Viewpoint: Why are Chinese entrepreneurs optimistic about Web3?

With their own advantages, Chinese projects and entrepreneurs will have a broader market space in the Web3 field.

Original title: “Do more application layers, do more Web3 Chinese entrepreneurs! 》

I don’t know when, the Web3 Chinese entrepreneurial project has become synonymous with “local dog”.

Tier 1 VC investors asked, was the project done by the Chinese? If yes, then invest with caution or undervalued.

Secondary market investors asked, is the project a Chinese project? If yes, then you have to run fast, Chinese projects like to cut a handful and run.

When “Web3 has nothing to do with China” is swiped in the circle of friends, it just means that “Web3 is closely related to the Chinese” .

At the freezing point of Web3 Chinese entrepreneurs, we clearly shouted the slogan:

Do more application layers, and do more Chinese entrepreneurs going overseas!

see multiple application layers

Our regular readers should be familiar with the fact that we previously wrote an article called “Encryption Heroes, China Broken File”, which raised a possibly “politically incorrect” point of view:

Whether it is the Internet or Crypto, the Chinese or Chinese are not good at the underlying infrastructure and protocols. The advantage lies in the application layer, especially in the fields related to human nature, such asopening casinos, social networking, e-commerce, and games…

In the era of Web2.0, the success of China’s Internet in the application layer seems to prove this.

TikTok has swept the world, and in 4 years, it has become one of the 1 billion MAU “clubs” in the global APP; “Yuan Shen” has become the highest-grossing RPG mobile game in the world within half a year of its release, and Mi Weijun (fans of Mihayou) are all over the world… In Web2.0, Chinese applications can “dominate the world”, then in the Web3.0 era, Chinese can also.

In the crypto world, there has always been a trend of “heavy protocols and light applications”, which may be related to the investment theory of “fat protocols”.

In 2016, Joel Monegro, who was still at USV, published an article called “Fat Protocols”. The core idea is that the value capture mode of blockchain and Internet is different. Most of the value in the Internet era is captured by the application layer , such as Google, Facebook, Ali, Tencent, etc., but the underlying protocols such as TCP/IP and HTTP that provide support for the Internet cannot capture value.

The blockchain is on the contrary, the value will be concentrated in the shared protocol layer, and only a small part of the value will be distributed in the application layer . Therefore, there are the sayings of “fat” protocols and “thin” applications, which to a certain extent has also led to a boom in public chain investment.

Looking back now, Layer 1 was indeed the biggest Alpha of the past few years.

But must the fat protocol be an eternal truth?

I don’t think so.

First of all, protocols and applications are not necessarily the relationship between “fat” and “thin”, but “before” and “after”. First, there is the improvement of infrastructure, and then the prosperity of the application layer.

Therefore, rather than saying that Layer1 captures more value, it is better to say that the requirement of L1 itself is “big enough to be secure enough”, especially when POS has become the mainstream consensus mechanism.

When the public chain competition enters the white-hot stage, L1 will gradually become the new Beta, and the application layer will be the new Alpha.

The reason is very simple. In the future, if the Web3 narrative wants to continue to develop, it will definitely need more users, and “out of the circle” will become a new challenge.

Applications capture users. Compared with protocols, which can only achieve value capture through a set of established rules, applications are easier to build user trust and strengthen user stickiness. Users follow the application, not the protocol.

As long as there are enough users, the application will have the capital to compete with L1.

On the one hand, applications can get rid of the constraints of a single chain and expand on multiple chains.

More importantly, when the super application is born, it contributes a large amount of user traffic and funds to the protocol layer, but has to “pay tax” to the protocol, then the super application has the motivation to fork the protocol, form its own chain, and put itself To build an infrastructure, the original agreement is simply powerless to stop it.

This is an inevitable trend.

When the number of Axie Infinity users is large enough, Ronin, an Ethereum sidechain serving Axie, came into being;

After DeFi Kingdoms became the absolute traffic overlord on the Harmony chain, it chose to cooperate with Ava Labs to launch the Subnet (subnet) DFK Chain;

Yuga Labs, after the Otherside Metaverse offering caused severe congestion on the Ethereum network, proposed the Apecoin DAO to create its own chain…

In the future, Web3 will be the stage of the application layer. It is the advantage of the Chinese to create a Web3 super application that can break the circle and capture a large number of users.

executive power

In 2018, a documentary called “Ran Dian” was released. Zhang Ying, the founding partner of Matrix Partners, said a very controversial sentence in the film:

“Foreign entrepreneurs regard entrepreneurship as a competition, while in China, entrepreneurship is a battlefield, either you die or I live. If you fight with Chinese founders, you will be killed to pieces.”

Viewpoint: Why are Chinese entrepreneurs optimistic about Web3?

Then, it was ridiculed by the crowd.

“That is, how immoral you are – Yu Qian ,” commented Zhihu netizens.

However, I personally think that what Zhang Ying said has some truth. An objective fact is that “the Chinese team is more volume and the execution is stronger . “

For example, the founder of the recently popular Move To Earn project STEPN said in the AMA:

STEPN took only four months to complete what the overseas team could do in a year and a half (I think it could be done in a year and a half if it was handed over to the European team), including the development of wallet, NFT trading market, game numerical system, GPS Signal processing, AI anti-cheating, etc. In order to achieve these, the two founders took turns to be online 24 hours a day. Especially in the early days, it was difficult to recruit, and one person often had to do the work of ten people.

There is no success for no reason, “greatness” is all boiled out.

In the future, when the application layer becomes the main battlefield of Web3, the competition will become more and more “rolling”, and execution will be more and more tested. Compared with “rolling”, the Chinese team has never been afraid of anyone.

What’s more, China has always had an engineer bonus, so even Silicon Valley projects choose to recruit engineers in China, which is easy to use and affordable .

Break down cultural barriers

In the Web2.0 era, Chinese teams trying to start a business in Silicon Valley are often criticized for thinking too Chinese and not integrating American cultural genes. It is difficult to truly understand the needs of the local American market and break into the American market.

This is the problem faced by all Chinese going overseas to start a business – the barriers of different countries and national cultures. Therefore, a large number of Web2 companies will choose to localize first, trying to break the cultural barrier.

But in Web3.0, you only need to master a set of cultural narratives, “GM, WAGMI, LFG, APE…”. The Web3 culture is to a certain extent separated from the restrictions of the nation-state . Money becomes the biggest consensus.

This is also a breakthrough difficulty from Web2 to Web3. It is necessary to have a deeper understanding of the community and culture, rather than relying on one’s own development and product capabilities, it is possible to “reduce dimensionality” in Web3.

In turn, once this cultural narrative is understood and incorporated, globalization becomes easier, cheaper, and broader than Web2.

Digging Chinese Entrepreneurs

“Buy when no one cares, and sell when there is a lot of buzz.”

Whether it is the primary market or the secondary market, the biggest Alpha often comes from the “non-consensus” before the consensus.

An interesting example is that when STEPN raised funds in the primary market, almost no VCs were willing to invest in them in the first three months. VCs from Western backgrounds could not understand them. VCs from Chinese backgrounds looked at them and said, “Isn’t this fun?”

Finally, with the help and endorsement of Jason, founding partner of Folius Venture, and Mable, partner of Multicoin Capital, there are gradually overseas VCs willing to invest in STEPN…

Compared with the well-known popular tracks, perhaps the big Alpha opportunity lies in the “biased corners” that are despised and despised.

For example, now that a large number of Crypto VCs are going to Silicon Valley to grab the quota of large projects with 1B valuation, it is better to look at the Chinese entrepreneurs who are really working around them.

Previously, a traditional US dollar VC practitioner asked me how to invest in the current primary market of Web3. To be honest, I am a hen (don’t know), I can only give an immature suggestion to buy the bottom of excellent Chinese entrepreneurs who go overseas, It’s freezing time.

Posted by:CoinYuppie,Reprinted with attribution to:
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.

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