As the first major event attended domestically this year, and also the first time I’m writing from the perspective of a VC, let me explain why I sum up my conference experience with three “Ponzi” references. Also, I want to clarify that this article represents my personal views only, with no financial advice.

Industry Insights

VCs are one of the key indicators for judging industry tracks

Whenever I mention being a researcher at a VC during conversations, people invariably ask one question: “Which tracks have you been bullish on lately?”

This indirectly emphasizes the significant position of VCs in the eyes of many. They use the viewpoints of major VCs as one of the standards to judge whether their opinions are correct. After all, it’s a simple principle: where there’s hot money, there’s the mainstream market. Even if sector rotation exists, it’s just the movement of funds between different sectors.

The Bitcoin ecosystem is still in a state of chaos

There’s no denying that, at present, the Bitcoin ecosystem is one of the hottest tracks. However, I prefer to liken the current development of the Bitcoin ecosystem to the chaotic state at the beginning of the universe according to Chinese mythology of “Pangu separates heaven and earth”.

Firstly, because the current Bitcoin ecosystem is still mainly dominated by various asset protocols, with few projects implemented. Most of the discussions are nothing but still narratives.

Secondly, another mainstream narrative is the competition in BTC L2, which is in the stage of competing against each other. One interesting phenomenon we can observe is the development of BTC L2 projects split into two factions: one focuses on generating traffic before infrastructure, while the other prioritizes infrastructure before traffic. This is akin to the relationship between the tourism industry and urban infrastructure. Therefore, who will ultimately prevail is worth observing.

Lastly, I believe that Merlin Chain has gained significant influence in representing the current BTC L2 track. After attracting huge traffic and users through various growth measures in the early stages, what measures will it take next to lock in liquidity and retain users? Will there be any meaningful ecological projects? The choices made by Merlin Chain and its subsequent outcome, as well as whether there is indeed demand for BTC L2, are all worth reflecting on and learning from.

Depin and AI are the two most mentioned tracks

Different from the current Bitcoin ecosystem, almost all Chinese-speaking communities are playing. Depin and AI are two tracks that both the Chinese-speaking community and overseas are paying attention to. They are also two tracks that are of real practical significance and are easier to implement. Depin solves the problem of waste of idle resources and useless small and micro resources. AI helps improve efficiency by reducing repetitive work and meaningless work, etc.

Depin makes Web3, which was originally invisible and intangible, concrete by combining it with real-world devices. As a hot industry in the past two years, AI’s combination with blockchain is natural. Depin + AI is more suitable. Depin helps solve AI’s computing power, data, storage and other problems. AI uses Depin equipment to conduct various attempts, such as model training, data labeling, AI Agent, etc.

KOL > VC or VC > KOL

Recently, we often hear a voice: there are more and more KOL rounds in project financing, and the advantages of KOL rounds are even greater than those of VC rounds, such as low valuations, short unlocking cycles, etc.

For this, we need to realize that VC is essentially a service industry. What they consider is how to maximize returns for the LPs behind them. Therefore, the relationship between KOL and VC is like the relationship between a flexible and free guerrilla and a well-trained armies. A good VC will form its own set of investment logic internally, and adjust its own investment strategy and corresponding post-investment work based on this logic.

At the same time, a good investment actually pays more attention to the effect of post-investment work, how to help the project avoid detours, step on the right trends, and how to release related benefits, etc. It is by no means what everyone imagines: giving some money and calling for orders. That’s it. These jobs have very high requirements for investors’ abilities.

Therefore, I believe everyone has already made a judgment about whether KOL > VC or VC > KOL.

The market is currently in a meme phase

As mentioned earlier, I summarized my thoughts on this conference as “Ponzi, Ponzi, Ponzi”. It is more out of my understanding of the current market state, which is currently in a meme stage, that is, hyping narratives and expectations.

The recent hot tracks mainly include Bitcoin ecology, Depin, and AI. However, if we look beyond the surface, we will find that most projects are actually just hype stories, inflating people’s expectations for the future of the tracks, with very few actually materializing. Of course, this phenomenon is not unique to mainstream tracks.

Here are some simple examples: why is Merlin Chain so hot right now? Is it because of the wealth effect, the good ecosystem on Merlin Chain, or the hype surrounding BTC L2? As for the decentralized computing power project in Depin, how many real-world devices are actually connected, how much computing power is utilized by each device, whether it truly helps the real world, whether anyone will use this computing power, or is it just talk? Regarding AI model training, how much has been put into use, how much help does it provide, is it indispensable, or is it optional?

Of course, these are all normal phenomena. The development of an ecosystem in a track is inevitably a long-term process, and it is impossible to achieve everything in one step. What we want to emphasize here is that we should recognize the stage we are currently in and what we should do at what time is something we should think about.

Life in Hong Kong

Indispensable banknotes

While WeChat and Alipay are now available in the Mainland, banknotes are still a must-have for traveling in Hong Kong. Although Octopus Cards can make most payments, there are still some buses or restaurants that only accept cash, and to top up Octopus Card, you only use banknotes.

Advanced “LEGO” Builder

Although I’m from Guangdong, this is my first time in Hong Kong. The architectural structure in Hong Kong is about maximizing the use of idle resources in a small space. The distance between buildings is so short that it’s possible for neighbors from two different apartments to pass things to each other by simply opening their windows. Apart from major intersections, there are more minor intersections with short distances between them. Many footbridges are designed to directly connect buildings. These observations make me understand what people often say about living in Hong Kong—it feels so oppressive that there’s always a sense of being suffocated while walking on the streets.

Other Observations:

Here are some small details I observed while on the road:

• Unlike mainland China, Hong Kong’s intersections are marked on the ground with large fonts indicating the direction of traffic flow (Look Left/Look Right), and there are also signs for blind pedestrians at pedestrian crossings with traffic lights.
• Convenient elevators are installed at the entrances and exits of subway stairs (not separate elevators, but ones attached to the handrails of the stairs) for people with mobility issues. I haven’t seen this in mainland China, and I feel this design has low utilization.
• On weekends, you can see many domestic helpers sitting on footbridges or open spaces, chatting and resting.
• The city environment is quite good, with hardly any litter seen on the ground. However, I rarely see trash bins on the streets either.

Personal reflections

This conference feels noticeably less crowded compared to last year’s Singapore 2049, and most of the projects at the venue are Chinese projects, with few overseas projects. At the same time, there are fewer people attending various sessions, and everyone is starting to realize that high-quality information at conferences is always scarce, and only the smaller gatherings are where the real discussions take place.

Coming to the conference this year, I can feel that I am somewhat different from last year. From being a novice last year to now being more knowledgeable, it also shows that my efforts have not been in vain. Personally, I feel quite fortunate to have received guidance and teachings from many predecessors along the way.

However, there is still a long way to go. Since joining VC, I have deeply felt that investment is a field that requires a lot of knowledge and flexibility. It not only requires a full understanding of history and the current state of the industry but also involves anticipating future trends and developments. Knowing when to do what sounds simple, but it’s not easy to execute. It can be said that success or failure hinges on this decision. What I currently lack the most is the integration of knowledge and action. I am not sensitive enough to market changes, and my actions are not consistently carried out. Moreover, my control over the secondary market needs improvement. In these aspects, I need to practice more, reflect more, and find my own strategy as soon as possible. At least now I can clearly say that I am not cut out for short-term trading, haha.

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