Written by: Wu Says Blockchain

The content of this article reflects the personal views of the interviewee and does not constitute any investment or financial advice. Readers are advised to strictly comply with the laws and regulations of their respective locations.

In this episode of the Wu Says podcast, we have a conversation with Lin Han, the founder of Gate, focusing on topics such as the cryptocurrency market cycle, the impact of the U.S. stock market and macroeconomics, the AI bubble controversy, privacy tracks, compliance regulation, the PoR mechanism of exchanges, the rise of Perp DEX, stablecoin competition, market making and manipulation, the difficulty of entrepreneurship in the industry, and Gate's strategic layout.

Lin Han believes that while the current market is volatile, it is unlikely to return to the previous bear market. Macroeconomic factors and liquidity policies will continue to influence market conditions; AI is still in its early growth stage and should not be simply viewed as a bubble; user behavior in Web3 is significantly migrating on-chain; privacy and zero-knowledge proofs will become important infrastructure in the future; regulatory intervention in CEX and DeFi will gradually deepen; the explosion of Perp DEX is due to mature infrastructure, reduced costs, and strengthened incentive mechanisms, and in the future, CEX will fully layout; the stablecoin sector will show a long-term Matthew effect; phenomena like DAT and market manipulation exist but are limited in scope; Gate will continue to strengthen compliance efforts, Web3 layout, infrastructure investment, and maintain a long-term stable talent strategy and working methods.

The content reflects the personal views of the guest and does not represent the views of Wu Says. The audio transcription was completed by GPT and may contain errors. Please listen to the complete audio and video on platforms like Xiaoyuzhou and YT.

Has the bear market arrived?

Colin: The overall market environment has reached a turning point, and many people have questions about the so-called bull-bear transition: some believe a bear market is coming, while others think that because the AI industry is still rapidly developing, AI might drive the U.S. stock market, thereby pushing risk assets to continue rising. It seems everyone is at a turning point, uncertain of the direction. Based on your years of experience, could you share your thoughts on the current market situation?

Lin Han: We have experienced too many bull-bear transitions. We have been running an exchange for nearly 13 years. The crypto community often talks about a four-year cycle (Bitcoin halving), but from my observations, it is not necessarily the case; there is no inherent rule. In the early days, the crypto market was very small and indeed heavily influenced by BTC halving. Before each halving, everyone would FOMO in advance, expecting that after the halving, the output would decrease and selling pressure would lessen, leading to price increases. So, at that time, the halving had a significant impact on the market. But now it’s different; most Bitcoin has already been mined, and the new additions from halving are very limited, with minimal impact.

Moreover, the crypto market has now integrated into the global macroeconomy and is no longer a self-circulating small circle, so it is more affected by the U.S. stock market and the global economy. The bull-bear cycle seems more like a part of the macro cycle rather than being driven solely by the crypto market itself.

Looking back at the last significant bull-bear switch, it was around the DeFi Summer of 2020, which was driven internally by the industry. But after the pandemic in 2022, the global economy was impacted, and the crypto market quickly cooled down. At that time, even internet giants and Web3 companies began to lay off employees, and the entire economy suddenly cooled.

2022 and 2023 were relatively cold until the end of 2023 when the market began to heat up again due to ETF promotion and economic recovery. 2024 is expected to be very active, and early 2025 will also be prosperous, with BTC prices breaking through $100,000 to set new highs. Then, with Trump’s return to power, further economic recovery is expected. This year’s overall performance is not bad compared to 2024, with decent economic growth. From June to October, the industry maintained a high level, and although reports in November indicated that trading volume fell to its lowest point since June, our platform data shows that the decline was not significant, and it is much better compared to the bear market period.

So I believe it is now difficult to suddenly enter a severe crash or deep bear market like before. Even if it drops from $100,000 to $80,000 or $90,000, that price is still considered high.

From a more macro perspective, the U.S. economy is still performing well, and the U.S. stock market is strong. Many opinions suggest that new quantitative easing and large-scale capital injections may occur in December or next year, which could weaken the dollar and benefit asset prices overall, including stocks and crypto assets, and the market has already anticipated this.

Is the foreseeable future optimistic?

Colin: So your internal judgment suggests that in the foreseeable future, including the first quarter and first half of next year, due to monetary easing policies, the market is likely to remain relatively optimistic, right?

Lin Han: Yes. However, there is a risk point: some people are concerned about whether AI will become a bubble and whether there will be a bubble burst next year. Especially this year, everyone is investing heavily in AI infrastructure, building data centers and computing clusters, and these investments are substantial. But will this demand continue next year? Because the large companies currently building AI infrastructure have not yet shown significant profits.

Aside from companies like Nvidia that are doing well in the underlying infrastructure, other companies engaged in large-scale infrastructure have not seen clear profits, including OpenAI's profitability, which has not yet materialized. With such huge investments, it naturally raises the question, "Is this a bubble?" Just like the internet bubble back in the day, where there was massive investment but insufficient application. However, from the current perspective, the actual role of AI is indeed very evident.

Colin: I saw that the CEO of Alibaba recently refuted the "AI bubble theory," believing that there will be no bubble in AI in the next three years. Do you think the bubble is already significant now, or is it not really a bubble?

Lin Han: I think when a new thing emerges, people will inevitably have very high expectations for it, believing it will change humanity and the future. The higher the expectations, the more concentrated the short-term investments will be, which in turn will drive up valuations. This is very normal. But I do not think this necessarily constitutes a bubble. Even if a correction occurs, it is essential to see whether these applications will genuinely enter the market and whether they will be widely accepted by users. If they are accepted later, it cannot be called a bubble; but during the development process, some parts may indeed become bubble-like.

For example, a familiar case in the crypto space is the surge of NFTs from 2022 to 2023, which even extended into the Web2 domain. Facebook changed its name to Meta to pursue the Metaverse. At that time, people believed that the pandemic created a demand for remote work, which would change lifestyles through VR and the virtual world. But in the end, it did not meet expectations, so that wave can be seen as a bubble.

But now AI is clearly different. The actual applications of AI are numerous. Previously, people thought it would replace search engines, but now search engines themselves are fully embracing AI. Many search results are summarized by AI, saving a lot of time. Moreover, with the advancement of AI, humanoid robots and intelligent assistance systems will increasingly be applied in production and daily life, which are very practical needs.

What do you think about the 1011 crash event?

Colin: You mentioned earlier that the industry was in good shape from June to October, but many believe the turning point was the so-called 1011 event. Do you think this event had a significant impact on the industry? From the results, it seems that although the subsequent liquidation volume reached a historical high, the market did not react significantly. As an observer from an exchange, I feel the same way. What do you think? Did it have any significant impact on the industry?

Lin Han: I think the impact is actually not significant. The reason is that from the current data, although prices did drop by 20% to 30%, and Bitcoin's market cap shrank accordingly, if we look at the overall market cap of stablecoins: at the beginning of the year, it was about $200 billion, and today it is close to $300 billion, with almost no significant contraction in stablecoin market cap during this round of decline.

This indicates that people are merely converting assets from volatile assets to stablecoins for the time being, rather than exiting the market. Once the right opportunity arises, this portion of funds will quickly flow back in. So I believe this is the core reason why this event had a limited overall impact on the industry.

Additionally, Bitcoin's current price of $80,000 to $90,000 is not considered low. Looking back over the past two years, starting from just over $20,000 in mid-2023 to now having increased four to five times, this is already quite remarkable compared to traditional stock markets or other assets. Therefore, even after this correction, it remains in a relatively high range.

PoR reserve proof after the FTX incident

Colin: Although this round of market fluctuations has been intense, no exchange has gone bankrupt or run away. This naturally brings to mind the wave of FTX's bankruptcy. At that time, Gate emphasized early on that it was implementing PoR reserve proof. From my personal perspective, FTX's bankruptcy forced exchanges in the entire industry to adopt stricter PoR to prove "no misappropriation of user assets," which is a significant advancement for the industry. What do you think? Is there still room for improvement in PoR now?

Lin Han: I think the point you raised is very critical, and we have thought about it repeatedly. Why? Because back in 2020, we were one of the first exchanges to use Merkle trees for reserve proof. At that time, we had not yet incorporated technologies like zero-knowledge proofs, so our approach was to hire one of the top accounting firms in the U.S. to help us with reserve proof. They could see our internal data and the on-chain data, then issue a verification report to users and publish our audit results on their own website. We had already started doing reserve proof back then.

Later, we open-sourced this system, making the code available to encourage others to use it as well. We repeatedly called on other exchanges to implement reserve proof, but almost no exchanges followed suit. I don’t know if you remember, but at that time, hardly anyone was willing to take the initiative to do this.

It wasn't until the FTX incident exploded that everyone, under public opinion and user pressure, was forced to start implementing PoR. But from the perspective of the long-term development of the industry, this is very important; it lays a foundation: the probability of another large-scale explosion like FTX happening again will be much lower. As you just mentioned, during such a significant downturn, many exchanges experienced considerable volatility, even technical failures, but in terms of protecting user funds and the adequacy of reserves, there were no issues overall, and there was no systemic liquidity crisis; they did not get stuck or collapse due to concentrated user withdrawals.

In fact, this situation was not unique to FTX; many exchanges have experienced similar explosive events, just on different scales. But now such situations have become rare, which is a good thing.

Colin: Returning to the previous question, from the user's perspective, is the current PoR sufficient? Are there any vulnerabilities or areas worth upgrading? Especially from a technical standpoint, what do you think?

Lin Han: I believe there are still many areas that can be upgraded. Relying solely on Merkle trees is not enough. Merkle trees can only let users know, "My assets are in this tree and have been counted by the platform," but users do not know what rules or program logic the platform uses to count the assets in the background. So a better approach now is to use zero-knowledge proofs as an auxiliary.

Zero-knowledge proofs can publicly disclose the methods and rules used to count assets in the system. While it will not reveal the specific asset amounts of each user and will not affect privacy, the entire counting method can be formally verified externally. Another very important point is that it must be open-source—the counting methods and code should be made open-source.

But simply open-sourcing is not enough; third-party audits are also necessary. Professional security organizations need to conduct code audits and program audits to prove that your statistical logic and proof system are reliable; only then can it be considered complete. Therefore, among the exchanges that claim to be doing PoR, there are actually very few that have fully implemented the entire set of "Merkle tree + zero-knowledge proof + open source + third-party audit." Many platforms also claim to have PoR and reserve proof, but they lack zero-knowledge proofs and serious audits, leaving a significant gray area in between.

The Resurgence of Privacy Coins and the Long-Term Game of Zcash and Regulation

Colin: Recently, early privacy protocol tokens like Zcash have quickly gained popularity, and there has been much discussion in the outside world. At the same time, Vitalik and the Ethereum Foundation have established a new department specifically to study privacy technology. Do you think privacy-related themes will become an important track in the near future?

Lin Han: I believe this is a very important track and theme. Privacy coins are not a new thing; they have been around for a long time, and Zcash has existed for many years. I vividly remember when Zcash launched around 2017; the excitement was palpable from the very first block mined. The reason this technology has garnered attention is that people pursue freedom—freedom in managing their own assets and freedom in protecting their personal privacy.

Blockchain indeed realizes asset sovereignty, allowing users to self-custody without banks. But the problem is that they are "too transparent." All fund flows and every transaction are recorded on-chain. You in the media are certainly familiar with this: the movements of large on-chain addresses can be tracked and analyzed. Once an address is labeled, it is almost like being a "transparent person." Therefore, the demand for privacy protection is immense, and Zcash was created for this purpose.

If privacy transactions can become widespread on-chain, it will undoubtedly attract a large number of users to shift from public chains to privacy chains for trading. However, the biggest challenge for privacy coins is regulation. Some users indeed have normal privacy needs, but others may use it for money laundering or to obscure the source of funds, which creates a natural conflict with anti-money laundering regulations.

Colin: I actually think that to some extent, the rise of privacy coins this year, whether it's Hyperledger or Zcash, has become more pronounced. It's interesting that OKX delisted all privacy coins two years ago and has now re-listed them. I feel this is closely related to the regulatory attitude of the Trump administration. During the previous administration, no one dared to do this.

Gate's Strategic Logic for Compliance in the U.S.

Colin: Gate has recently been advancing its compliance efforts in the U.S. and launching local compliance operations. What is your future development strategy in the U.S.? If there is a change in political parties in the future and policies tighten again, will it affect your development in the U.S.?

Lin Han: Before Trump took office, the entire crypto space faced significant pressure. The reason we did not launch in the U.S. at that time was that we had been applying for licenses in the U.S. since 2021, but we had not truly started operations. It was not due to technical or capability issues, but because we believed that in the absence of a fully clarified regulatory framework, it was more important to ensure that the platform could operate long-term, steadily, and compliantly in the future.

We consulted many local lawyers and legal advisors in the U.S. who have deep industry experience, but even they could not provide clear judgments. For example, whether certain tokens are considered securities varies among different institutions. Regulatory agencies are also continuously improving relevant rules. In such a highly uncertain environment, we chose to remain cautious. Although we gradually obtained licenses, the platform did not immediately start operations but prioritized solidifying its compliance foundation.

Since the beginning of this year, the regulatory path for digital assets in the U.S. has gradually become clearer, and the market environment has stabilized, which has led us to judge that we can gradually advance our business. Therefore, we officially launched our U.S. operations in August of this year.

Colin: What are your future business plans in the U.S.? If there is a change in leadership, will you be concerned about policies tightening again?

Lin Han: There may be some adjustments in policy, but it is difficult for the overall direction to completely reverse. We have currently obtained MTL licenses in 31 states in the U.S., and 10 other states have issued no-action letters, allowing us to serve a total of 42 states. Out of the 50 states in the U.S., we are working to complete the remaining eight or nine. Essentially, we can cover most areas of the U.S.

Next, we will further expand the types of services we offer. Under the existing licenses, we can provide services such as spot trading, staking, and buying and selling tokens. However, if you look at the U.S. market, platforms like Coinbase and Kraken are starting to expand their services, such as prediction markets and on-chain derivatives.

In the past, it was challenging for these services to land in the U.S., but now some prediction markets have already been deployed in the U.S., and even Robinhood and Coinbase have begun to engage with and launch related services.

Therefore, we believe that the current moment is very suitable for Web3 innovative business, and we will continue to push for license expansion and extend into more areas.

Exploring the Reasons Behind the Explosion of Perp DEX (like Hyperliquid)

Colin: In fact, another important hotspot over the past year has been Perp DEX, represented by Hyperliquid, which are on-chain derivatives platforms. Although on-chain derivatives have existed for a long time, from DYDX to other platforms, it seems that Hyperliquid's sudden explosion has lifted the entire track, forcing centralized exchanges like Binance, OKX, and Gate to invest heavily to support it, or else they risk losing users. Have you studied Hyperliquid? What do you think about its sudden rise? They only have an 11-person team, and they have grown so quickly; it’s quite impressive.

Lin Han: In the Web3 world, it is quite common for small teams to suddenly create huge projects. The early Uniswap team was also very small; OpenSea had a small team during the NFT boom; many leading DeFi projects that followed actually started with small teams.

You are correct that the Perp DEX track had already been developed in 2022 and 2023, and DYDX had a considerable trading volume at that time. We also launched our own Perp DEX early on, introducing a ZK-based Rollup in June 2023, allowing transactions to be packaged on-chain, where users can verify on-chain, similar to DYDX's approach. But why did it not gain traction back then, and why is it thriving now?

The core reason is that the entire industry's infrastructure has undergone qualitative changes over the past two years.

The infrastructure in this industry has improved rapidly, but everyday traders may not feel it. The advancements in infrastructure are mainly reflected in two aspects: increased capacity and reduced costs. Layer 2 protocols are continuously being launched, and performance is constantly improving.

In the early days of DYDX, although there were incentives, the on-chain costs were too high. When we implemented ZK Rollup, we needed a large number of GPUs for ZK computations, and the performance was only about 100 transactions per second, which could not support high-frequency trading, and each transaction was very costly, limiting development.

Later, Hyperliquid's situation was completely different: on-chain costs have become very low, and performance is almost comparable to centralized exchanges, allowing all orders to be processed on-chain, which is a significant breakthrough.

Another major benefit is the substantial improvement in wallet experience. Previously, wallets were difficult to use and complex, with very high risks in private key management; now, custodial wallets and mnemonic phrase management have been greatly simplified, with some even automatically backing up to iCloud, significantly lowering the user entry barrier.

Additionally, there is a very critical driving factor—points incentives. Projects like Lighter and Hyperliquid have seen explosive trading volumes because points can reduce user costs and increase returns, attracting a large amount of quantitative flow to migrate to Perp DEX.

Colin: Looking ahead, exchanges can actually be divided into three categories:

1. Pure compliance types (like HashKey),
2. Offshore types (like Binance, OKX, Gate, etc.),
3. On-chain Perp DEX (like Hyperliquid, Aster, DYDX, etc.). As Perp DEX grows, will it face anti-money laundering and KYC regulatory requirements? For example, if North Korean users start using it, what will happen? What is your view on the future structure?

Lin Han: Your classification is very accurate. Compliance types must fully comply with local regulations; for example, Gate entities operate under MiCA regulations in Europe, have obtained VARA licenses in Dubai, and are licensed in Japan. The third category is the Web3/DeFi ecosystem.

However, I believe that DeFi is currently just in a temporary regulatory gray area and will soon be brought under regulation. Recently, news has emerged that Dubai has begun regulating DeFi, requiring DeFi services to also be subject to financial regulatory oversight.

When I communicate with regulatory agencies in Europe, I can clearly sense that they are formulating a regulatory framework for DeFi. However, because the DeFi model is so different from traditional financial institutions, the regulatory difficulty is very high: CEX can be regulated like banks or payment institutions; but DeFi is an on-chain protocol, and regulating the front end is ineffective if the underlying smart contracts are still running.

They are currently discussing how to effectively regulate DeFi; it is just a matter of time.

Colin: Indeed, because the Trump administration's attitude was relatively lenient, people have recently somewhat overlooked the fact that regulation will eventually come.

Lin Han: Yes. From my observation, the progress of DeFi regulation is slower than I expected, but it will definitely come; it will just be different from CEX because the difficulty of on-chain regulation is too high and requires new technical solutions and regulatory logic.

Will Gate Lay Off Employees?

Colin: Recently, many exchanges have been laying off employees—will you be laying off employees?

Lin Han: Gate has always maintained a steady pace. I don’t know if you remember, but when the industry began large-scale layoffs in mid-2022, the overall internet industry was declining, and the crypto space followed suit, with many exchanges laying off 20% to 30% of their staff. At that time, Gate only laid off about 5%. Gate has never been the type of company that makes drastic hiring or firing decisions; we do not suddenly hire a lot of people or suddenly lay off many.

We have always been cautious and steady in our hiring. Even now, with some downturn in the market, we believe the overall industry will not be significantly affected, so we will not conduct large-scale layoffs. Instead, we prefer to maintain a natural attrition pace rather than aggressive personnel optimization.

We have been in this industry for over ten years, and in these 12 years, we have never experienced drastic expansions or contractions in our workforce. We have always believed that long-term stability and consistent pacing are more suitable for the development of an exchange.

Will Gate Go Public?

Colin: Have you ever considered going public in the traditional securities market?

Lin Han: I have actually hoped for this industry to go public for a long time. I started running an exchange in 2013, at a time when the crypto industry was completely unrecognized by the mainstream; many people even viewed Bitcoin negatively, and there were many negative media reports. I remember around 2018, 2019, or 2020, when Coinbase went public, it was very uplifting for me; it was the first time I felt, "Wow, the crypto space can really be recognized by the mainstream market and can actually go public."

Now everyone is accustomed to the approval of ETFs and participation from mainstream institutions, but that moment back then was very different in significance. At that time, I actually hoped to pursue this path of "normalization and going public." It is precisely for this reason that we have systematically promoted compliance since those years, applying for licenses in various parts of the world. You can see that among the leading exchanges, Gate is one of the ones that has applied for the most licenses; these efforts are all aimed at making the possibility of going public feasible in the future.

If a company operates in a compliant manner over the long term, going public will be smoother; otherwise, it will require a lot of rectification. I think OKX is currently undergoing a similar process, including building internal compliance teams, adjusting business structures, transforming processes, and standardizing finances, all of which must be done to move towards going public.

Colin: So, as you say, you have always had this "goal" or "vision," and as the industry becomes more compliant and the company matures, you will ultimately move towards going public?

Lin Han: That's right, it is like that.

Skeptical of DAT, Low Sustainability

Colin: Have you participated in the recently popular DAT over the past six months? What do you think about their sudden rise and quick fall into difficulties?

Lin Han: We have not participated in DAT, nor will we seek partners to package some tokens into a public company shell for operation. I personally hold a reserved attitude towards this direction, mainly because the technical threshold is not high. It’s just buying a shell and claiming to be a "company that buys and manages tokens," which is too flimsy a model.

What is the real significance of merely hoarding tokens? This model is somewhat similar to ETFs. ETFs also help manage a basket of assets and are already very mature; the difference between DAT and ETFs is not significant. Some DATs claim their differentiating point is "I help you buy tokens," but after buying, they don’t sell, just keep hoarding. A little more play might involve staking, such as staking income from Solana or Ethereum, but there aren’t many other models.

So I think it is more of a short-term avenue for people in certain regions who cannot directly buy tokens to indirectly access virtual assets through this method. The reason it was so popular for a while is that it met the needs of those "who cannot directly buy tokens," even leading to high premiums.

Colin: It also feels a bit like market manipulation; they find a shell with a particularly small market cap, stuff tokens into it, and then quickly pump it up.

Lin Han: Yes, such situations do exist. Therefore, I believe that the direction of DAT is not very sustainable, and the space is limited, so we have basically not engaged with it.

Key Focus for Next Year: Full Promotion of Web3 and Compliance Stations

Colin: The year is coming to an end; what are the most important goals, plans, or issues you hope to address for Gate next year?

Lin Han: There are several key goals. The first is in the Web3 area; our internal direction is "All in Web3," and we will invest greater resources next year. From the data, we can clearly see that user behavior is migrating significantly towards Web3. As mentioned earlier, the infrastructure has become very mature—wallet experiences are better, on-chain performance is higher, and costs are lower.

In terms of trading volume, over 25% of current spot trading volume is already completed on DEXs, and I believe the real number may be close to 50%. This is because the cost of inflating trading volume on CEXs is almost zero, which exaggerates trading volume; however, the cost of inflating volume on DEXs is high, so the volume is more authentic. Overall, the actual proportion of DEXs is very large.

Since users have the ability to manage their assets themselves and have a good experience, they are naturally willing to self-custody rather than entrust their money to centralized institutions. Therefore, users will increasingly turn to on-chain solutions. We must follow this trend and increase our investment; this is not just for next year but for long-term planning.

The second focus is on local compliance stations. We currently have local stations in multiple regions, including Dubai, Australia, Japan, and Europe. Once compliance stations are established, local market promotion, brand publicity, advertising, client meetups, and community activities can truly commence. Therefore, next year, we will invest a lot of energy in these compliant markets to expand our local user base.

Colin: Understood, one is Web3, and the other is compliance stations. Additionally, I feel that users' willingness to use DEXs in different regions is also related to tax issues. For example, Korean users may not use DEXs much due to tax delays, while users in the U.S. and Europe face heavier taxes, leading to different usage habits.

Lin Han: Indeed, many people will also consider tax factors.

Colin: I also thought of something; Gate has made some investments or acquisitions this year. In the future, in the development of Web3, will you not only develop on your own but also consider acquiring some mature protocols? Especially during market downturns, centralized exchanges have relatively strong capital reserves and can acquire products with an existing user base at lower prices.

Lin Han: We are focusing on two types of directions. The first type is infrastructure, including underlying chains, on-chain deposits and withdrawals, cross-chain bridges, and underlying protocols. These are essential infrastructures for the industry that we also need to use, so we will consider investing in or acquiring them in the future.

The second type is more directly related to our business, such as the product direction you mentioned. We have invested in ADEN and engaged in deep cooperation. ADEN is a leading representative in the industry that focuses on product and trading experience, achieving high trading volume without relying on points or inflating volume, driven by product strength, so we will prioritize cooperation with them.

Colin: It seems that in the coming year, every centralized exchange will deeply support one or even multiple Perp DEXs.

Lin Han: I believe this is inevitable. It doesn’t necessarily have to be incubation; exchanges might also develop them directly. Because CEXs already have complete infrastructure and a large user base, migrating these capabilities on-chain is not difficult, and user habits can be easily converted.

More importantly, users are already migrating to Web3; if CEXs do not prepare on-chain products in advance, they will not be able to retain users in the future.

This is why we must simultaneously focus on both Web3 and compliance.

Talent Flow to AI, What to Do?

Colin: It feels like developers have all gone to work on AI in recent years. In the early days, whether in crypto or DeFi, there were many entrepreneurs, but now, almost all new startup projects in California are focused on AI, while crypto entrepreneurs have gone to teams in New York that deal with stablecoins, funds, and financial services. It’s even hard to see young people at conference venues. Are you worried about this phenomenon? Does it indicate that starting a business in the crypto space is becoming increasingly difficult, especially with high security costs now?

For example, in AI, a few college students can quickly create a product because it doesn’t involve assets. But in the crypto space, a few students working on a project face significant risks, whether in compliance or security issues. Could this weaken the industry’s innovative vitality?

Lin Han: I think that’s true; AI and blockchain are indeed the two hottest industries right now. From our long-term observation in the blockchain space, there are still many people entering the blockchain industry; it’s just not as easy as it used to be. AI is more technology-oriented and very attractive, while blockchain combines technology and finance. This is why it’s more active in New York, as it has a deep financial background that aligns well with its positioning.

I have always believed that blockchain will ultimately change almost all financial industries globally—banks, consumer finance, wealth management, investment, etc.—because it is highly efficient and low-cost, and traditional finance will eventually be penetrated by it. So there are still many opportunities.

However, the phenomenon you mentioned does exist: more and more strong companies, institutions, and whales are entering the industry, making it much more challenging for ordinary entrepreneurs compared to a few years ago. In the early days, the blockchain was immature, and there were opportunities everywhere; one person or a few people could achieve things. But now the competition is much fiercer.

Even so, I still believe that blockchain is a very good entrepreneurial industry. Compared to traditional industries, the difficulty of starting a business is much lower:

In Web2 or traditional finance, starting a company, raising funds, and eventually going public is extremely difficult, and investors are very cautious because exit mechanisms are limited.

But in the crypto space, going public is very easy, and exiting is also easy, so investors are willing to invest in you. Even if no one invests, you can directly do an IDO through Web3 or even launch a meme coin to quickly obtain startup funds.

Therefore, compared to traditional industries, starting a business in blockchain is still easier and offers more opportunities, just slightly more challenging than the "golden age" a few years ago.

Will You Acquire a Bank?

Colin: Will Gate consider acquiring a bank in the future or issuing its own stablecoin?

Lin Han: We have indeed invested in a few crypto-related banks in the past, although not as a controlling shareholder. We invest in some infrastructure-related companies that are closely related to our business; these are strategic assets that are very important for industry development. From the current progress, these banks are gradually starting to play a role and are developing well.

As for stablecoins, we certainly have a very positive outlook. However, the problem with stablecoins is that they are too homogeneous. Why does USDT dominate the market? Tether's scale far exceeds that of other issuers; even though Circle is compliant in the U.S. and has significant influence, its scale still falls short.

This is a typical Matthew effect. The differences between stablecoins are not obvious, and the larger the scale, the better the liquidity and on-chain yields, leading to further growth. Therefore, if one wants to issue a new stablecoin to break through the Matthew effect and achieve widespread user adoption, it is very difficult.

Our current strategy is to launch GUSD, but we are not simply imitating USDT or USDC to create a pure "dollar reserve stablecoin." Our approach is to package it as a comprehensive asset wrapper, still using other stablecoins as the underlying assets, combined with RWA, such as U.S. Treasury bonds and treasury bills, to create a comprehensive, optimized product.

Because there are too many stablecoins and users find it hard to choose, we help users optimize their assets through a combination approach, somewhat similar to an RWA stablecoin, rather than directly competing with USDT, which is more practical.

Of course, stablecoins themselves are indeed a huge market. If one succeeds, it is almost "making money while lying down." You see, Tether might earn tens of billions to over a hundred billion dollars a year, but its actual operating team is not large, and its business model is very light, which is why so many people are rushing into this market.

However, truly becoming a leading stablecoin issuer is extremely challenging.

How Do You View Active Market Makers?

Colin: Over the past six months or a year, there has been controversy surrounding "active market makers." There are many discussions about market manipulation, collaborating with project parties to pump and dump, and extracting money, etc. I believe you are well aware of this; what is your view on this matter?

Lin Han: We see this roughly divided into two types of situations.

The first type is quantitative institutions that employ neutral strategies. These larger quantitative teams mainly use neutral strategies while also taking on market-making roles, employing passive strategies to provide depth and improve liquidity. These institutions are large in scale and have stable strategies, and they do not engage in market manipulation. Their trading volume is significant, but it essentially falls under normal market-making activities.

The second type is what you mentioned—deliberately pumping and dumping to extract money from the market. This situation was more common in earlier exchanges when their risk control capabilities were not as strong.

However, over the past year or two, the entire industry's risk control capabilities have improved significantly, and detection technologies have matured. Although there are still attempts to manipulate the market, the success rate is now very low. From our data at Gate, over 90% of manipulative behaviors are identified and blocked by the risk control system before or during execution. Therefore, the survival space for such teams has become very small.

Colin: Exchanges face issues of remote management, and former employees may vent their dissatisfaction online. Do you pay attention to these criticisms? What are your thoughts?

Lin Han: We do receive some feedback and can sense these discussions. I think it can be viewed from two aspects: one is the objective facts, and the other is some characteristics unique to the crypto industry.

The objective fact is that the blockchain industry is essentially FinTech—technology + finance. The tech industry itself is one of the fastest-paced among all industries, with AI being a typical example we discussed earlier. You have to keep up with the pace, and naturally, the work rhythm will be fast.

The financial industry is also extremely busy and highly competitive. When you combine technology and finance, you can imagine the intensity of the work. Especially in trading platforms, which are among the hardest in the entire industry, because trading happens 24/7. You have to be ready to face users at any time and respond to various emergencies; sudden surges and drops must be handled immediately, so the work intensity is indeed high, which is an objective reality.

The second point is that the working style in the crypto space is very unique. We are quite similar to Binance, with almost everyone working remotely. Some local stations have small offices, but there is no requirement to be in the office every day; everyone can choose freely. Some people like to gather in the office regularly, but most of the time, they work from home.

This approach actually breaks the traditional "clock-in and clock-out" system. So many discussions about 996 or flexible work weeks do not really apply in the crypto space. You could even say it's 007, which is not entirely exaggerated, because in a remote state, it’s hard to define when "work hours" start. If you are online, you are collaborating.

This working model places very different demands on individuals. Those who can manage themselves well will really enjoy this free rhythm; they don’t need to take leave to pick up their kids and won’t be restricted by family issues. But there are also people who prefer a complete separation: working during work hours and not working at all after hours. This model may not suit them. I believe more and more companies will adopt remote working methods in the future.

Recently, I gave a speech at the Hong Kong University of Science and Technology, and a student asked whether they should enter the crypto space. I encouraged everyone to try it because there are so many opportunities. If you can enter this industry early and adapt to this work rhythm and lifestyle, it will actually be very beneficial.

For Gate, we hope to find like-minded individuals who genuinely love blockchain and believe it can change the future. I remember very clearly that when we launched Bitfinex in 2013, our slogan was "Come with us, change the world." We want to work with partners like that.

Of course, the HR team does need to invest more effort in explaining the industry characteristics and working methods to newcomers and assessing whether candidates are suitable for this rhythm.

As for some external voices, I think it’s quite normal. Every industry has its criticisms, and it’s a common phenomenon for former employees to express dissatisfaction. What we can do is ensure that the company fulfills its commitments—clearly communicating during onboarding, compensating according to regulations upon departure, and issuing bonuses and options as promised. You rarely see negative comments about these aspects online, so I don’t think it’s a serious issue; it’s more about the adaptability issues brought by industry characteristics and remote culture.

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