Author: Wu Says Blockchain

In this interview, Han Lin, the founder of Gate Exchange, shared his entrepreneurial journey, platform strategy evolution, and industry insights with Colin, the founder of Wu Says. After graduating with a PhD in Optoelectronics in Canada, Han Lin returned to China to start a business. In 2013, he attempted to purchase 100 bitcoins and was scammed, losing $2,000. In the early years of his startup, he completed almost all development work independently; although compliance has high short-term costs and low returns, it is necessary in the long run; he is very interested in the Hong Kong market and is considering rearranging applications for relevant licenses; he is investing in related fields, such as supporting chip companies that utilize ZK technology to enhance computing efficiency; the company's asset reserves are mainly in Bitcoin and Ethereum; there are currently no obvious cyclical patterns, and he is relatively optimistic about this year's trends; most of his time is still spent on technology and products; the corporate culture is pragmatic and innovative, hoping everyone remains grounded, not too impetuous, and not always looking for shortcuts or ways to overtake.

PhD in Optoelectronics from Canada, scammed when first encountering Bitcoin

Colin: I remember you initially studied at Shandong University for both your bachelor's and master's degrees, and then pursued a PhD in Canada. What was your major?

Han Lin: I studied electronics; my undergraduate major was Electronic Science and Technology. I was later recommended to pursue graduate studies and then went to Canada for a PhD in Optoelectronics.

Colin: Did you start your entrepreneurial journey right after graduating?

Han Lin: After graduating, I did a postdoc in Canada for a year before returning to China to start a business. At that time, I had some research results that I thought could be applied in the industry, so I founded a company to develop optoelectronic simulation software, later shifting to high-performance computing.

Colin: What prompted you to enter the virtual asset industry? There are reports mentioning that you were scammed early on?

Han Lin: While working in high-performance computing, I needed to use graphics cards and found that many people were using them to mine Bitcoin, so I began researching the Bitcoin white paper. Due to my technical background, I quickly understood the technical value of Bitcoin and developed a strong personal interest. Later, when I tried to purchase Bitcoin on forums (like Bitcointalk), I was scammed and lost about $2,000.

Colin: At that time, how much was over 100 bitcoins worth?

Han Lin: The total price was about 3,000 Canadian dollars (equivalent to over $2,000).

Shifting from chips to exchanges: Heavy asset models are limited, trading platforms are light assets and self-controllable

Colin: You have an electronics background; did you also participate in mining? Why didn’t you continue to develop in the mining or chip field?

Han Lin: I did participate in chip design and mining machine manufacturing. In 2013, we purchased a batch of Avalon chips and attempted to design mining machines, but later realized the issues in the chip industry: the heavy asset model is greatly restricted by the supply chain, with long procurement and production cycles and high uncertainty. In contrast, trading platforms operate on a light asset model, where all processes (like wallet deployment, trading systems, deposit and withdrawal functions) can be implemented through software, allowing for greater autonomy. Therefore, I shifted my focus to trading platforms.

Colin: When was the Gate trading platform officially launched?

Han Lin: It was officially launched in April 2013. At that time, there were very few trading platforms globally, mainly concentrated in Taiwan, Japan (like Mt. Gox), and Russia (like BTC-e). There were very few teams in mainland China; I remember only BitChina.

Colin: What was the reason for Gate's rebranding in 2017? Was it related to regulatory policies?

Han Lin: In 2013, domestic policies were relatively friendly, and CCTV reported on Bitcoin payment scenarios (like buying coffee and clothes). However, as the price of Bitcoin rose from $20-30 at the beginning of the year to over $1,000 by the end of the year, regulatory policies tightened. Therefore, we moved our entity overseas and began global operations.

Spot-first strategy: Early bets on innovative assets, cautious advancement of contract business due to risk

Colin: Gate is characterized by its strong spot business, while the contract business is not a focus compared to other exchanges. How is the overall strategy considered?

Han Lin: This is related to historical background. When we initially built the trading platform, I personally preferred new technologies, so we launched a large number of innovative assets. For example, in 2013, we were the first to list "Dogecoin" and other innovative varieties; at that time, there were almost no platforms as aggressive as we were globally. This strategy formed our cultural advantage—selecting quality assets through keen insight. For instance, during the DeFi Summer in 2020, we were the first to list DeFi projects (like Uni), while most people had not yet realized the value of such assets.

Today, the importance of DeFi assets is widely recognized, but we had already begun promoting them early on. Last year, many breakout projects (like Pepe and other meme coins) were also listed by us first. As for the contract business, we have always been cautious due to its high leverage risk and the potential for liquidation. Although contracts are hedging tools with clear demand, we prioritize user safety. It was only in recent years, as contract trading volume surged (now 5-6 times that of spot), that we began to increase our investment.

Controversy over listing quality: Acknowledging the difficulty of selection, emphasizing user education and risk control systems

Colin: Gate does have a large number of listed coins, but does the high quantity lead to varying quality? The community sometimes questions whether certain projects may have "data盘" issues. What do you think?

Han Lin: Selecting quality assets is indeed very difficult; almost no platform can completely solve this problem. We have always selected assets with keen insight; for example, during the DeFi Summer, we quickly listed SushiSwap (SUSHI), while other platforms were relatively conservative. After SUSHI was listed, it rose from $1 to over $10 in ten days, and only then did other major platforms follow suit.

I admit that selecting assets is a highly challenging task, but we have a risk control system in place to select quality projects as much as possible. At the same time, we cannot make decisions for users entirely. Experienced users usually have their own judgments, and we encourage them to conduct independent analysis before investing, assessing the prospects and risks of projects. Therefore, we have invested a lot of effort in user education to help users improve their discernment.

Responding to on-chain asset competition: Balancing safety with early opportunities

Colin: In recent years, on-chain trading has posed increasing competition to centralized exchanges. In the past, platforms created wealth effects by listing very early, but now this effect seems to have shifted to on-chain. How do you view and respond to this trend?

Han Lin: This issue is very critical. Early users could indeed gain wealth effects by selecting assets through centralized exchanges. However, now more assets are issued directly on-chain, with about 10,000 to 20,000 new tokens born every day, totaling over 15 million. While there are early opportunities on-chain, it is very difficult for ordinary users to filter quality assets.

Experienced players can manage their wallets and protect their assets, but ordinary users find it hard to do so. Additionally, the quality of on-chain assets varies greatly, with many projects disappearing within hours, making the filtering cost extremely high. Therefore, we launched products like Winbox to establish an innovation zone, re-selecting quality projects from on-chain assets. Compared to the listing standards of centralized exchanges, Winbox's rules are slightly more relaxed, but we still use technical means like smart contract detection to exclude high-risk projects and ensure user safety.

For example, we discovered Trump-related meme coins and other projects through this method. After these projects were issued on-chain, we quickly listed them on our platform to help users capture early opportunities.

Independently completed development work in the first one or two years

Colin: You mentioned that you developed the entire website by yourself in the early days. Were you starting your business in a residential house at that time?

Han Lin: At that time, there were very few people who understood blockchain development, so I had to teach myself. Because I had a technical background, after studying the Bitcoin white paper and wallet code, I quickly mastered the relevant technology and began writing the trading platform code.

Colin: How long did you develop it by yourself? Do you still write code now?

Han Lin: Now I mainly participate in core architecture discussions. In the early one or two years, I almost completed all development work independently, and later gradually cultivated a team to share the tasks.

Colin: In the early Bitcoin or cryptocurrency circles, which people were you familiar with?

Han Lin: I was more focused on technology and didn’t interact much with OGs in the early days. Later, I got to know some early entrants in the industry, but at that time they were in Beijing while I was in Jinan focusing on development.

Why increase compliance investment and market exposure in 2023

Colin: Last year, I felt that Gate's strategy underwent a significant shift. In the past, you were relatively low-key and focused on your own development, but last year there were significant changes in compliance and market exposure. What prompted this shift in thinking?

Han Lin: Your observation is very accurate. At the beginning of last year, we indeed made a strategic adjustment. Previously, we had been focused on technology and products, but later realized that relying solely on these was not enough. Users might misunderstand us or even distrust us due to some rumors or false information. For example, in 2020, we called for the industry to pay attention to reserve issues, but many people did not understand. Long-time users (who have followed us since 2013) have a high level of trust in us, but new users have limited awareness of Gate.

Therefore, we decided to showcase ourselves more, enhancing user trust through brand building and market activities. We began to increase brand exposure, strengthen interactions with the community and industry partners, sponsor teams, hold concerts, and other activities. These initiatives helped more people understand Gate's values and strengths.

Colin: Your personal Twitter has also become more active, and Gate has sponsored many events, such as team collaborations. This kind of investment is hard to see direct returns from; how do you weigh it?

Han Lin: I used to think that such investments were difficult to quantify in returns, especially as someone with a technical background, I was more accustomed to looking at data and concrete results. But later I realized that brand building needs to attract attention and let users know who we are and what we do. For example, collaborations with Inter Milan, the F1 Red Bull Racing team, and music festivals have allowed more people to recognize Gate. Although these endorsements and exposures are difficult to quantify directly, the improvement in brand trust is significant.

The cost of compliance: High short-term costs, but long-term potential in markets like Japan

Colin: Over the past year, Gate has taken many actions regarding compliance, but compliance may mean withdrawing from some offshore markets, such as Japan. Is this a dilemma? Will it sacrifice short-term profits?

Han Lin: It does require sacrificing short-term profits, but we value long-term benefits more. I entered this industry in 2012 and witnessed its rapid development. In 2013, there were only about 1 million global users, and now there are over 500-600 million. Although compliance has high short-term costs and low returns, it is necessary in the long run.

Our group has invested in compliance for many years, applying for licenses and making compliance arrangements in countries and regions such as Europe (like Malta), the Middle East, Asia, and the Americas. Last year, we acquired related businesses in Japan (cryptocurrency service providers) and communicated with local regulatory authorities to clean up user data to meet compliance requirements. The Japanese market has huge potential, with a population of 120 million and strong user investment demand, occupying an important position in global asset markets like foreign exchange and stocks.

Colin: Will compliance bring short-term financial pressure to the company?

Han Lin: The pressure is indeed significant, mainly reflected in labor costs and infrastructure investment. The demand for compliance personnel and security personnel has increased, and processes like wallet storage, KYC (Know Your Customer), and KYT (Know Your Transaction) also need to be managed separately. These basic expenses are very high.

Colin: You have also spent a lot of time in Hong Kong recently. Are you particularly focused on the Hong Kong market?

Han Lin: Hong Kong has a superior geographical location, serving as a financial center where East meets West, with frequent trade and capital inflow and outflow activities. We are very interested in the Hong Kong market and are considering rearranging applications for relevant licenses.

Colin: Is the progress going smoothly at the moment?

Han Lin: We encountered some difficulties when initially applying for licenses, as the regulatory authorities were quite strict. However, this year the Securities and Futures Commission has proposed a new roadmap, showing a more open and pragmatic attitude. They are beginning to gain a deeper understanding of the industry and gradually relax restrictions, which is a positive signal for us (referring to Gate.HK).

Technological Focus: Blockchain Scalability and Efficiency Cost Optimization

Colin: As someone with a technical background, how do you view the development of blockchain technology? Which technological routes or ecological technologies do you currently recognize?

Han Lin: We have always focused on technologies related to ecology, especially scalability technologies at the blockchain layer. Currently, the capacity of blockchain is limited, but as the user base grows and industry applications expand (such as payments, cross-border e-commerce, online gaming, NFTs, etc.), the demand is increasing. The existing throughput, transaction speed, and costs are difficult to meet the demand, so scalability technology is an urgent issue that needs to be addressed.

The emergence of new technologies like Layer 2 and Layer 3 has indeed brought significant improvements, but there is still much room for optimization. We pay close attention to these technologies because if the underlying technology is well-developed, building upper-level facilities (like trading and payment systems) will be easier and can better integrate with traditional markets, making it easier to promote real-world applications. However, the costs are still relatively high at present.

Colin: Which scalability technology do you think performs better currently?

Han Lin: Optimistic Rollup is currently the most widely used solution, but zero-knowledge proof (ZK) technology is also receiving a lot of attention. ZK has advantages in speed and experience, but the costs are high. We are investing in related fields, such as supporting chip companies that utilize ZK technology to enhance computing efficiency. These issues will gradually be resolved in the future.

Colin: What do you think of solutions like Solana that improve speed by sacrificing a certain degree of centralization?

Han Lin: Such solutions are indeed efficient and can quickly solve problems, but people will also consider whether a higher degree of centralization might bring security issues. After all, it is not that decentralized.

For many applications, high costs are the main issue, and reducing expenses is a priority goal. If the application scenario does not have high requirements for asset security or does not require long-term asset storage, then such solutions are feasible. For example, Memecoins are very suitable for running on Solana. However, for mainstream asset storage, users may prefer to choose more solid chains, like Bitcoin and Ethereum.

Forecasting the Meme Coin Craze: Community-Driven + Celebrity Effect Promoting Breakout, Potentially Becoming a Cultural Phenomenon in the Long Term

Colin: Speaking of Memecoins, do you think the current craze for Memecoins is a short-term phenomenon, or will it become a long-term cultural phenomenon in the industry?

Han Lin: Initially, Memecoins were just a flash in the pan. At the end of 2013, Dogecoin appeared, which was cloned from Bitcoin's code, featuring a Shiba Inu as its logo. At that time, we referred to it as "Dogecoin," which was the earliest prototype of a Memecoin. Many similar coins emerged then, but most disappeared, with only a few surviving.

The early craze for Memecoins quickly passed, but the situation is different now. Memecoins have become a community-driven phenomenon; as long as people like them and reach a consensus, a coin can be issued. This is especially evident this year, as celebrities have also started issuing coins. Even those who are not in the crypto space can issue coins as long as they have fans. In the past two years, some celebrities began trying to issue coins, but they had many concerns, such as whether it would damage their reputation or involve legal issues. After Trump issued a coin this year, these issues seem to have been resolved, and many people have started to feel relieved, thinking, "I can also issue a coin."

Colin: Can you share your personal asset allocation? Is it mainly in Bitcoin?

Han Lin: I personally don't have much time to think about asset allocation; it's mainly related to the company's assets.

Colin: What about the company's asset allocation? Is it mainly in stablecoins and cash?

Han Lin: The company needs to operate stably, so we adopt a low-risk allocation, mainly in Bitcoin and Ethereum. Additionally, platform tokens also need to be securely stored.

Industry Cycle Outlook: Bitcoin Halving Impact Weakens, Traditional Finance and Geopolitics Become Key Variables

Colin: Having experienced multiple industry cycles, how do you view the current market stage? Will the bull market continue this year, or are there signs of a bear market?

Han Lin: In the past, people often said that bull markets occur every four years, related to the Bitcoin halving cycle. At that time, the crypto space was small and not much affected by external factors; industry development mainly relied on internal events. For example, during Bitcoin halving, market discussions were heated, easily triggering a bull market. But now the situation is different; the connection between cryptocurrencies and traditional finance is becoming increasingly close, and the influence of traditional financial markets is significant. Even geopolitical events (like the outbreak of war) can lead to severe market fluctuations.

I feel that there are no obvious cyclical patterns now. From the end of 2013 when the market began to heat up, to 2022 and 2023, the market has been very volatile. Many people feel that the bull market may have ended, but in reality, the market has gradually warmed up again without anyone noticing. From last year to this year, we feel that the market is still quite good.

Colin: Is your company relatively optimistic about this year's and future trends as well?

Han Lin: Yes, we are relatively optimistic. There are several main reasons: First, the craze for Memecoins is still continuing to ferment. Although the initial hype may have decreased, it is gradually shifting towards a broader movement, with more celebrities starting to participate in issuing coins.

Another important point is that after Trump came to power, he encouraged Bitcoin to be used as a reserve asset for the United States. Other countries may follow suit. Bitcoin has very good characteristics, with a fixed total supply (21 million coins) and no additional issuance except for mining output. This scarcity makes it a quality reserve asset. More and more countries and enterprises may adopt Bitcoin as a reserve asset, which will drive up its price. If other countries do not do this, the future costs in the financial sector will be very high. So I believe this trend will continue, and the market is still relatively optimistic.

Colin: This cycle seems a bit like "The Emperor's New Clothes." Has the evaluation of VC-backed tokens become stricter?

Han Lin: The main change is in the form of issuing tokens; now communities can issue tokens directly without needing VC participation. Previously, projects needed to go through multiple rounds of financing, with VCs playing an important role, ultimately bringing tokens to retail investors through IEOs. But now communities can issue tokens directly, bypassing the middlemen, which has weakened the role of VCs.

However, there are still many good projects that VCs invest in, especially those that require long development cycles. These projects cannot be completed overnight; they need time and patience, and VCs can still play an important role in this process.

Colin: Finally, I would like to know, what areas do you mainly oversee in your work? Where do you spend the most time?

Han Lin: I still spend most of my time on technology and products because I believe this is the foundation. Although we also engage in brand sponsorship and marketing, without technology and products, everything is just a castle in the air.

Technical Barriers of Exchanges: Underlying Security, Multi-Chain Support, and Ecological Service Construction Create High Thresholds

Colin: There has been a viewpoint that the technical barriers of centralized exchanges are very high now, making it difficult for new entrants to imitate or quickly replicate. There are also some service providers that specialize in providing cloud technology. What do you think?

Han Lin: Yes, the technical barriers of exchanges are indeed very deep. This is mainly reflected in two aspects: First, the underlying technology needs to be very solid, especially in terms of asset protection. To support multiple currencies and blockchains requires a significant investment; for example, we have thousands of servers to support these chains and data collection. This itself is a very high threshold.

Second, there is the complexity of upper-level ecological services. Exchanges are traffic entry points, and once users come in, they need various services, such as spot trading, wealth management, copy trading, quantitative trading, etc. All of these require substantial technical investment, creating both deep and broad thresholds. The team size of centralized exchanges is usually very large, with thousands of people being the norm, while some projects may only need a dozen people or even just one person to operate.

Colin: As someone with a technical background, do you envy those small and agile projects? For example, some DeFi projects can generate high profits with just a dozen people. Do you feel that your current work is tiring and envy them instead?

Han Lin: I do envy them, but I think this is the advantage of decentralized technology. Blockchain technology solves many problems, such as asset security and transaction confirmation, without the need for centralized institutions to intervene. So you see, many people say that the trading volume of centralized exchanges (CEX) is shifting to decentralized exchanges (DEX). We are also exploring in the Web3 field, adopting whichever side has the technological advantage, and we will not stagnate.

Core of Corporate Culture: Pragmatically Solve Real Problems, Oppose Impetuosity and Repeating the Wheel

Colin: Finally, what do you think is the most important value of Gate? Or, what corporate culture do you most recognize and hope employees can unify around?

Han Lin: I hope everyone remains grounded and not too impetuous. Do not always think about taking shortcuts or overtaking on curves; such things should never be mentioned. We should still do things earnestly and truly solve problems, especially those that others cannot solve. Only in this way will users recognize you, and the market will need you.

Additionally, do not reinvent the wheel. The corporate culture we encourage is pragmatic and innovative, not doing useless work.

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