InkSight 1: The Cruciality of Financial DAO infrastructure
An interview with INK’s early investor, Yemu Xu, co-founder of ARPA, Bella Protocol, Penrose Tech and ZX Squared Capital.
▶ In the foreseeable future, human collaboration will probably happen less in the form of a company and more in project-based partnerships.
▶ Before Ink, most if not all the DAOs have been just focusing on voting or fundraising. No one realized how crucial finance infrastructure DAOs are.
Yemu is the co-founder of ARPA, Bella Protocol and ZX Squared Capital. He is also an early investor in INK Finance. In this article, Yemu shares his journey from traditional finance to the crypto world and his vision on the progressive development of the Web 3 era.
You were in the traditional finance industry. How did you get into crypto?
I was fortunate to start my professional career at Fidelity Investments, where I advised and consulted the CFO offices of Fortune 500 companies on their employee benefit plans and financial strategies. In 2016, I bought my first bags of Bitcoin and Ethereum under the influence of the then head of digital assets at ARK Invest, Chris Burniske, who came to Fidelity and gave a speech about crypto. But it was the 20% daily swing in price and the ICO craze in 2017 that really got me interested in finding out the driver behind it. I buried myself in reading Bitcoin and Ethereum white papers. Luckily, my math and actuarial science background quickly helped me wrap my mind around this revolutionary technology, and I was in awe. Before I realized it, I was an avid participant in crypto conferences and meetups in San Francisco and New York. Through these gatherings, I got to know intelligent and driven peers who are equally obsessed with crypto.
I became a full-time builder amid the bear market in 2018 with my partner Felix. We now run a venture studio that aims to empower the builders and creators of the Web3.0 era via useful and innovative tools and products. Our first experiments are ARPA and Bella Protocol, focusing on threshold signature and on-chain liquidity provision. We also built an asset management solution for institutional investors, ZX Squared Capital.
You are an investor and advisor to INK Finance. What are the trends in crypto and the Web3 world from your vision?
Everyone has their own definition of Web3.0. Powered by the internet and blockchain technology, Web3.0 is revolutionizing ownership of digital properties and the way we collaborate with each other. Web3.0 is decentralized, community-driven, bottom-up, permission-less, and innovation-focused.
Crypto is playing a massive role in the web3.0 revolution. It ensures individual sovereignty through actual property ownership.
I have been through two cycles in crypto and am more convicted than ever about the future of crypto.
For one, crypto is here to stay, and it is attracting some of the best talents around the world to come in and build. However, the current regulatory landscape is still curbing the full potential of this community-driven global paradigm shift.
In 1–3 years, countries will start to lay solid and unmistakable regulatory frameworks on crypto. More talents will come into the space worry-free, and innovative projects will continue to flourish. NFT, GameFi, and SocialFi applications will bring billions of users from the rest of the 90% population into crypto.
In 3–5 years, blockchain’s current limitations and bottlenecks will be solved. Ethereum and other next-gen blockchains with high throughput, low translation cost, and robust security will enable next-gen applications to bring about next-level mass adoptions.
DeFi world is widely adopting DAOs as an operating and governing model. What are the key advantages of using DAO in DeFi at present? In addition to voting and fundraising, what other detailed functions do you think or expect that DAO can benefit DeFi (such as providing liquidity)?
In the foreseeable future, human collaboration will probably happen less in the form of a company and more in project-based partnerships. DAO will be the backbone and infrastructure of the new paradigm, as it dictates the framework for governance, collaboration, decision making, execution, incentivization, treasury management, and many more.
DeFi is no exception. It aims to improve fairness, transparency, and, ultimately, the efficiency of the current financial system by moving activities on-chain, often with a twist. DAO infrastructure is crucial for automation, governance, settlement, clearance, trading, liquidity provision, credit creation, and even on-chain financial identity. In other words, decentralized finance can hardly be truly decentralized without the proper implementation of DAO.
Why did you choose INK Finance? What do you see in this DAO infrastructure?
Team is the #1 thing that I look at when making an investment decision. Tony is a true visionary and is building something truly innovative and unique in the space. He wants to build a comprehensive financial infrastructure that empowers anyone in need of any form of liquidity. It then enriches their toolbox with governance, cross-chain credit generation, treasury management, venture funding, and more.
In the very beginning, I was a bit skeptical if Tony and the team could carry out this vision, to be entirely honest. But my doubt was quickly proven wrong. Tony quickly assembled a team of veterans with profound experience in finance, management, infra engineers, marketing, operations, and business development. They brainstorm, execute and re-iterate unlike any other team I have seen, shipping demos after MVPs, while securing partners after users.
Before Ink, most if not all the DAOs have been just focusing on voting or fundraising. No one realized how crucial finance infrastructure DAOs are. Tony has the right team to carry out this vision of a decentralized future of finance, and I am very excited to see what they will build in the next 1, 3, and 5 years.
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