MetaEra Hong Kong Zone is now online, and MetaEra has launched a series of "High-End Dialogue" interviews. We will continue to engage with industry elites and leaders to explore the development and future of Web3 together. This issue's interviewee is Du Jun, co-founder of ABCDE.

Introduction

Du Jun is the co-founder of ABCDE Capital and Huobi Group (now acquired by Sun Yuchen), as well as the Executive Director and CEO of New Fire Technology. He was the product manager for the well-known community platform Discuz!X launched by Comsenz, and has excelled in investment, marketing, operations, and creativity. Du Jun is also one of the earliest professional investors in the blockchain industry, with rich entrepreneurial experience and industry resources.

Key Insights

● Make more friends and do things that align with the times together with them.

● Blockchain actually needs a killer application, and I have now found a relatively good answer, which is stablecoins.

● Currently, many blockchain projects aim to list on exchanges, and this listing is the endpoint for many projects, which is completely inconsistent with traditional business logic.

● It is not Bitcoin that needs Trump, but Trump that needs Bitcoin.

● For the past decade, I have been doing one thing: telling others what Bitcoin is and encouraging them to allocate and purchase Bitcoin.

● The vision of New Fire is to allow every enterprise to use digital assets relatively safely without worrying about the risk of theft every day.

Full Interview

MetaEra: Looking back at your entrepreneurial journey, some articles label your story as "From Grassroots to Crypto Tycoon." It shows that you have undergone multiple transformations in identity. How did you accurately seize opportunities suitable for you in the topic of "entrepreneurship"?

Du Jun: There are many versions of my early experiences online, but I think the core points are doing things that align with the times and making more friends. Many times, I was pushed along rather than racking my brain to think of something. I would observe what changes were happening in the industry and what my friends were doing.

My first job was at a software company called Comsenz, which was sold to Tencent in 2009, and I worked at Tencent for three years. Around 2010, I met Li Lin and some friends. Later, in 2013, we founded Huobi, which felt like a natural progression at the time. This also applies to founding ABCDE Capital in 2022; these felt like things I could easily do. So basically, it’s about aligning with the times, observing changes, and receiving help from many friends.

In summary, it’s about making more friends and doing things that align with the times together.

MetaEra: In the crypto space, you are also regarded as an early legendary figure in blockchain entrepreneurship. When you first encountered digital currency, how did you view this emerging phenomenon? After about 10 years, has your understanding changed?

Du Jun: Around 2012, I first heard the story of Bitcoin in a QQ group focused on alternative investments, which had about 100 people, but ultimately only 5 to 10 people bought Bitcoin. I entrusted a Japanese friend to buy Bitcoin for me on Mt.Gox. In March 2013, Bitcoin surged to about $200-300. During the rise of Bitcoin, I was pondering why it was increasing in value. If Bitcoin were unremarkable, I wouldn’t have researched it. But through the price changes, I developed respect for Bitcoin and began studying it. I sought out articles about Bitcoin and later read the Bitcoin white paper, which made me feel very happy.

At that time, the QQ group was focused on alternative investments, including domain names, wine bottles, paintings, etc., emphasizing scarcity. The first version we heard about Bitcoin was that it would never exceed 21 million, which was enough to demonstrate its scarcity. I thought there were more than 21 million domain names, and they were only a few hundred RMB each at the time, so my first impression was that this thing was great.

After studying Bitcoin's scarcity, I gradually learned about its technical aspects, such as whether Bitcoin could achieve double spending and withstand Byzantine attacks, which I found quite interesting. In April 2013, one day Li Lin invited me to dinner at a restaurant in Shangdi. He asked if I knew about Bitcoin, and I said I did, advising him not to buy it because of its volatile price. At that time, I viewed Li Lin as an entrepreneur, so I didn’t recommend he buy Bitcoin.

However, Li Lin mentioned whether we should create a trading platform, suggesting we wouldn’t profit from Bitcoin itself but from transaction fees. I found that interesting and researched Mt.Gox and Bitcoin China, where Bitcoin China’s daily transaction fees could reach millions of RMB. We thought that starting a trading platform was a great entrepreneurial direction, so we quickly initiated the startup of Huobi, which involved buying a domain name, hiring employees, determining a name, designing a logo, etc.

During this process, our biggest challenge was how to communicate Bitcoin to the market. At that time, Bitcoin didn’t have a strong wealth effect and wasn’t as crazy as it is today. As CMO, I needed to acquire users and teach them to register on Huobi and trade Bitcoin. Our main promotional method was to hold offline seminars, sharing Bitcoin's core value of scarcity and immutability, which worked quite well. So, within two to three months of Huobi's founding, we achieved positive profitability.

In fact, for the past decade, I have been doing one thing: telling others what Bitcoin is and encouraging them to allocate and purchase Bitcoin. In communicating with others, I faced some setbacks and pressures. For example, many people would ask: What value does your industry bring to society? In what aspects of life will blockchain be used? This has been particularly painful and anxiety-inducing for me in the past two to three years because I also need to think about what else Bitcoin can do besides being traded on exchanges. If there isn’t a good answer or solution, this industry will still face such questions in ten years, and mainstream society and media will continue to hold biases and misunderstandings about Bitcoin and blockchain.

Today, it’s easy to explain what the internet is, what mobile internet is, and what AI is. However, before OPEN AI emerged, AI was also misunderstood; people wondered what it could do after burning so much money. The early internet was similar; people thought it was useless except for sending emails. For example, mobile internet has made it more convenient to hail taxis and order takeout. From today’s perspective, these things have conveniently solved problems encountered in everyday life. However, blockchain has yet to solve this problem; it actually needs a killer application, and I have now found a relatively good answer, which is stablecoins. Stablecoins represented by USDT issued by Tether have addressed some payment issues, and I believe the usage data of stablecoins will surpass that of traditional financial payment companies like VISA.

So, in these ten years, stablecoins have emerged, but I don’t think there have been any significant changes.

MetaEra: At the same time, ABCDE Capital is your current focus. Can you disclose the current development status and investment landscape of ABCDE Capital? Given the current weakness in primary market investments, what is your view on this issue?

Du Jun: Currently, many blockchain projects aim to list on exchanges, and after listing, many projects reach their endpoint, which is completely inconsistent with traditional business logic. Your business model should be to provide value to users, not just to sell tokens after listing. I think that in itself is problematic.

One point we have been anxious about in recent years is how to find projects with real commercial value. You will find that although many companies are doing things in the blockchain industry, they actually do not need to issue tokens. What is the necessity of issuing tokens? For example, Bitcoin has an incentive role on-chain, and Ethereum cannot operate without tokens; that’s the necessity of issuing tokens. However, many projects today do not have the necessity to issue tokens; their tokens are not linked to their applications and are purely marketing strategies or monetization methods for entrepreneurial teams.

This is one of the points ABCDE has observed: how to judge these projects. ABCDE will soon announce the completion of a new round of fundraising and will continue to invest. We aim to invest in 15 projects each year and have cumulatively invested in 30-40 projects, with a minimum investment of $1 million, generally ranging from $1 million to $5 million.

Currently, ABCDE is mainly focused on several directions, including AI and trading, as well as consumer-oriented application products. We believe there is still significant room for improvement in trading products, and overall, we will focus on foundational development.

MetaEra: Besides Web3, AI has also been developing rapidly in the past two years. Many projects have been labeled with both Web3 and AI elements, but they are in a situation of "loud voices, little action." How do you think Web3 and AI can better integrate?

Du Jun: What is AI, and what is Crypto? I think there are some different views today, and secondly, what is the necessity of their integration? The biggest problem currently is that many companies have added AI features to Crypto, but there is no real need for integration, and integrating them does not necessarily make them better.

Currently, we are noticing new opportunities arising from the combination of AI and Crypto, such as Meta's Llama 3.2 model, which allows you to run it on any mobile device. Therefore, on any Crypto node device, it can also use this model for local inference, which I find quite interesting. Recently, our team has also been researching running Ethereum nodes on small mobile devices, and we plan to open-source this product for community use soon.

For example, Stanford University professor Fei-Fei Li founded a spatial intelligence startup called World Labs, which announced it had completed a massive $230 million financing. The most scarce resource in the AI field is datasets. If we can accelerate the collection and organization of spatial data or 3D data construction through Crypto mechanisms, I think there are still great opportunities. We are relatively optimistic about the industrial forms generated by AI and Crypto.

MetaEra: As the Executive Director and CEO of New Fire Technology, which is a publicly listed company in Hong Kong, how is New Fire Technology embracing this wave of Web3 in Hong Kong? How do you view the entrepreneurial environment for Web3 projects in Hong Kong?

In August, it was announced online that New Fire Technology acquired the Japanese licensed exchange BitTrade. Could you share the reasons for the acquisition and what further plans you have post-acquisition?

Du Jun: First of all, as a company listed on the Hong Kong main board, compliance is our hallmark. From a business perspective, we have obtained licenses for categories 1, 4, and 9, allowing us to provide compliant asset management services. Our New Fire Asset Management has launched about a dozen funds, with an asset management scale of approximately $90 million. We have deep cooperation with Huaxia Fund, Harvest Fund, and Bosera Fund on Ethereum ETF products. As Crypto funds continue to grow, our products will become increasingly leading, which is also a key development direction for the company in the next two to three years.

Secondly, we have our own MPC self-custody platform, SINOHOPE, which uses MPC-CMP technology to support users in distributed management of private key shards and collaborative signing, effectively addressing single-point risks and increasing transparency and usability.

We believe that as regulation deepens and the industry develops, crypto exchanges will gradually be split into more compliant and segmented parts. Today's crypto exchanges will slowly be divided into trading platforms, brokerages, custodians, banks, insurance companies, and issuers, rather than being a single exchange that combines all roles, which does not meet traditional regulatory requirements or users' demands for transparency and security. The vision of New Fire is to allow every enterprise to use digital assets relatively safely without worrying about the risk of theft every day.

Thirdly, New Fire Technology recently announced its intention to acquire the Japanese licensed exchange BitTrade. BitTrade is a cryptocurrency exchange registered in Japan in 2016, primarily engaged in cryptocurrency trading. Additionally, BitTrade holds licenses from the FSA (Financial Services Agency) and has two compliance licenses for cryptocurrency trading issued by the Japanese Financial Services Agency: "Cryptocurrency Trading Business Kanto Finance Bureau No. 00007" and "Type 1 Financial Instruments Business Kanto Finance Bureau No. 3295." Furthermore, BitTrade has joined three self-regulatory associations officially recognized by the Japanese Financial Services Agency, which have the ability to formulate and enforce trading rules and standards for cryptocurrency in Japan and facilitate the introduction and development of Japan's security token system.

Currently, our listed company has issued an announcement regarding the proposed acquisition, which is still in progress, and we expect to complete the entire acquisition process in the near future. We plan to expand our compliant trading business in Japan and other regions next year, and New Fire Technology aims to use this acquisition to enhance the company's asset management services.

Now, we have three core products and services: exchanges, custody, and asset management, which can synergize our business and enhance our core competitiveness in the Asia-Pacific region.

MetaEra: You currently spend most of your time in Singapore. If you compare horizontally, how do you view the regulatory attitudes and policies towards Web3 in different regions globally? Will you increase your layout in Hong Kong?

Du Jun: Hong Kong has always been a key area for us. Looking globally, there are several locations that are very important. In the United States, whether in terms of technological accumulation or capital volume, it is undoubtedly at the top globally. Previously, we only needed to focus on the West Coast and set up a point in Silicon Valley, but today we find that many clients' transactions and investments are in New York, so we are currently recruiting partners in New York. Therefore, our business is divided into two locations in the U.S.: in Silicon Valley, we focus on new technologies and ideas, while in New York, we focus on trading and investment.

Additionally, Singapore, Hong Kong, and Dubai are three cities that can radiate the Chinese crypto circle and the Asian crypto circle, and we are focusing on these areas. We also have a team of about 50 people in Tokyo. Our business in these places has some differences; in Singapore, it leans towards business and operations; in Hong Kong, it focuses on the middle and back office, with colleagues in legal, finance, and asset management; in the Middle East, we have just started, mainly focusing on business sales; and in Tokyo, it operates as an independent system with a well-established team.

MetaEra: Let’s discuss an impromptu topic. With Trump’s election as U.S. president, the crypto space generally holds confidence and high expectations for the digital currency market and Web3 development. For someone like you who has experienced two or three bull and bear markets, can "this wind" really influence the trajectory of the Web3 industry?

Du Jun: From an entrepreneur's perspective, I pay attention to policies because, after all, you need to start a business in a physical space, so you need to understand what changes and impacts policies will have on you. Your entrepreneurial direction should align with the different focuses and concerns of each government.

Therefore, you should do things that align with policies and operate within the boundaries. You need to know where the legal bottom line is, and you can do some challenging things within the boundary, but never cross the legal bottom line. I think there’s no need to put yourself in a difficult position.

From the perspective of a holder, I think it should be the opposite; there’s no need to emphasize the value of a decentralized product every day. A decentralized, peer-to-peer blockchain protocol should not have its value tied to a centralized entity; I think that in itself is a reversal. So I shared a quote on Twitter: "It is not Bitcoin that needs Trump, but Trump that needs Bitcoin."