Debate: Where to Build a Blockchain Company (Breakpoint 2024)

0:00Hey, everyone. As you know, Solana is one of the ecosystems I'm the most interested in. I've been incredibly bullish. I love to see the vibrancy of what is happening in the space. Unfortunately, I couldn't make Breakpoint this year, but the stories have been amazing. I heard the talks are incredible. And we're really proud of Real Vision to give you talks from Solana Breakpoint 2024 in Singapore. I really hope you enjoy them.

0:37Hello, hello. I think it's pretty rare for any crypto event that we have three ladies here. We always have this completely unbalanced gender ratio and too many crypto bros. And so now we finally have two beautiful ladies, founders sitting here, standing here, and then four steel men argument. Okay, so let's get started. And so the debate today is about the East and West. So Joanna and Cindy, and what about you guys that both give us an introduction and also your definition on what is East and West, right? Is it Russia, East, or West, right? And then so is it like the East and West divided by geography, by market preferences, or by ideology?

1:22Okay, please. Joanna first. Sure. Hey, guys. My name is Joanna Zen. I'm the co-founder and CEO of Soon. Soon is an SVM roll-up stack, the most efficient SEMI Muralab stack that brings the top performance of Solana virtual machine to other ecosystem, starting with Ethereum. So the reason I think why I was chosen to argue for the West is because I spent most of my life in, even though I was born in China, but immigrated to the US very early on and have only worked with Western companies in the past. Actually, this includes even pre-crypto, so only worked in the West for the last two decades, including OP, Optimism, Coinbase, and later on at the ZK project called Alio.

2:13So to answer your question, though, so you asked about how do we define the West versus East. To me, it's really just a geography definition, but specifically for the Russia, how did that lie, right? I would say by the Russian money being parked in Dubai, that would be the east. If it's parked in London, that would be the west. Cool. Cindy? Hi, everyone. I am Cindy. I'm the co-founder of Drift. This has me as the founder of Drift. I am not the founder of Drift. It's Drift. We're the leading DeFi platform on Solana with the largest perpetual exchange and borrow land as well as Spot. Most recently, we just launched prediction markets on top of our integrated pool of collateral.

3:01So we've been deep and building in the Solana space since 2021. I am debating on the Eastern crypto. Does crypto, Eastern crypto does crypto better than the Western crypto because I'm Malaysian Chinese, grew up in Malaysia and spent most of my career in the East as well. I used to work in Korea and Shanghai, and my career in crypto has been since 2017. I was a trader in the past, so largely trading on centralized Asian exchanges, such as OKEx, Binance, etc. So I'll be debating on this side today. And in terms of the definition, agree with you there. I think we should define it as Eastern versus Western Hemisphere.

3:49We don't need to go into too deep philosophy here today. That's out of scope, but we're excited to get started. Yeah, and the reason why I'm just standing in between. So I spent my first 18 years in mainland China and moved to US for the past decade. And my crypto story is also a very interesting East versus West as well. Because when I was having my first job at eBay and I was a product manager. and my, so my manager asked me to do research around the auto marketplace. Like that's like, that was 2012. That's when I figured out Sucro. And then, so I asked my Asian parents because they all want me to buy houses in like San Francisco, like how I can move the money out of China.

4:30Like, like it's like impossible, right? It's like capital control. Like everyone can only move like 50K. And so I asked my mom, what about we use this Bitcoin thing? Um, so my mom now is not very happy because I wish you have like, just like, like hold on to those, like those like Bitcoin like instead of my housing like Noe Valley in San Francisco okay so I think probably like the next question gonna be for like Cindy right because I Cindy as a like Eastern founder and then so you are flying in between like New York and like KL now so like being like an investor in drift and so I know that drift is also very like western or like or probably like global focus like when it comes to like traders and like users acquisition and like can you share a little bit more that because like so if the assumption is like like ETH has like more users and then so why you guys are focused on like New York?

5:27Yeah I think two things and that's the core of our argument today is that a lot of the capital markets that are more mature happens to be in the in the west and the capital mature markets creates opportunities for zero to one type of innovation, which is why the founders of Solana, founders of Ethereum are largely Western-based. But distribution focuses largely on the East. And there are two things that the East does better, which is from the outflow of the initial innovations from the West, the East does distribution, I would say, 100 times better due to two things. One is necessity. that we talked about capital controls in Asia.

6:13And a lot of these are the reason that I got into crypto in the first place. Growing up in Malaysia, there's a lot of rampant capital controls. Can't even take 10 to 100K out without being flagged. So crypto provides a very natural use case. Specifically, stable coins like USDT and USDC are very rampant in Asia versus the West. The second is a very flourishing developer ecosystem in Asia. So our team, we're about 30 now. We recently just announced a funding round to expand our team to 50 people. We're quite split between East and West. And we kind of followed the similar structure of a lot of the early innovations of crypto companies where we started off building our technology with Western developers and Western researchers.

7:09But when it came to distribution and growing the technology, all of our most recent hires in the last year were from the East. So Taiwan, Vietnam, Malaysia, Singapore. And this sort of shows the evolution over time. Distribution happens in the East, but innovation largely happens in the West. Yeah, so I think the question for Joanna then is going to be, and yeah. Can I challenge that a little bit? Yeah, sure. Yeah, so I think going back to the point, like why West, right? So superior education and immigration policies, right, allows these Western educated Eastern founders to stay in the U.S., right?

7:51So maybe just to go back to the question, why, Cindy, are you moving, and I know David, your co-founder, are moving to New York as opposed to staying in KL, right? Maybe because you thought about, you know, you get better coffee and Wi-Fi. Maybe that's it. Well, I think that going back to the dichotomy of this question, like I think we all agree here that crypto is inherently global and to focus on East versus West is a new question, but we're here today, so we can talk about it. But I do think that a combination of the best of both is the best way to operate here. For founders that need to fundraise, raise capital, I think being in the U.S.

8:32is definitely the right decision. And having stricter regulations in the U.S. also makes it more difficult for a founder to scale their company. So starting out, raising capital in the U.S. is great. Capital markets are awesome, a lot of money there. But as you're going into expansion mode, I think that the real users are in Asia, the real scale of developer ecosystem is in Asia. Yeah, so for Joanna, and so now you guys are building, so now you're building a generic developer platform, and then so going to bring on more application, and then you were at Optimism as well. So the story for Optimism, so I still remember clearly being an early investor in Optimism, and they're looking for non-financial application.

9:19They cannot, back in the day, So, like, back in the day, there were not many non-financial applications in, like, U.S. And so they have to come to Asia, Vietnam, and then just look for, like, gaming company and, like, GameFi founders, right? And then so then the question is, like, if, like, West have, like, enough users, and so why we have seen from, like, past cycles and most of these applications, like, Stepan, like, Access Infinity, and then so none of the founders or, like, markets are ever started in the West. Well, there are more than 60 % of the world population in Asia, so if we don't onboard more users, it's kind of freaking embarrassing, right?

10:02Jokes aside, basically, I think it comes down to two things. One is viral marketing, which is something that Asian funders, marketers just do really well. Something to, as you mentioned, right, like Stepin and Axie Infinity all have done this before and actually with Vechai, it's a Web2 company in China. They basically pioneered this mini games on phone and now Tang is kind of stealing the idea and make it a thing. I think Western companies are very much better at building narratives. So basically going back to why you see more GameFi companies being founded in Asia, I think it kind of goes back to your point actually, Cindy.

10:53You said the fact that it's not as advanced economies here, right? So people are touched by crypto in a meaningful way. So what I mean by that is, you know, you guys are all here at the breakpoint yesterday at the awards winning the roast, I would call it. The one quote I remember is like, we all love referee gaming, also known as the Indonesian or Filipino basic income. So people really care. Going into crypto is life-changing for them. Have you ever wanted to trade Bitcoin but haven't dared try? With Plus500 Futures, you can trade crypto without the hassle of opening a wallet. With just a few clicks, you can register and start practicing with their free and unlimited demo.

11:44See a trading opportunity? You'll be able to trade it in just two clicks. Feel ready? You can move to real money with as little as$100 once your account is approved. And the great thing is that in addition to crypto, Plus500 gives you access to a wide range of instruments. S &P 500, NASDAQ, gas, and much more. Explore equity indices, energy, metals, Forex, and beyond. With a simple and intuitive platform, you could trade anytime, anywhere. Experience the fast, accessible futures trading you've been waiting for with Plus500. With over 20 years of experience, Plus500 is your gateway to the markets.

12:17Visit us.plus500.com to learn more. Trading in futures involves the risk of loss and is not suitable for everyone. Not all applicants will qualify. Plus500, it's trading with a plus.

12:30Yeah, and so like, I think that the clear like division when it comes to like East and West, and then so like that's like centered around stable coin and so here like if you ask anyone here like most of the users like on the ground so like Singapore is not very Southeast Asian so like we have to admit that like like Singapore is more closer to the developed like the West world right and if you go to Philippine if you go to Indonesia, Malaysia, China, Taiwan and it's everything is tethered like USDT right and so like there's a very interesting number that so if we look at the on-chain, so if we look at the wallet overlap between USDC and USDT, guess what the number is?

13:14It's 2.8%. Right. So, like, everyone in the U.S. use Circle, Coinbase, and USDC, but the distribution is not just happening here. And so, and I think we have this very interesting offshore and onshore dichotomy, and so then, like, the question probably for both sides and it seems like the stablecoin becoming this shadow dollar play and new banking play. But the stablecoin distribution is highly, highly separated. And then so probably for StingD, because you guys have to onboard USDC, USDT and all the stablecoin as I clarify. So how do you see that distribution being so sparse out? Yeah, I think the stablecoin, it's important to talk about what people are using the stablecoins for as well.

14:09One is trading. People don't want to re-nominate in fiat once they've entered the crypto ecosystem. So it's very important to build on-chain economies around supporting different stablecoins. So DRIV, for example, we have a cross-collateral system. And we enable, I think we're on the only DEXs that do this. we enable multiple sources of stablecoin collateral to be used as collateral. So USDC is actually buying a larger pool, as is on Solana. USDT is about maybe like 10 % of USDC right now. But that tells you the bifurcation of the users. Within Solana ecosystem, I think the users are currently still very much more on the Western side.

14:56When you compare it to something like Tron, which is a very clearly eastern-focused chain, I think the USDT emissions versus USDT are like 100 to 1. So for us as a DeFi protocol, it's very important to build port and rails around both sides so that western users and eastern users can allow for both. But when we look at trading volume, even though the USDT volume is 10 % of USDC, the trading volumes generated on the eastern side are much higher than on the west. So these people are clearly using USDT to do a lot of trades as well, not just as a form of payments. So for Joanna, given your experience at...

15:40Can I go back to that question and answer that? Yeah, I think it's a really good point, right? Why do we see very small overlap between USDT, USDC? A lot of this has to do with not just perception, but the reality of the West being more compliant. So the kind of general consensus is that, let's just use Coinbase and Binance example. Coinbase, it's a lot more compliant, and you have to pay 30 % tax by trading, and reporting tax on top of it. And my devout guy would tell me in India, people actually still prefer to use Coinbase, even though Binance is a much larger market cap and much larger trading volume there.

16:29And the reason is because the local banks will close your accounts if it's linked to Binance crypto because they think it's, again, could be perception, but also high likelihood of nefarious crypto activities happening. So people would rather just pay that extra money to be on Coinbase just to make sure that their assets are not going to be taken away. And that's a big deal because we agents are very cheap. Yeah, so Joanna, just given your experience at Coinbase before, and so thinking about the distribution, right? So now you're building a platform. And then so, like, are you going to, like, repurpose, like, some of the prior distribution, like, techniques, like, from, like, Coinbase?

17:19Because, like, Coinbase, like, yeah, so, like, as you said, it's, like, highly compliant. But the thing is that when it comes to, like, so when it comes to emerging markets, and so Coinbase, like, so far does not have a relatively good, like, distribution so far. And then so when it comes to Sun, and then so have you guys think about, like, the actual user distribution plan? Yeah, absolutely. So just by maybe starting with my team, right? So I am one of the two only people that's actually sitting in the West. So even though I guess we're by definition a Western company, but we're actually very much deeply rooted in the East.

17:59And all my developers are actually Chinese because they're just as good as the Bay Area developers and I pay them one third of the salary and everyone's still happy. So, yeah, that's a little joke, but it's true. But, yeah, just to come back, right? So on the user side, we, you know, because we have these people that's on the ground, right, very much deeply rooted in the local communities and we know where the developers are, the good developers are especially, we are absolutely focusing on the emerging market side, right, especially the APAC. So we're on a mission to elevate these emerging market developers because we believe the next wave of high quality developers is going to come from.

18:45Yep. I think this also leads to the next argument. If West has the tech and why all the developers are Chinese and Eastern developers, and I think for Cindy as well, most of your developers are in KL. Half, half. Yeah, so if we look at the actual developer onboarding, and I think the thing is, okay, at a very, very high level, most of this frontier crypto publication, indeed, coming from the West because of the brains and the professors are still in US college, whatnot, right? But the actual developer who are making things happen, it seems to be all Ethan developers. So Joanna, do you want to start with that?

19:29So have you seen the developer quality or their different lifestyle or working style? So why you guys eventually land on having most of Ethan developers? Because the Ethan developers, they work hard and they deliver fast. So take ourselves an example. We basically launched the DevNet within three months, and TestNet, we're actually, I guess, alpha for everybody. We're going to announce that next week. And the whole process took about five months compared to maybe some of the other SVM projects that have been doing research for years and barely delivers. So, you know, you have a lot more runway, right, with also less kind of a burn rate when it comes to cost.

20:21So I think in general, just, you know, being able to tap into the talent pool here is really important. And we, you know, going back to my point, right, we were all about getting the developers onboarded in this part of the region. And the other thing I want to actually give Cindy a shout out, I think, you know, Drift, right, these are the great examples, like what inspired us about why we wanted to, you know, we wanted to onboard these next wave of high quality dApps that can actually track users from both West and East. Yeah, I think to wrap up, a lot of the users are in the East. A lot of the innovation happens in the West.

21:05But, you know, when you look at Binance with 200 million wallets, when you look at Korea, one in five Koreans have a centralized exchange account versus just 70 mil in Coinbase, right? Like a lot of the speculation, payments and necessity for crypto happens in the East alongside the ease and accessibility of developers here. But combining that with innovation and the capital markets to the West is where we want to be. And I think both our companies are positioned in that way. Joanne, I want to give us closing remarks. Yeah, the closing thought is it doesn't matter if it's the East versus West.

21:43That division is all very arbitrary. We're in crypto for a reason. We're here for decentralization. And that transcends borders. And at the end of the day, we're here as unifiers, not dividers. We're all here coming from the West and East into Breakpoint. Maybe we don't win a Lambo or even spot one of the three Lambo's that Cindy fought over. But we're all here for fun. Thank you, everyone. Thank you to the ladies. And so I hope that we crypto people can be completely meta-solving, apolitical. And because I think after COVID, there's only one consensus that can be easy generated. It's like we all deserve better government.

22:25Okay, thank you, everyone. Thank you.

22:56With just a few clicks, you can register and start practicing with their free and unlimited demo. See a trading opportunity? You'll be able to trade it in just two clicks. Feel ready? You can move to real money with as little as$100 once your account is approved. And the great thing is that in addition to crypto, Plus500 gives you access to a wide range of instruments. S &P 500, NASDAQ, gas, and much more. Explore equity indices, energy, metals, Forex, and beyond. With a simple and intuitive platform, you can trade anytime, anywhere. Experience the fast, accessible futures trading you've been waiting for with Plus500.

23:29With over 20 years of experience, Plus500 is your gateway to the markets. Visit us.plus500.com to learn more. Trading in futures involves the risk of loss and is not suitable for everyone. Not all applicants will qualify. Plus500. It's trading with a plus.