Independent researcher Chen Jian: Experience sharing and industry insights from cross-border technology experts

Chen Jian, an independent researcher, usually spends more time on Twitter to share some thoughts and research on the industry and projects. In addition, he also personally participates in and supports some early projects as a consultant and investor. He came into contact with blockchain technology while studying for a master's degree in 2017. After graduation, he joined Alibaba and got involved in the field of blockchain technology again due to the opportunity of cooperation with Ant Chain. After that, he joined Sequoia Scholars Program of Sequoia Capital. Since he did not find more development opportunities in the Internet and traditional financial fields, he finally decided to devote himself to the Crypto industry.

Currently, Chen Jian mainly devotes his energy to the research of industries and projects and shares a lot on Twitter. On the one hand, he is engaged in cryptocurrency trading. On the other hand, he gradually turns to the upstream of the industry with his technical background and work experience in the Internet and financial fields, communicates with primary market projects and institutions, and assists project development as a consultant and early investor.  

In view of his rich experience and the wide range of player groups he represents, OKX specially invites him to be a sharing guest of the "Friends of OKX" series of special topics, hoping that his transformation path and understanding of the current situation of the industry will be helpful to Web2 technical talents who are watching Web3.

"Friends of OKX Series" is a special column produced by OKX, hosted by OKX official community ambassador Mercy (@Mercy_okx), which aims to provide learning reference for novice users by exploring the work stories, industry thinking and lessons of KOLs from different backgrounds.  

1. Share the experience of transitioning fromWeb2toWeb3 

Mercy: As a person with experience in large companies and well-known funds and a technical background, what natural advantages do you think technical practitioners have in theCrypto field? Do you have any suggestions or experience sharing for technical leaders who are seeking to transform intoWeb3?

Chen Jian: Although the experience of Web2 has almost no direct application in Web3, there is still a great possibility of reuse in specific skills and working methods. For example, if you have been doing user growth or operations in an Internet company before, these ideas are also applicable to Web3 projects. We can see that the founders behind some well-known Ton ecological projects are people who were previously responsible for user growth in large Internet companies.

However, for product managers, the situation is different. If you were a product manager in a Web2 company before, I suggest you completely abandon the product methodology of the past, because the product logic of Web3 is completely different.

In terms of technology, the Crypto industry is still an industry driven by early technology narratives. As a developer, the technical dividends you can get in this industry are very considerable. This dividend is mainly reflected in the following aspects:

1. Although the effect has weakened now, in the last bull market, just writing scripts can be used for arbitrage, and many people made a lot of money.

2. You can become a technical contributor. For example, the @WTFAcademy_Education Academy created by 0xAA has received funding from many well-known public chains. This is not only a public welfare education that allows more people to participate in the blockchain, but also a very successful commercial transformation.

3. Developers are the most scarce group in this industry because they can bring activity to the chain and bring ecological opportunities to the project. Therefore, various projects are competing for developer resources.

4. You can participate in on-chain activities, develop small projects, or even become a hackathon bounty hunter. Although it is difficult to judge whether this behavior is good or bad, it is indeed a way for developers, project parties and the ecosystem to get what they need.

Even if you don't write code directly, as long as you have some understanding of the entire technical framework and can understand the code, you can do project research and make judgments on the project. This judgment can be used for secondary market transactions, primary market investments or becoming a project contributor.

In general, if you are a developer now, as long as you find the right way to enter, this industry will still bring you rich returns.

Mercy: Combined with the current development status of the industry, for novice developers who have just entered Crypto and Web3, which tracks can accelerate growth?

Chen Jian: For novice developers, my advice is:

First, you must find an organization. You can join a developer community or participate in several hackathon projects. Even if you just help with chores, this is also very important. It is very important to practice through this organization and participate in actual development work. Try not to work in isolation.

Secondly, you can consider platforms like WTF Academy made by 0xAA. There are many developers here, and you can submit code on GitHub and contribute your own strength. Even if you just take courses, collect some badges, and then join the developer community, this is also a very effective way.

In general, joining the community and participating in practice is the most effective growth path.

Mercy: How do you feel about Singapore's Token2049 not long ago?

Chen Jian: The overall feeling I got from 2049 this time is that compared with last year, this year I don't seem to see the kind of new track or sector that makes people feel that it is gaining momentum. Last September was exactly the intersection of bull and bear markets, and you could still see a lot of new things at that time. For example, I wrote a short article last year, predicting that the Ton ecosystem would rise. But after thinking about it this year, I feel that everyone is either very mature or in a state of anxiety, and I don’t see any new tracks or sectors that are clearly gaining momentum.

From the perspective of the entire industry, I feel that everyone is quite anxious. Whether it is the primary market or the secondary market, it seems that no money has been made this year. VC seems to have made money on paper, but in fact it has not been put into the pocket. Traders in the secondary market are generally trapped, and project parties are also anxious. Projects that have already listed their coins are waiting to cash out and continue to work, while projects that missed the golden window period in March this year and failed to list on major exchanges are now trying to find ways to issue their coins at the end of the year.

The fundamental reason for this state of anxiety is that the market lacks liquidity and cannot take over. Not only are project parties and VCs anxious, but even institutions that help project parties with marketing are also anxious. I feel that the business that can really help project parties or VCs solve liquidity problems is still making money, and it is making good money. Apart from this, everyone is generally anxious and losing money.

As for hot spots, there are indeed no particularly obvious ones this year. It is difficult to describe the Ethereum ecosystem, and Layer 2 has also become aesthetically fatigued. The Solana ecosystem is very lively, but nothing particularly new has emerged. We are thinking about what Solana's third growth curve will rely on. Some people are discussing concepts such as DePIN, but they are not particularly new.

For the Ton ecosystem, I am personally trying to support some projects. Although I predicted last year that the traffic dividend of the Ton ecosystem would rise, there were still relatively few projects that actually participated. Now I am beginning to change my mind. Through contact with some projects, I found that the traffic quality of the Ton ecosystem seems to have improved. Although there are still a large number of robots and spam accounts, compared with the current rampant infrastructure projects, the Ton ecosystem at least provides an area for users to actually interact and operate.

In general, I think each sector may be in a relatively anxious state now, and they are all looking for their own second or third growth curve.

Second, talk about your views on popular ecosystems such as Ethereum, Solana, and TON

Mercy:As an independent researcher, how do you view the development trend of the Crypto industry in the next one to two years?

Chen Jian: First of all, I want to emphasize that as industry practitioners, we must remain optimistic about Crypto. If you think this industry is going to die, you should leave as soon as possible. This is not only a professional attitude, but also for your own long-term survival in this industry.

From a rational point of view, I think the market will be better next year. The world is releasing money and cutting interest rates. In addition to US stocks, Crypto seems to be a better investment option. But when it comes to the practical level, the current market situation is indeed tangled.  

There are two most frightening points at present: First, Bitcoin is still hovering above $60,000, while altcoins have fallen to a level lower than the bear market. If Bitcoin fluctuates slightly, altcoins may suffer a greater impact. Second, the industry seems to be still dominated by OTC funds. For example, we are paying attention to the inflow and outflow of funds in ETFs every day.  

From the perspective of the primary market, I think the current projects can be divided into two categories. The first category is "almost" projects, that is, the team, track, and valuation are not luxurious or top-level, but not so grassroots. Such projects are in a difficult situation now. I suggest that they give priority to generating income, whether by collecting gas, selling nodes or other means. As long as users can actually interact with the product, they should seize the opportunity to make efforts instead of rushing to issue coins. Maybe you can survive without issuing coins, but once you issue coins, you will die faster.  

The other category is projects with unique advantages, occupying key positions in the track, or with excellent teams and VC backgrounds. If you are optimistic about the market next year, it may be a good choice to issue your own assets "halfway up the mountain" or "at the foot of the mountain". But it should be noted that if your project cannot be listed on a large exchange and does not have the support of top institutions, it may be very bleak if it is listed on a small or medium-sized exchange.  

I would also like to remind everyone, especially retail investors, to pay attention to two types of projects: one is projects that have no revenue-generating model, and the other is projects that have made a lot of money before issuing tokens. The former may only be able to recover by selling coins, and the latter may not necessarily use the money to support the token price, although it seems to have money and pattern.

In general, I think the Crypto industry still has a lot of room for development in the next 1-2 years. But specifically at the operational level, traders need to make choices based on their own risk preferences and judgment of the market. Mercy: Vitalik recently said on Twitter that he will only focus on Layer 2 projects that have reached a certain stage next year. How do you understand the meaning behind this statement? Chen Jian: Vitalik's statement has two main meanings. First, he divides Layer 2 projects into three stages. The highest stage is a completely decentralized Layer 2, including the sorter. This is in line with Ethereum's technical route and concept. Vitalik hopes to guide more Layer 2 projects in this direction in this way. We know that the main way for Layer 2 projects to make money is to earn fees in addition to issuing tokens. These fees are usually earned by the project's own nodes. Faced with such a large interest, it is difficult to require Layer 2 projects to be decentralized. But if Layer 2 is not decentralized, it is inconsistent with the future development direction of Ethereum. So Vitalik hopes to guide Layer 2 towards decentralization in this way.

But I think this goal will be difficult to achieve, mainly for two reasons:

1.  The power of interest groups is too strong. The gas income of top Layer 2 projects such as Base, Arbitrum, and Optimism is very considerable. Especially for projects like Base that do not issue coins, if they do not make money through gas fees, it is equivalent to doing charity.

2.  The development prospects of the Ethereum ecosystem are worrying. Although I personally mainly participate in the Ethereum ecosystem, I have to admit that the performance of Ethereum in this round is disappointing. Many analyses have pointed out the current problems of Ethereum.

Despite this, I still believe that in the long run, Ethereum is still the most decentralized ecosystem with the most decentralized level and spirit. The purpose of the Ethereum Foundation and the entire roadmap are committed to being as open and decentralized as possible. So I think in the long run, Ethereum is still a field that can breed innovation.

For the Layer 2 track, my opinion is: if you are a consumer-oriented application with a large number of users, then issuing your own Layer 2 or application chain is a good choice. In this way, you can not only make money by issuing tokens, but also continue to earn income by charging users gas fees.

But for those platform-level Layer 2 projects, I am no longer interested. I even began to refuse to cooperate or participate in such projects as much as possible.

Mercy: Solana, Ton, Base and other ecosystems are still receiving a lot of attention. In your opinion, what opportunities will exist in these ecosystems?

Chen Jian: Let me expand on them one by one. First, the Ton ecosystem that everyone is concerned about.

I think the Ton ecosystem deserves continued attention. Although its first phase (a large number of invalid interactions to obtain incentives) may have ended, I have recently come into contact with some projects that can really get users involved, and they have shown new development trends. These projects are not only creative, but also combine real social attributes and assetization capabilities. I think the second growth curve of the Ton ecosystem may come from such projects.

The second is the Base ecosystem. The main problem with Base is that although the transaction volume is large, the top projects are still Ethereum native projects, such as Curve, Aave, Uniswap, etc. This is more like the migration of old projects rather than the rise of new projects. Logically, the Base ecosystem does not seem to be prosperous because it has not issued tokens and has not given expectations for issuing coins. But it can generate such high transaction volume and TVL, which is actually very abnormal. This may mean that there are powerful promoters or "conspiracy groups" behind it. If you can integrate into the Base ecosystem, there may be good opportunities. But if you rush in just because of the large transaction volume on Base, you may fall into a misunderstanding.

Finally, let's talk about the Solana ecosystem. Although I personally mainly participate in the Ethereum ecosystem, I am not opposed to Solana's secondary market transactions. Last September, I wrote an article analyzing why I chose to buy Solana when the price was $18. But from the perspective of the primary market, there may not be many opportunities to participate in the Solana ecosystem now. We can see that there are many new projects emerging in the Solana ecosystem recently, but almost all the founders have Solana background, which means that the ecosystem has formed a relatively closed cycle, and it is difficult for entrepreneurs or investors outside the ecosystem to intervene.

In general, these ecosystems have their own unique opportunities and risks. As an entrepreneur or investor, the key is to choose the right ecosystem to participate in based on your own strengths and judgment. At the same time, you must always be vigilant, do a good job of risk management, and exit in time when appropriate.

Three, talk about the product experience and suggestions of OKX 

Mercy: The Web3industry has been looking forward to the next big explosion. From your perspective as an independent researcher, what role will OKXplay in this process?

Chen Jian: First of all, I want to state that this is definitely not a good thing because this is OKX's occasion. I do think OKX is a very solid exchange. Through communication with OKX employees, I deeply felt their love for the company, which stems from their belief that they are making some substantial contributions to the industry.

One of the best examples is the OKX Web3 wallet. Since using this wallet, I almost no longer use other DEX or Swap tools when buying projects on the chain. The user experience of the OKX Web3 wallet is very smooth. I have several friends working in the OKX Web3 wallet team, and they respond to user feedback very promptly.

As far as I know, OKX has invested a lot of manpower costs to polish this wallet product, and currently this wallet is non-profit, and users will not be charged extra for interacting with it. This determination and courage is admirable. In addition, the OKX wallet is also exporting technical solutions to other exchanges, which indicates that OKX is at the forefront of the transformation from "exchange to wallet" and "Web2 to Web3".  

Of course, returning to the exchange itself, we also hope that OKX can continue to work hard on core businesses such as trading depth, new coin listings and mining activities. But in terms of product strength, OKX is undoubtedly very competitive.  

As for how to attract new users, I think there are two levels: one is to allow users to own assets on the chain, and the other is to allow users to interact and trade on the exchange. OKX has opportunities in both aspects. Especially in the scenario-based application, if there can be a project like STEPN that can attract new users and bring transactions, OKX's previous investment and product accumulation will have the opportunity to take on this wave of traffic.  

In general, I think exchanges should not only focus on trading, but should invest energy in some future-oriented reserve work, even some seemingly unprofitable public products. OKX has done a good job in this regard.  

Mercy: Do you have any suggestions for OKX's future technology development or product experience? 

Chen Jian: OKX's products, especially the Web3 wallet, have done quite well, and the user experience is very smooth.  

But for the exchange itself, I hope OKX can continue to work hard in terms of trading depth, new coin listings and mining activities to improve its competitiveness in its core business.

In addition, I think OKX can consider further expanding into the payment field. If it can launch a product similar to Visa cards, allowing users to directly use the funds in their exchange accounts for daily consumption, it will greatly increase user stickiness. This will not only allow users to regard OKX as a trading tool, but also a payment solution in daily life.  

In general, if OKX can achieve the goal of allowing users to directly use the funds in the exchange for daily consumption, rather than just using the exchange as a tool to observe the market, it will be a very promising development direction.

Risk Warning and Disclaimer 

This article is for reference only. This article only represents the author's views and does not represent the position of OKX. This article is not intended to provide (i) investment advice or investment recommendations; (ii) an offer or solicitation to buy, sell or hold digital assets; (iii) financial, accounting, legal or tax advice. We do not guarantee the accuracy, completeness or usefulness of such information. Holding digital assets (including stablecoins and NFTs) involves high risks and may fluctuate significantly. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. Please consult your legal/tax/investment professional for your specific situation. Please be responsible for understanding and complying with local applicable laws and regulations.