Hexun Dialogue with Eight-Dimensional Capital: USD Stablecoin Strengthens the Status of USD under the Framework System of USD
As a cross-border and professional blockchain industry investment institution, 8D Capital has deployed many high-quality blockchain early stage enterprises with high return on investment with its sensitive business sense and professional investment and research capabilities, and has become the blockchain industry leader. In the list of Token Metrics in the United States, Bawei's investment return ranks among the top three among 50 international funds. It also has a wide reputation in China. Top 10 blockchain investment institutions, recently, Eight Dimensional Capital won the most popular investment institution for entrepreneurs in EBTC·2018.
Wonderful point of view:
Wonderful point of view:
1. The blockchain is not only limited to technology and tools, but also a technical trend of thought and logical application, which is essentially a system innovation.
2. There is an impossible triangle in the blockchain. It is a choice of certain functions and a technical re-match, and it is not a panacea.
3. The U.S. dollar stablecoin is essentially an offshore U.S. dollar, and the U.S. dollar stablecoin strengthens the status of the U.S. dollar under the framework system of the U.S. dollar.
4. STO (Security Token Offering) is a global capital market seeking common ground while reserving differences, and its connotation and extension are broader than IPO (Initial public offering).
5. In the next round of bull market, projects with high return on investment need to seek opportunities around the world under the premise of compliance, and do global capital and asset matching.
The following is the original text of the conversation:
First question:
Zhang Chao: As the investment and research institution of 8D Capital, can you introduce 8D Research Institute? What are the current directions of work?
Wei Ran: The functions of 8D Research Institute are mainly divided into internal support and external output. Internally, it mainly serves for investment. The research institute will conduct macroscopic, multi-dimensional and in-depth research on the blockchain industry, describe the industrial development trajectory and future blueprint, and combine the key nodes in the industrial chain to sort out the targets on the subdivided track. To support investment decision-making; externally, industry insight and high-quality content will be exported. The research institute has teams in China and the United States. We hope to capture the latest developments, translate and disseminate the latest foreign technology and regulatory dynamics to China, and promote domestic industry development. The situation is exported to foreign countries and becomes a bridge to bridge the information gap.
At present, we are also cooperating with law firms, listed companies, startups, etc., and plan to jointly publish a book on the blockchain industry, investment, and regulations, which is expected to be published next year for all readers.
Second question:
Zhang Chao: Is the underlying technology of the blockchain relatively complete at this stage, and what stage is it at? Can you talk about your views on mainstream public chains?
Wei Ran: Blockchain is not just a single technology and tool, it is integrated and comprehensive. Because its essence is to use multiple tools to achieve institutional innovation and build a "trust" mechanism that is not based on a single trusted party. If you look at the development stage of the mechanism, it is still in its infancy. At this month's Blockchain Mathematical Science Conference, Mr. Zhu Jiaming also proposed that the bottom layer of the blockchain is mathematics, which combines computer science, cryptography, data science, artificial intelligence, etc., and integrates economics in the mechanism design. , game theory and other theories, trying to use mathematical methods to express and solve credit problems.
From the perspective of computer technology, Dr. Wang Jiaping pointed out that in 1936, Alan Turing proposed the abstract computing model of Turing machine. In 1945, von Neumann gave the engineering The von Neumann architecture can be realized. Until now, the entire computing system is given under a fully centralized setting. From CPU to GPU, from Intel to ARM, all follow this architecture. Computers, mainframes, Cloud services are controlled by a trusted single party. The setting of the blockchain is that the entire computing system is not controlled by any party, and it can be separated from specific physical devices, and it can prove its innocence without a single trusted party.
From the perspective of the underlying technology, of course there is still a lot of room for development, but whether the technology is "perfect" depends on what we want to achieve. For example, the purpose is to improve the "efficiency" of the value transfer system (such as Bitcoin, Paypal, Visa, Ripple). It is necessary to look at several indicators comprehensively. The emphasis on TPS (transaction volume per second) is one-sided. TPS must be considered. Dimensions such as size and clearing ability.
Moreover, the reason for choosing the blockchain is that some centralized institutions need to use the blockchain because they are not applicable in certain situations due to lack of legitimacy and credibility, system complexity, uncertainty, human-machine communication and other reasons. It is a choice of functions and a rearrangement of technologies, not a panacea. There is also an impossible triangle in the blockchain - decentralization, security, and efficiency. In many cases, it is emphasized that "efficiency" should be taken into account on the premise of "decentralization" and "security". If you only pursue high efficiency and high throughput, it may be better to use the current centralized trust mechanism, such as Alibaba's architecture.
My view on the public chain is this, the trend is cross-chain and interoperability. At present, there are many public chain projects on the market, but after fierce market competition, there may be only one-digit public chains left from thousands of public chains.
The third question:
Zhang Chao: Is Bitter Winter still investing in projects? If you invest in a project, which direction will you focus on? Public chain technology, protocol, application, stable currency, exchange, wallet?
Wei Ran: Bawei is still investing in projects. Recently, it mainly invests in equity, which is biased towards projects that combine finance and technology under the compliance framework, such as issuance and trading platforms on the ST industry chain, cross-border transfer tools, stable coins, etc. .
In addition to financial infrastructure + blockchain, the track selection also focuses on real industries + blockchain, such as traditional real estate usufruct, copyright, artwork, medical and blockchain projects, and at the same time provides some personalized services for traditional enterprises. Consulting and program design, using blockchain to empower traditional enterprises.
Fourth question:
Zhang Chao: Some people say that valuation has a systematic calculation model, and some people say that valuation is an art, so how does Bawei evaluate blockchain projects? Are there specific standards?
Wei Ran: Valuation includes two parts: "telling" and "showing". What can be "telling" is what can be quantified and calculated, such as assets, cash, and foreseeable future cash flows; the "showing" part is is the art, it is the gap between the future price (ask price) and the existing valuation (buy price). This "display" part is the comprehensive result of the game of many subjects in the capital market, plus the general environment and luck. Bawei will do due diligence on the quantitative part, and the "art" part must combine the bull and bear market, market psychology, judgment on the future, etc., to give a valuation range.
Fifth question:
Zhang Chao: How do you view the two projects of EOS and Ethereum? Is there any one that will become the No.1 of the next generation distributed underlying public chain?
Wei Ran: Ethereum itself is a technical community, and the founder Vitalik is not like a businessman, but more like a geek. However, because Ethereum’s smart contracts can support the issuance of Tokens, ETH has become a fundraising and investment target. At present, almost all Tokens issued by projects in the market are based on the ERC20 protocol, so Ethereum’s financial attributes are very strong; EOS’s DPOS The consensus algorithm makes it have its own promotional attributes, and the global audition system makes it highly involved and topical. For example, there is a capital community such as the EOS Wenzhou node.
The technology itself is developing very fast, and it will take time to test whether it can be mature and stable and widely accepted by the industry, but at least the two of them have the first-mover advantage.
Sixth question:
Zhang Chao: How do you view digital stablecoins? Are there better suggestions for policy makers?
Wei Ran: The reason why there is a stable currency is that currency has three functions: means of payment, unit of account, and means of storage. The former two require a relatively stable currency value. Most of the "stable coins" on the market today refer to coins that are equivalent to certain legal tenders, and the most mainstream is the US dollar stable coin.
Stablecoins and digital fiat currencies are completely different levels. The digital fiat currency is the level at which the central bank distributes it to commercial banks, while the US dollar stablecoin is essentially an offshore dollar, the level behind the deposit, roughly the same level as Yu'e Bao. The US dollar stable currency continues to strengthen the status of the US dollar under the framework of the US dollar. In an encrypted world where the rules of the game have not yet been determined, the US dollar stable currency has once again become a unified mainstream pricing tool in the global encrypted world.
China currently has no relevant laws and policies that allow the issuance of RMB stable currency. Whether it is the government or enterprises, it is a different path from the United States in this regard. Participants in the market economy will definitely pursue a free market, free trade and the free flow of capital and talents across borders, but now we are facing the trend of anti-globalization as a whole, and trade protectionism and capital controls have the upper hand.
For policy and compliance, my suggestion is to have a deep understanding of the history of the Internet and blockchain, and the logical context that drives its development. Otherwise, we will not only be unable to monitor the market risks it may bring, but also miss all historical opportunities and be at a disadvantage in international competition.
Innovation and regulation should coexist. As Ren Zhengfei said, "The goal of financial compliance is to produce more food, not to affect or hinder food production." Business units work together in the trenches to solve problems.” Supervision should be for the better development of the industry, to achieve a smooth transition of innovation, to maintain market order without inhibiting the development of productivity.
Seventh question:
Zhang Chao: How do you view STO, will it replace IPO in the future?
Wei Ran: STO is a global capital market seeking common ground while reserving differences. At present, the definition and boundaries of STO are not clear, and even the industry is still trying to define this concept with practice. To be precise, countries are not defining whether this concept is compliant, but expressing their attitude towards this kind of "exploration", but this reflects its global characteristics.
Bawei firmly believes that the combination of financial technology and regulatory technology is the general trend of the future, and promoting the establishment of a global and interoperable capital market is our goal. Security Token Offering is a carrier and means, and it is the product of the development of FinTech+RegTech at this stage.
The connotation and extension of STO are larger than that of IPO (Initial Public Offering). It is necessary to abstract financial behavior, rules and laws into symbols and codes through blockchain technology, and turn it into a technical layer. The connotation of security (securities) is more diverse than that of stock (stock). For example, the market for bonds and fixed-income products is larger than the stock market and private equity market. The extension of offering is also broader than public offering (public offering). In addition to public offering, there are also private placement (private placement), crowd funding (crowd funding) and so on.
Eighth question:
Zhang Chao: At present, the best return on investment in the last round of bull market is public chains and exchanges. Then which direction or what kind of project do you predict will get the best return on investment in the next round of bull market?
Wei Ran: Yes, the public chain and the exchange are the checkpoints in the technical infrastructure and financial infrastructure respectively. Bawei has invested in Ontology, Fantom, Zilliqa and other public chains, and exchanges have also deployed Coinsuper, Bibox, Fcoin, Bgogo, etc. The exchanges invested by Bawei have their own characteristics. For example, Coinsuper in Hong Kong focuses on compliance and fiat currency channels, and already supports Hong Kong dollar and US dollar deposits. When the bull market comes, the exchange will be the most direct beneficiary. It is directly oriented to investors and has many functions, covering brokerage business, investment banking business, sponsorship business, asset management business, etc. of traditional securities companies. The role of the currency is like the sponsor representative of the IPO of the investment bank, which shows that the exchange is at the upper reaches of the industry food chain. The exchange is also a strategic layout for investment institutions and a part of post-investment services.
In the next round of bull market, projects with high return on investment need to move closer to financial technology. Under the premise of compliance, seek opportunities around the world and match the global capital and asset sides.
Such projects should: 1. Solve the real pain points of the industry. No matter the method is through unique technology or business model innovation, it will win in the long run from the perspective of value investment. 2. Open up the asset side and the capital side. The asset side refers to the entry of assets or rights in traditional industries (with assets, cash flow, and profitability), and the capital side refers to the entry of mainstream institutional investors and traditional financial funds.
