Dialogue with Suji Yan: Rebelling against giants and becoming giants

If rapid growth and rapid death are the eternal characteristics of the Internet, then in the Web3 world, the cycle of life and death has been compressed to the extreme: a Web3 project may only take half a year or even less from life to death. This forced the founders of Web3 to become home run players sooner – such as building CVC earlier.

Mask Network was established in 2017, focusing on the bridge from Web2 social to Web3. The initial product form is to allow users to publish encrypted tweets on traditional social networking sites such as Twitter and Facebook to protect their own information from being acquired by the platform. Features such as payment tips, file storage and sharing. This social-based infinite extension property allows Mask Network to continuously accommodate more content and expand a richer ecosystem, until it has become one of the most experienced players in the Web3 social field.

In the past two Web3 cycles, Mask Network was the survivor of the big wave. Recently, Mask Network completed the first round of the fund and launched the new brand name Bonfire Union. In the traditional world, the figure of 42 million US dollars is not big, but for Mask Network, it means that they can not only leverage the Web3 social structure from the perspective of products and network protocols, but also have the ability to incubate and cultivate in line with the spirit of encryption and The ability of open source spirit, creative and visionary project parties to gain greater influence in the Web3 landscape.

In the interview, Suji Yan described the establishment of the fund as follows: “GPs and LPs saw these early incubations and investments, and said it would be better to do a Fund.” A considerable part of Mask Network’s investors became LPs of Bonfire Union, and other investors invested People also include former or current executives/partners from various fields, including well-known Web3 project parties, top US dollar venture capital funds, leading financial companies and leading Internet companies. In fact, before this, Mask Network has already extended its tentacles to most of the known subdivisions of Web3 by means of incubation, cooperation, investment and so on.

As the soul and founder of Mask Network, Suji Yan has been showing people the image of “Web3 evangelist” all the year round. He, who graduated from the same high school as Han Han, seems to have similar qualities to the once rebellious teenager. After studying computer engineering at the University of Illinois at Urbana-Champaign, he dropped out. During his exchange in Japan, he also went to the Fukushima Nuclear Power Plant as an independent reporter for Caixin Media to report on it. During his time as an autonomous driving engineer in Tucson Future, he was exposed to blockchain, and then met his current wife, a Bitcoin Core contributor. Under various influences, he entered the crypto world and then founded Maskbook (later renamed Mask Network).

Even in the Web3 circle, Suji Yan’s deviant image is quite prominent. For example, in order to express his rebellious spirit, he was interviewed as a “women’s programmer”, and he and his wife jointly launched “Anti 996 Lisence” to resist the work system in the Internet industry that they thought was unreasonable. The never-ending critique in the media.

Suji Yan’s language is full of philosophy and historiography. In his interview with “Under Waves”, he answered almost every question with allusions, trying to connect the past, present and future of human beings in the digital world, as well as the inextricable connections between them. In his view, the Web3 digital revolution follows the trajectory of human development and occurs naturally. Perhaps influenced by him, everyone in the Bonfire Union investment fund also has a strong sense of idealism. For example, the partners Cecilia and Taylor who have joined in succession also use the word “digital revolution” in unison.

But they also mentioned a vision: to be a Tencent battle investment for Web3. This is not surprising: Web3 is widely understood as an anti-giant, anti-monopoly Internet form. In this bizarre industry, countless people manipulate words such as encryption, consensus, and decentralization, and use ideals to whitewash their desire for business success or wealth. On the one hand, the Sujis try to fight against the giants, but at the same time they do not shy away from their ambitions to become giants.

How will he resolve this set of contradictions? Recently, “Under Waves” chatted with the Bonfire Union team including Suji Yan.

Focus on three major sectors, the digital world can break the physical boundaries

“Undercurrent”: There are no real giants in the Web 3 world, and the form of CVC is only common in exchanges and public chains. What is your investment logic?

Taylor: I think it’s still an ecological concept. For example, starting with the smallest idea, we offer small “dropout scholarships”. After that, we also sponsored grants on gitcoin, giving thousands to tens of thousands of dollars in financial support to Web3 social-related projects. For some projects that may be difficult to have commercial possibilities, we will choose the form of donation. It’s a little bigger – for example, like the “ETH Shanghai” hackathon we hosted at the end of May this year, if the founders want to formally raise funds after winning the prize, we can use the main body of Bonfire Union to invest, with a single investment of about 200,000-1,000,000 between US dollars. For those very mature projects, even if there is no investment opportunity from us, we will cooperate with them ecologically. To put it simply, the ecology has been established since childhood. Our strategies can cover projects at all stages.

According to the above logic, we will look at the three major parts of social networking, infrastructure and large entertainment.

“Undercurrent”: In the past three months, many areas of Web3 have declined. What are your investment priorities?

Suji Yan: Indeed, social, entertainment, DeFi and other projects have basically disappeared. It is difficult to find companies with three or five billion US dollars in the market now. But investment must be to pursue super-high targets, such as Ethereum, one is enough for a lifetime. The essence of human beings is that they need to be socialized. In the world of Web2, there will be companies with hundreds of billions of dollars on the social track.

“Undercurrent”: Social networking is the origin of the Web2 era and extends to everything. Will this logic be reproduced in Web3?

Suji Yan: Mask Network is basically a project that is still alive in Web3 and the earliest social networking project. In fact, social networking is naturally inseparable from many other fields. For example, sending pictures is one of the most basic social needs. It has existed since Web1. The technologies in it include CDN, database, social graph, and possibly a bunch of AI algorithms, etc., all for users to see to this picture sent by the other party. In Web3, these basically have to be redone. Maybe Google Cloud or AWS is very powerful, but after decentralization, its storage method has completely changed. Similarly, social outreach opportunities are almost a repeat of the past, and these are investment opportunities.

“Undercurrent”: Many views believe that the most important thing for Web3 at this stage is “pulling new”. Will your investment focus on this?

Suji Yan: Pulling something new is all established in a bull market. But when we invest, we must first think about what the investment is. For example, we are willing to occasionally buy a front-row audience to see new things, but the more important thing is whether it can generate value, which is especially important in Web3. .

Taylor: Newness is a very important topic in Web3 investment. We have investment protocols and infrastructure, but newness is more about the application layer. At the application layer, it is worth discussing how to pull the new one. Some new ones are particularly unsustainable. We have seen too many subsidy wars in Web2, and the difference between XX to earn in Web3 is not big. It is very important for new users to use the product to gain wool or to become part of a good network effect.

Cecilia: Many single IP GameFi projects look very good, but Web3 games are not purely operational products. They have joined many token transactions in the primary and secondary markets, and cannot escape the entire Crypto market cycle. A GameFi project that lacks a benign tokennomics design will hardly live to the length of the project’s design.

“Undercurrent”: What is a “good Web3 investment”?

Suji Yan: Many people think that Web3 has no value. I believe that value comes from the digitalization of human society. The process of digitization will not stop, and in the future, a super-sovereign digital world will emerge in parallel with the real world. The new world requires new banks, new cinemas, new post offices and more, and there are countless new opportunities here. Stick to decentralization and you can become part of these things.

Cecilia: Even in the field of entertainment or GameFi, we invest in projects that are relatively infrastructure-oriented. For example, we invested in double jump.tokyo. They help many IPs of well-known Japanese game companies to achieve blockchain adoption. This thing itself is sustainable. Yes, it can support it for a long time to unlock and have a relatively stable performance in the market.

“Undercurrent”: How to Identify and Control Risks in Web3 Investments?

Suji Yan: We separate some donations from real investments. First of all, we have a lot of donations to support public good. These are funded from the DAO of Mask Network. This part is more like a university endowment fund and has nothing to do with the main body of Bonfire Union. Second, we do not hold large positions or put money into DeFi protocols.

“Undercurrent”: Overseas funds are less likely to contact Chinese projects, and domestic dollar funds are less likely to contact overseas native projects, but many people will describe you as spanning China and the United States or globalization.

Suji Yan: We insist on internationalism, and the digital world has no physical national boundaries. At the same time, we have offices in Singapore, Japan and the United States, and our employees come from different cultures and countries, which can also greatly help us in terms of investment to get in touch with the most front-line projects in various regions of the world.

When investing happens in a Web3 world

“Undercurrent”: What kind of money do you use for your investments – cash, stablecoins, or tokens such as Bitcoin and Ethereum?

Suji Yan: We will not set such restrictions on ourselves, nor will we set restrictions on investment targets.

In the last cycle of 2016-18, in fact, a large number of Web3 investments were made with Bitcoin and Ethereum. Because the issuance of stablecoins at that time was less than 5 billion US dollars, it could not meet the investment needs of LPs. The project party is also willing to accept Ethereum. In the bull market, the token itself is an upward trend. Many projects are also built on the ecology of Ethereum and have received a lot of official help. The problem is that the price of token fluctuates greatly. After several cycles, people still tend to use the U standard to measure the final return of investment. Since 2020, with the emergence of many new compliance structures and stablecoins, the project side will basically not choose to take the token.

From the perspective of fundraising, the current practice in the industry is to raise USD and stablecoins, which may have different structures depending on nationality and tax location. In general, what kind of currency or even token can be raised depends on the compliance ability.

“Undercurrent”: What is the first goal of Bonfire Union’s investment – is it for financial returns, for the ecology of Mask Network, or something else?

Cecilia: I made a battle investment in Okex before, and I caught up with the bear market as soon as I joined. At that time, I made more equity investments around the exchange’s ecology, such as the exchange’s infrastructure, trading components, deposit and withdrawal components, etc. I understand it’s like a more pure throw.

In Mask Network, we have two roles. The first one is similar to the previous one. As a plug-in ecosystem, we can cooperate in a wide range, such as deposits and withdrawals, wallets, games, NFTs, data analysis tools, Defi, decentralized storage, etc. From another perspective, in fact, it makes sense to regard Bonfire Union as a separate fund. We will make some purely financial investments. Even if we do not see a direct cooperation point between the project and Mask Network products in the short term, we will invest in it. .

“Undercurrent”: What is the difference between you and CVC in the traditional sense?

Suji Yan: Although Bonfire Union is a CVC structure, Mask Network itself is not exactly a company in the traditional sense. You can understand that Mask Network is an important part of the social department in the digital world, so Bonfire Union may be more like China Merchants Office. Our investments serve the entire digital world, and get paid for it, serving the Mask Network, a public good, is secondary.

Taylor: The concept of public goods is present throughout Web3. If you say that the appeal of classical war investment is strategic coupling, financial returns and trend watchtowers, we do something similar to these, but the deeper level is around public goods, and we do not need strategic investment to deal with competition.

“Undercurrent”: Where does the investment team come from? Will you participate in the Mask Network business other than investment?

Suji Yan: Cecilia invested in exchanges before joining, and Taylor was traditional VC before joining. Next, more of my personal energy will still be on the Mask Network. We hope that Mask Network can take root in the social track of Web3, but there are still many problems that have not been solved in terms of products, technology, finance and so on. Other members of the investment team will participate in some of the work of Mask Network itself, but most of their energy will be on investment and the ecological synergy of our partners and invested companies.

“Undercurrent”: What is your decision-making mechanism? Is there anything special about Web3 investments?

Suji Yan: It is an IC. The three of us who are better at a certain segment will have a higher right to speak in the face of the corresponding project.

In fact, there is a characteristic of Web3 investment. Everyone invests very small, and then raises slowly. The macro reasons may be that the capital is not as sufficient as the previous two years, but there are also some micro reasons. Coinbase, Binance and other centralized exchanges, compliance or audit projects, such equity projects are actually not real blockchain projects, they are relatively indifferent to the proportion of shareholders, but the real Web3 project is difficult to accept. For shareholders with a high proportion, the overall amount of money becomes smaller and the decision-making process will be faster. The obvious change is that the process of DD will be very different.

“Undercurrent”: What’s the difference?

Suji Yan: In fact, the traditional DD method is rarely used. The DD of Web3 has become a very embedded thing. Information such as team, business model, historical evolution, etc. are all disclosed on the chain or written in the code. Several partners can’t see these things, but Mask Network has a very strong technical team that can help us with technical verification, and will also provide technical support for our portfolio after investment, which is our advantage. Excellent Web3 investment institutions like Paradigm must have excellent technical support capabilities.

“Undercurrent”: Many early foundations in traditional fields focus on people, but many founders of Web3 prefer to be anonymous. How to deal with this situation?

Suji Yan: Many founders may be semi-anonymous, he will not tell us his real name but abcd.eth, then maybe abcd.eth is his real self. Because all Web3 operation records are public, the founder’s resume should correspond to the on-chain interaction. When we were in DD, we focused more on these things than on who he was by name, what he looked like, whether he lived in Alabama or New York, and too much risk control.

People in Web3 are still the sum of new social relationships and are more direct and transparent.

“Undercurrent”: Is the trust between you and the project because you are both builders?

Suji Yan: I understand the bigger reason is because we are Operators. We’ve gone through the whole process firsthand, so we don’t ask stupid questions.

“Undercurrent”: What is a “stupid question”?

Suji Yan: I met a founder, chatted for a while and told me that the product can be launched after getting the version number. For a founder with this mentality, I think it is difficult to make a shot.

“Undercurrent”: What are the post-investment services required for Web3 projects?

Suji Yan: The post vote is actually solving the “what should I do in a certain situation” question, so when you ask the wrong question, there is no right answer. I don’t think those stupid questions should be considered by a Web3 entrepreneur. In addition, technical ability is also critical, which may be lacking in most VCs, they cannot afford to support so many programmers, but this is the advantage of CVC.

Cecilia: At the level of strategic decision-making, Mask Network is a project that goes through all the processes. We can provide some experience directly or indirectly obtained in the industry. The practical experience in the new industry is very valuable. In addition, we have invested in a lot of plug-in projects, and there can be relatively direct interaction between Mask Network and these project parties, and we will also promote the linkage with the communities of the invested projects.

Many institutions say that they can introduce resources such as exchanges, market makers, etc. This post-investment service with Web3 characteristics is actually becoming more and more homogeneous. If it is only a relationship introduction, it is not meaningful, and the internal experience of the exchange or personal experience will be much more important. We are entrepreneurs ourselves, so we know how to help entrepreneurs.

Taylor: The cold start phase of a Web3 project will require a lot of help. For example, if a founder wants to make a social application, he first needs an identity system, and he can directly plug the Web3 identity system into it; for example, if you are a game, you can directly let Mask Network users experience it. The combination of products that strategic investment/ecological funds can provide is unmatched by financial investment funds. Just as Tencent can provide a stage for many invested companies, we have seen that many companies with tens of billions of dollars have grown on this stage.

To oppose the giant is to oppose its colonial and non-advanced nature

“Undercurrent”: What is the meaning of Bonfire Union?

Suji Yan: On November 5, 1605, Guy Fawkes tried to blow up the British Houses of Parliament and ultimately failed (Gunpowder Plot), after which the Guy Fawkes mask and the Bonfire Festival appeared based on him and this event. In recent decades, this The story is still being adapted and presented to people. The source of Mask Network’s logo is laughing man, which is involved in Victor Marie’s novel “The Laughing Man” and the movie “Ghost in the Shell”. The two brand names Mask and Bonfire are both homages and interrelated.

Many VCs will call themselves so-and-so Capital or Ventures because they think of themselves as a banker or a capitalist. We believe that Crypto and Web3 are also causes of great significance to human beings.

“Undercurrent”: What is the ultimate vision?

Suji Yan: Decentralized digital world.

“Undercurrent”: What can ordinary people do in this ultimate vision?

Suji Yan: Actually, the Internet and even the mobile Internet era is no different from the life in the 1980s. The most important thing is to eat. In the past, I bought it myself, but now it has been replaced by takeout. But the new era will create bigger markets, more jobs, and greater progress. I don’t think the lives of ordinary people will change much, but in the future, when you look back 50 years from now, you will feel that the current life is unbelievably backward.

Taylor: It’s time to eat. But just talking about the economic part, this digital world will also be a more efficient and less frictional one. When everything is written on a decentralized platform and becomes a public property, the economic efficiency it brings is actually much higher than before.

“Undercurrent”: How do you view the relationship between this “belief” and financial returns in a certain period? Will there be conflict?

Suji Yan: There is definitely a conflict in the short-term. But in the long run you will find that “investing in the digital revolution” is right and everything else is wrong.

Cecilia: In fact, embracing the ideology of Web3 is a disguised guarantee for medium and long-term returns. We have seen too many projects in Silicon Valley. The founders have a good background and have received investment from large funds, but they did not perform well in the secondary market in the end. Because he just thinks that Web3 has desirable technologies, but he still uses the thinking of Web2 in the process of running the project, and he may not even figure out how to do it.

“Undercurrent”: Many people have also criticized Web3 for its overweight financial attributes. What’s your opinion?

Taylor: It’s a bit like the early Americans going west to dig for gold. Gold digging is like the financial property of Web3, but all kinds of things will follow. This matter has already started and there is no turning back. We will definitely see all kinds of things being built one after another. Now when we mention San Francisco, the first thing that comes to mind is a cosmopolitan metropolis, not the gold rush of the past, even if the name is so straightforward.

Suji Yan: I think everyone’s criticism is right, too much financialization is not good. However, more open financial and more comprehensive market-oriented reforms must be progressive and advanced, and the forces opposing it are all partial and short-term. We don’t make investments and don’t make short-term investments, so we don’t think short-term opinions matter to us either. If we think there is a digital world that will emerge, it will certainly not be based on existing knowledge, so we need to invest in innovation.

Among them, finance is the most likely to produce results, and it is also a confirmation of the current stage of Web3. From an investment point of view, the low-hanging financial fruits have been picked up by DeFi projects, but there are other opportunities, such as games, entertainment, etc. The logic from social to these is very similar to Tencent’s battle investment.

“Undercurrent”: What does it mean that Bonfire Union wants to be a Tencent battle investment for Web3?

Suji Yan: Tencent has made chat based on social networking. By extension, it can also invest in e-commerce, games, and entertainment. In fact, we also invest according to this idea. If Mask Network is a small Tencent of Web3, then with the analogy of Tencent’s war investment, it should be easier for everyone to understand our investment logic.

“Undercurrent”: But Tencent is obviously a giant to resist in Web3. Is there some conflict here?

Suji Yan: Giants are not bad, even monopoly can be understood in terms of efficiency, we do not defy the essence of business.

I think we can understand the Internet giants in today’s world this way: In the past few decades, the Internet was a new continent, and these giants were like the East India Company. When they arrived in the new world, they could see digital serfs everywhere and they could do whatever they wanted. Although the digital world is not a physically real continent, it is essentially not much different from the world in which humans exist. It has its natural laws, and private digital property is sacred and inviolable.

What we want to argue is not “whether a huge commercial entity should exist”, but its “coloniality” and “non-advanced nature”. What we want to argue is that giants use user data to do all kinds of things that should not be and are not correct. It is a reactionary and retrograde social reality.

“Undercurrent”: How to ensure that Mask Network “doesn’t go bad”?

Suji Yan: Even if “Code is law”, it’s hard for us to say how we can’t be bad, but we see open examples like Linux and Ethereum, they are also giants that have built hundreds of billions of dollars in ecology, and We can learn from the positive examples of these predecessors. There is no problem with business, people need business and the free market to survive.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/dialogue-with-suji-yan-rebelling-against-giants-and-becoming-giants/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2022-07-22 12:15
Next 2022-07-22 12:16

Related articles