Fireside Chat with Bybit’s Ben Zhou (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.

0:37All right. What's up, Ben? It's great to see you here. Amazing event. amazing event. Yeah, it's awesome to have you here. I think the first time we actually met in person was this time last year. Yeah. Yeah. Actually we gifted Ben one of the soccer phones which ended up being actually a pretty valuable memento. Yes. Very, very good. So I'm curious you know, Bybit has been breaking all sorts of barriers and doing an incredible job over the last couple of years. I even want to learn for myself what is how did you get into crypto? What's your background? What's the founding story of Bybit? We founded in 2018.

1:19Back then, my background, I was running a retail forex exchange. I was always facing retail, doing an exchange part of the business. By 2017, I really got into crypto because of all these ICOs, lots of money. I wanted to find out an area that I'm good at. I wanted to devote it to the industry. At the time, there were only two exchanges, being BitMax and OKEx, that offers derivatives. For me, my forte is on the margin and derivatives trading. When I look at the exchange at the time, it was really very simple compared to now. It was really just a website, and typically whenever the market moves, there is overload.

2:03You simply kind of open the exchange. So for me, I felt like traders deserve a much better trading experience. And that's how kind of Bybit was founded. The idea was trading everything by Bitcoin. So Bybit. Or we say trading the world bit by bit. That's kind of our initial slogan. But now we're a whole ecosystem. We have spot, we have fiat. We have pretty much all the products. Got it. And for folks here, it sometimes seems like the exchanges are all kind of very similar to one another. And so what's different about Bybit versus other exchanges? Yeah, no, it's a good question. I think, at least for the top players, we have different strategies.

2:50I think with the last kind of previous circle on how exchanges position themselves, is that actually in this industry position, Exchange has been the meme kind of center the stage. Where I see, we see Exchange should be the one setting up the stage and let the ecosystem, the projects go on the stage. So we see ourselves as completely infrastructure players and this is why by a bit we don't have our own ecosystem or in the way that we don't have our own chain, our own type of this type of web 3 play. but we take clients and feel the web to adoption to Solana to other ecosystems that's one thing and we've been always very open on working with different partners by there was the first one to work with circle or USDC we're the first one working with Athena USD where the now we are I think we want to be the big supporter of Solana ecosystem so we've always been working with players that's I think one of the main differences.

3:53Got it. And how do you think about, sometimes people think that centralized finance or CeFi and DeFi can even be competing with one another because after all, you know, one could say that liquidity, there's only so much in the ecosystem. And so what's your perspective on that where they are collaborative and where they may also be competitive with one another? I think to our perspective, they are not competing at all. is complementing. Our job, again, we build the road, the bridge to take people to wherever they want. This is why Babbitt is launching where we're building the Web3 wallet. We also see the other exchanges are building their Web3 wallet.

4:32I think at the end of the day, we don't build the city. Solana, you are the city. We take clients to you. For example, new clients who don't know much about crypto, they need something that's familiar with the email registration, they can get access to, then we take them there. At the same time, if you want to explore Web3 and you need something similar, the Exchange offers that as well. Because typically you see that with Web3 wallet, you need a lot of investment, a lot of infrastructure. And this is where the Central Exchange have the resources, the manpower, to build these big, massive Web3 wallet to support these type of functions.

5:12Got it. So recently there's been a couple of new LSTs on the market. It's BB Sol. Yes. I'm joking that's our new baby. Yes, yes, yes. And so how does that play into the C5, DeFi, like the Web3 strategy of Bybit? Again, we don't really distinguish. It's one of the biggest asks from our community, from our users, is that, hey, you know, there's all these different Solana LSTs. Solana being one of the most adapted ecosystem and you have a lot of token holders on Bybit who want to use Solana to trade as collateral but at the same time earning a yield. So for us it's quite normal and very easy just to say hey we discussed with the team how do we participate in this LSD ecosystem so that allows our users while holding Solana can earn the yield and trade at same time.

6:11So it's really from that perspective. But I think the team is also talking to Solana team extremely close to figure out what are some of the other ways we can take this forward. So I mean what's your perspective on Exchange? I think all the major ones are launching LSDs. What's your perspective and what do you think these LSDs place in your ecosystem? I think it's great because I think that Solana has one of the most diverse diverse staking ecosystems by a long shot, right? And one of the most diverse and also one of the most innovative staking ecosystems. And as it is, I think, what is it? Over 200 million users in crypto are using centralized exchanges.

6:51It still is the number one kind of channel of adoption and product market fit, user market fit in this entire industry as the additional use cases get built out. And so given that, having sort of diversity of assets that provide users what they want, I think it's pretty cool. In addition, I think that the more there's representation of those assets in the primary venues of liquidity, the more that you can create people in the ecosystem start to create interesting products like using LSTs for collateral. And that helps also, in my mind, boost the entire ecosystem. So it's all about once you have liquidity, certain asset, and there's a lot of economic loops that can be built around that.

7:36Yeah, one trend we're seeing is the moment we're launching BBSO, which is the Bybit LSD, you will start to see other clients who are not holding Solana will be switching to Solana because they want to be earning a yield on top of whatever they're trading. Because now all these changes are supporting multi-margin system. So you can use any token to trade anything, whether it's Bitcoin or Ethereum, so it's really kind of helping the token holders that if you believe in this system, you believe in this ecosystem, you can just hold and keep earning. And that kind of gives Solana a competitive advantage compared to other tokens that don't have the SSE so easily.

8:18Yeah. So what's next on Bybit's radar? Not necessarily as regards to Solana ecosystem, but what are kind of like the next few things that you're focused on? Yeah, I think one area we want to really focus on on is the Web3 wallet. Currently I think you have other exchanges doing a really good job. We think that we really need to invest into this aspect more, giving our self-custodian wallet more of a capability, more infrastructure to connect into a multiple ecosystem as well as offer users you know some airdrops and basically the extra layer of safety. One kind of innovation we're doing is that how can we kind of help clients to prevent scams and fraud on a self-custodian wallet.

9:06So what we're doing is using a centralized way. Basically, if clients is inputting an address that we labeled in our big data system as a scam, we will have a big pop-out to tell users this is really a scam address. You've got to be careful. So this is done by a centralized team. But at the same time the team is looking into potentially if a client is already transferring a big sum amount, we could have another team hijacking the price, the fees, to block that transaction for the users. So these are some of the centralized ways to handle, I guess from our perspective, to help the clients a bit.

9:45But the end goal is to protect users and make sure they have a better experience. Yeah. Yeah. So by having started off as derivatives exchange and now expanded into other trading products, what do you think about this sometimes critique of crypto, which is that the only use case of crypto speculation? That's a debate we had yesterday. Have you ever wanted to trade Bitcoin but haven't dared try? With Plus 500 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. See a trading opportunity?

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11:07Well, it's a good thing. Well, I think whatever drives users into this industry, I wouldn't criticize it. I mean, without, I want to be honest, perfectly honest, without the speculation, maybe a lot of us won't be in this room. At least without that first part to get us into the industry, right? So I think that part is probably the first for a lot of people who find out about this industry and learn. And then they start to notice technology can really change the world. can really do many different things. And this is why we start to really get involved and get into the whole thing. So I think it's one way to look at it.

11:46But anyway, it's good to get users in. So our job is to, you know, get users in, feel best adoption, whatever way it can be done. We don't really care. Yeah. And what do you think about the evolution of various financial use cases beyond more of the trading and liquidity-oriented stuff as people get into payments and to a number of other folks in the industry of particular P2P payment networks and those types of extensions of the financial ecosystem. What do you think about that? Yeah, I think crypto is becoming so big now that different parts of the world views crypto in a very different way.

12:24To give you an example, we have a crypto cut in Argentina and it's been adopted really fast. Reason being is the local currency is not doing so well. we cannot imagine if there's no crypto what the local people do with hyperinflation. So you can see their behavior is very different than, let's say, Japanese users on Bybit. They would switch their salary immediately into stablecoins or Solana or these tokens. And they would use it as a bank, use Bybit as a bank app to daily access, use the crypto card to buy, go shopping and buy coffee and doing really that aspect. So for these countries, crypto has really become their day-to-day and replacing their financial systems.

13:10So I think that's one way. And you have other countries that's really good at airdrops. Other countries really good at trading. So it's more covering different aspects. And here in Southeast Asia and really this part of the world, what are the primary use cases and how do people use crypto here in Southeast Asia? Southeast Asia, it's also quite different. I would say Chinese users, Korean and Japanese, are mainly using for trading purpose. So I would say majority of these retail users view crypto as a way to get rich quick, basically. So a lot of leverage, high-level trading, a lot of new listed asset trading.

13:59So whenever there's new listings, new projects being listed on exchange, these countries typically get very hyped up on that. And then I think for Vietnam, Indonesia, Thailand, they actually focus more on spot. They're very into new token, meme coins, these type of things. Not so much on the derivative side of trading. So you start to see different kind of patterns of different players. I don't know, what is your perspective on Southeast Asia users from Solana perspective? Well, it's something that I'm trying to learn more about. My perception of Southeast Asia is that you have a lot of currency fragmentation in a place like Southeast Asia.

14:41So you have relatively mature economies, a lot of currency fragmentation that also sit between hedge funds of, I guess, the South Asia and North Asia, right? So I wonder, even though this is potentially interesting, you come from an FX background, but I wonder at some point, I wonder if, when, are we actually going to start to have FX markets come on chain? Right now, it's all, I don't know what the dominance of USD stable coins are, but it's significant. It's extremely dominant. Will there be actually FX markets on chain or, you know, back to the other, is it really just all about speculation, which means it's going to be a US dollar oriented economy?

15:22No, we're seeing, So typically for the markets, the clients are very good at trading. They have that desire. We actually listed, we have a new product called MT5 that's listed. And we still see these countries I mentioned like Japan, Korea, Europe too, are very good at trading Forex. So in the product, we have Forex, especially as in last week with the U.S. Fed dropping rates. There's a lot of volatilities with EURUSD and gold. So these clients are trading. So for exchanges like us, we have traders that are hardcore and looking for volatilities. If you ask them, what's the new token, this ecosystem?

16:00They're like, well, I don't care. I don't know. I'm just here for the volatility. But then you have, I think, your audience is more into the tech, the ecosystem play. So it's very different players. Got it. So lastly, anything new on the near-term horizon for Bybit? Any alpha we can share with the crowd here? we need to support Solana more so we want to see more projects coming in so let us know guys you see I gotta say also thank you very much for Bybit for just being such a big supporter of Solana ecosystem it's really been great thank you thanks guys

17:19Transcription by CastingWords

17:47We'll see you next time. It's trading with a plus.