1) What is your background? What brought you to the crypto space?
I got into Bitcoin in early 2013 after reading the white paper and then buying some on Localbitcoins, which was a lot sketchier than the way most people get started these days, via Coinbase or GDAX. I became increasingly interested in the potential of digital assets to bring a return to the privacy that humans have enjoyed since the invention of shell money a few millenia ago up until the arrival of centralized digital payments like Paypal, and also in their ability to align incentives across distributed networks. I co-founded a cryptocurrency startup called Stream with Ben Yu in early 2017 with the aim to provide a direct micropayments system for livestreaming broadcasters, and then was recruited by the founding partner of INB Li Xiaolai to join INB as a partner towards the end of 2017. I was excited to do so because INB is the largest crypto fund in China, and the other partners are like me — true believers in the power of cryptographically secured assets to create a more equitable, private, and interesting world.
2) What is your fund strategy?
I run two funds for INB, a fairly standard crypto-focused hedge fund that is a mix of long term holds, actively traded positions, and early investments into promising startups, and a separate “early only” fund that does exclusively early stage investments into the most interesting startups in the space. I’m particularly excited about early-stage investing because INB (as China’s largest crypto fund, and the managers of a network of exchanges) can provide a lot of support to good projects at the early stage.
3) What do you benchmark against? How have you performed relative to this benchmark?
This is a tough question because we have a lot of different benchmarks. There’s the benchmark that the fund uses to calculate returns, which like almost every other fund in the world is calculated against the dollar. Then there’s my own internal benchmark, which to be honest is usually Bitcoin. I want to beat Bitcoin over the period of my fund, which historically INB has been able to do through some careful early investments in stuff like Zcash, Sia, and EOS.
4) How do you analyze new investment opportunities? What is your fund process?
Most of my day is spent reading white papers, mailing lists, and Signal group chats. That’s exactly how I like it. I don’t go to many conferences, except Scaling Bitcoin, BPASE, and this year I’m looking forward to the MIT Bitcoin expo. I also have a small network of friends who are also running funds and we tend to share interesting deals. The niche I’m most interested in and understand the best is privacy preserving tech, so I spend a lot of time looking at projects in that space. Once we’ve found something that we think is a real winner, we’ve traditionally done our best to eat up as much of the round as possible, or in the case of assets already traded on the market, use large OTC orders to quickly build up a big position without moving the market too much.
5) What projects are you excited about?
I’m really excited Mobilecoin, a privacy preserving cryptocurrency project being worked on by Moxie Marlinspike, the founder of Signal Messenger. It’s got an interesting mechanism that allows for a user experience much closer to that of Paypal or Venmo, but without giving up the autonomy of cryptocurrency. I’m also very into 0x-based relayers, especially DDEX, a portfolio company of ours that recently became the highest volume relayer in the world. I think we’re only seeing the beginning of the decentralized exchange boom and I’m excited to fund more projects working on that. I remain a huge fan of Zcash, which I think has the strongest approach to privacy of any coin, and which is getting a lot of exciting upgrades to its performance and ability to be used on mobile devices in 2018.
6) What are some of the technological trends you are watching in 2018?
STARKs, dedicated hardware including ASICs and secure enclaves, and hybrid proof-of-stake/proof of work consensus layers.
7) What are your projections for the market in 2018?
I’m really skeptical of anyone making long term predictions. I will say that the massive influx of talented people from the tech and traditional finance industries is pretty much the single most bullish signal for the future of blockchain assets that I can imagine.
8) Why did you want to be apart of Apex Token Fund?
I’m interested in the regulation-compliant tokenization of assets, and the Apex team seems to be doing a really good job on that front. With new systems like Harbor, and other compliance tools that allow issuers to control the circulation of securities tokens, I think we’ll see a blossoming of this kind of approach.