying with applicable local laws and regulations.