In the final stage of crypto VC, what has YZi invested in?
There was originally no encrypted VC in the world; as the investment increased, risks emerged.Author: Zuo Ye, Crooked Neck Mountain
VC has indeed died, with Web2 venture capital unwilling to take risks, only following government industrial guidance funds for co-investment. Web3 Seed rounds are praised but not well-received, and VC and FA are further merging, with a consensus forming around entrepreneurship aimed at Binance. All insights and memos have turned into info to exchange for Yap.
From an overall perspective, more and more large VCs are starting to enter projects at the token issuance stage, pouring secondary funds into primary dreams. This is different from early equity investments, initial token offerings (IXO), and dual stock/token models. The market is rapidly maturing, but it requires further sacrifices from small VCs.
After CZ's return, with an investment-oriented approach, education as a slogan, and tweeting as the essence, he is all in on BNB Chain Meme as the main business. Binance Labs was renamed YZi Labs on January 23, increasingly resembling a Family Office.
The rejection of risk and preference for investment stability is not just about investing in later stages or mature projects, but also stems from the increasingly dull exploratory nature of projects. Taking YZi Labs as an example, we can observe the investment style of turning new money into old money, allowing everyone to learn in advance about changing styles after making a fortune.
Data Source: Decentralised Co., Illustration: @zuoyeweb3
Under normal circumstances, there should be a large number of seed rounds, with subsequent rounds having larger amounts.
However, looking at the data from the past six months, the number of seed rounds compared to A/B/C rounds is not only not overwhelming, but the amounts on both sides are also very close. The disappearance of crypto rounds has become a reality; those who can secure small amounts will continue to do so, while those who cannot will remain unable to secure funds.
Investing in AI During Its Cool Phase, Speculating on Meme Season
Whether in Web2 or Web3, AI is currently somewhat cool, but CZ feels it’s not enough and hopes it can cool down further before taking action, leaving only the true builders and the most devoted followers.
Image Description: YZi investment targets, Image Source: CryptoRank
However, YZi's direction does indeed involve AI. In fact, most projects can relate to AI, thus they can be categorized as "using Crypto for AI," such as Vana and Tensorplex Labs, and "using AI for Crypto," such as Plume Network, Blum, and Opinion Labs.
Of course, this is just a forced classification and holds no guiding significance. In the era of AI-enhanced postpartum care for sows, there’s no need to get tangled up in how necessary AI really is.
Let’s review the characteristics of each project in chronological order.
- Opinion Labs = Kaito + Polymarket
Opinion Labs is a so-called human opinion-driven prediction market. I boldly speculate that its future direction will be based on predictions and trades from Twitter KOLs, leveraging the InfoFi concept above and the enduring trading attributes below, allowing for both offensive and defensive strategies.
- Plume Network = Everything Can Be RWA
RWA is not a new concept, but Plume Network has a very legendary journey, having secured $30 million in financing from top institutions like Galaxy, and surprisingly choosing Gate for its IEO this January, before receiving investment from YZi, which caused its token price to surge.
Calm and flexible is the style cultivated in the crypto space, seizing the opportunity of the era by issuing tokens early and securing subsequent financing.
- Tensorplex Labs = LSD + AI
Firstly, I believe decentralized AI is a pseudo-concept. Tensorplex Labs aims to ensure the decentralization of LLM training and datasets using LSDfi, which has no productive significance. However, in the crypto space's eagerness to do something for AI, it’s not uncommon to secure funds from within the industry.
This is meaningful for future token prices; after all, a product is a product, and a token price is a token price. Otherwise, ADA and XRP would be deeply ashamed.
- Vana = AI Concept Coin Across Cycles
Securing Polychain in 2021, Paradigm in 2022, Coinbase in 2024, and YZi Labs in 2025, Vana has successfully landed on Binance Launchpool.
A very typical VC coin from the last cycle, it holds no reference significance for current and future projects, only evoking envy.
- Blum = The Only Seed Player + Trading
This is the most typical investment style of Binance Labs, a trading-oriented DeFi product, and a rare seed round player. What’s particularly surprising is that OKX and YZi jointly invested, akin to brothers weathering storms together, united in their overseas ventures.
Please forgive me for not providing much detail on project mechanisms or token economics, as it holds little significance. What is the fundamental basis of a meme, what distinguishes a community from a trading group, and what role does token economics play? I refer to these as the three unsolved mysteries of the crypto space.
Embracing Family Office Aesthetics, Stability Over Everything
YZi is quite typical, and the domestic audience is relatively familiar with it. However, after the wealth creation wave from 2017 to 2021, Crypto New Money has gradually transformed into family offices, which are old-fashioned funding institutions that do not seek extremely high returns but care more about project stability.
Two years before CZ, Arthur Hayes, the founder of the original contract king BitMEX, established his family office Maelstrom, funded by Arthur personally. Similar to CZ recalling Ella Zhang, Maelstrom's daily operations are managed by former BitMEX executive Akshat Vaidya.
It has been proven that Arthur Hayes can develop perpetual contract products more suitable for the crypto space's unique characteristics, and his investment aesthetics are also distinctive. For example, the stablecoin Ethena in the post-UST era officially initiated the first step towards a fee structure for on-chain product arbitrage trading platforms, as well as the cross-era DeFi product Pendle.
A complete story about Arthur Hayes will be presented in a subsequent extensive piece; he is an OG worth learning from more than Sun and CZ.
However, similar to YZi, Maelstrom also pursues stability, such as not investing in memes but rather in meme-related tools and infrastructure, like Time.Fun, emphasizing success not based on ROI but on maintaining a stable style.
Yet, YZi's style is far from fixed. In the past achievements of Binance Labs, securing a spot on Binance's main site is an attractive barrier, but now the landlord's family has no surplus grain. By the end of 2024, they have begun to shift the tokens of invested projects to Gate, ultimately placing all burdens on Gate.
Unlike Arthur Hayes, who can act as a spokesperson for Ethena, CZ has not yet deeply bound himself to any project, and YZi has not formed its own investment aesthetic. As mentioned earlier, Binance Labs is very fond of investing in trading-related products, but in the post-DeFi profit era, Ethena and Pendle will only be a minority, with most being crypto + AI token-selling projects. The scraps of Web2 AI and the small pride of Web3 AI.
As YZi increasingly detaches from the Binance ecosystem, its true strength still needs to be tested by the market, which especially tests CZ's personal investment level. From its AI still cooling down phase and the post-$TRUMP development of the BNB Chain Meme ecosystem, I personally feel it is less exquisite than guiding Ben Zhou to refuse user withdrawals and precisely seize market share from OKX DEX.
However, this may also be related to CZ's genuine focus on trading platforms rather than trading itself.
Conclusion
The world of yesterday is gone forever.
Crypto venture capital truly set sail from the IXO era, reaching its peak before the collapse of FTX (I always have to mention SBF, who truly changed the industry trend single-handedly), and now it’s merely completing the finishing processes of established investment projects, enduring the scorn of retail investors, and striving to issue all tokens.
There was originally no crypto VC; as investments increased, so did the risks.
