Edited by: Wu Shuo Blockchain

This episode of Wu Shuo Podcast features an interview with Gate founder Lin Han, covering topics such as the crypto market cycle, the impact of the US stock market and the macroeconomy, the AI bubble controversy, the privacy sector, compliance and regulation, the PoR mechanism of exchanges, the rise of Perp DEX, stablecoin competition, market making and market manipulation, the difficulty of starting a business 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 major bear market of the past. Macroeconomic and liquidity policies will continue to influence market trends. AI is still in its early growth stage and cannot be simply regarded as a bubble. Web3 user behavior is significantly migrating to on-chain. Privacy and zero-knowledge proofs will become important infrastructure in the future. Regulatory intervention in CEXs and DeFi will gradually deepen. The explosion of Perp DEX stems from mature infrastructure, reduced costs, and strengthened incentive mechanisms, and CEXs will fully deploy in this area in the future. The stablecoin sector will exhibit a long-term Matthew effect. While phenomena such as DAT and market manipulation exist, their scope is limited. Gate will continue to strengthen its compliance website construction, Web3 deployment, and infrastructure investment, while maintaining a long-term, stable talent strategy and work style.

Is a bear market here?

Colin: The overall market environment is currently at a turning point, and many people have doubts about the so-called bull-bear transition: some believe a bear market is coming, while others believe that because the AI industry is still developing rapidly, AI may drive up US stocks and subsequently risk assets. Everyone seems to be at a turning point, uncertain about the direction. Based on your years of experience, I would like to ask you to share your views on the current market situation.

Lin Han: We've experienced countless bull and bear market cycles; we've been running an exchange for almost 13 years. The crypto world often talks about a four-year cycle (Bitcoin halving), but in my observation, that's not the case; there's no inherent pattern. In the early days of the crypto market, which was much smaller, BTC halvings did have a significant impact. Before each halving, people would experience FOMO (fear of missing out), anticipating a decrease in production and selling pressure, leading to a price increase. So, back then, halvings did have a significant impact on the market. But now it's different. Most Bitcoins have already been produced, so the decrease in new production due to halvings is very limited, and the impact is negligible.

Moreover, the cryptocurrency market is now integrated into the global macroeconomy and is no longer a self-circulating circle. Therefore, it is more affected by the US stock market and the global economy. Bull and bear markets are more like part of the macro cycle, rather than being driven solely by the cryptocurrency market itself.

Looking back at the most recent significant bull-bear market shift, it was probably the DeFi Summer of 2020, which was driven by internal industry forces. However, after the pandemic hit in 2022, the global economy was impacted, and the cryptocurrency market immediately cooled down. At that time, internet giants and even Web3 companies began laying off employees, and the entire economy suddenly cooled down.

2022 and 2023 were relatively slow, until the end of 2023 when the market heated up again due to ETFs and economic recovery. 2024 was very active overall, and the beginning of 2025 was also strong, with the price of BTC breaking through $100,000 to a new high. Then, Trump's inauguration further boosted the economic recovery. This year's overall performance is not bad compared to 2024, with good economic growth. The industry remained at a high level from June to October. Although there were reports in November that trading volume fell to its lowest point since June, our platform data shows that the decline was not significant, and it is already very good compared to the bear market period.

Therefore, I think it's unlikely that we'll suddenly enter a sharp drop or a deep bear market like before. Even if the price drops from 100,000-120,000 to 80,000-90,000, that price is still considered very high.

From a broader perspective, the US economy remains strong, and the US stock market is also performing well. Many believe that new quantitative easing and large-scale capital injections may occur in December or next year, potentially weakening the US dollar and benefiting asset prices overall, including stocks and crypto assets. The market has already anticipated this.

Is the market outlook optimistic in the foreseeable future?

Colin: So you and your team believe that in the foreseeable future, including the first quarter and first half of next year, the market will likely remain relatively optimistic due to the loose monetary policy, right?

Lin Han: Yes. However, there is also a risk: some people are worried that AI might become a bubble, and that the AI bubble might burst next year. Especially this year, everyone is investing heavily in AI infrastructure, building data centers and computing clusters—these investments are enormous. Will this demand be sustainable next year? Because the large companies currently building AI infrastructure haven't yet achieved truly substantial profits.

Aside from companies building underlying infrastructure, such as Nvidia, which have performed exceptionally well, other companies undertaking large-scale infrastructure projects have yet to demonstrate clear profitability, including OpenAI. Given such massive investment, it's natural to wonder, "Is this a bubble?" Like the dot-com bubble of the past, there was huge investment but insufficient application implementation. However, from the current perspective, the practical impact of AI is indeed very evident.

Colin: I saw that Alibaba's CEO also refuted the "AI bubble theory" a few days ago, believing that there is no AI bubble in the next three years. Do you think the bubble is already very large, or is it actually not a bubble at all?

Lin Han: I think that when something new emerges, everyone will have very high expectations for it, believing that it will change humanity and the future. The higher the expectations, the more concentrated the short-term investment, which in turn drives up valuations. This is normal. But I don't think this necessarily constitutes a bubble. Even if there is a correction, we need to see if these applications will ultimately enter the market and be widely accepted by users. If they are subsequently accepted, then it cannot be called a bubble; however, some bubble-like aspects will indeed appear during the development process.

For example, the most familiar example in the cryptocurrency world is the NFT boom of 2022-2023, which even extended to the Web2 space. Facebook even changed its name to Meta, aiming to create the Metaverse. At the time, everyone believed that the pandemic would create a demand for remote work and change lifestyles through VR and the virtual world. However, it didn't meet expectations, so that wave can be considered a bubble.

But AI is clearly different now. Its practical applications 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 significant amount of time. Furthermore, with the advancement of AI, humanoid robots and intelligent assistance systems will be increasingly used in production and daily life—these are all very real needs.

What's your opinion on the 1011 stock market crash?

Colin: You mentioned earlier that the industry was doing well from June to October, but the so-called "1011 incident" is considered the turning point. Do you think this incident had a significant impact on the industry? Looking at the results, although the subsequent liquidation volume reached a record high, the market didn't show a sustained large-scale reaction. As an observer from the exchange, I feel the same way. What's your opinion? Did it have any significant impact on the industry?

Lin Han: I don't think the impact is actually that big. The reason is that, based on current data, although prices have indeed fallen by 20% to 30%, and Bitcoin's market capitalization has shrunk accordingly, if we look at the overall market capitalization of stablecoins: at the beginning of the year it was about $200 billion, and today it is close to $300 billion, while the market capitalization of stablecoins has hardly shrunk significantly during this round of sharp decline.

This shows that people are simply converting their assets from volatile assets to stablecoins and holding them temporarily, not withdrawing from the market. Once the right opportunity arises, these funds will flow back in very quickly. Therefore, I believe this is the core reason why this event has had a relatively small impact on the industry as a whole.

Furthermore, Bitcoin's current price of $80,000 to $90,000 is not low. Looking back over the past two years, it started at just over $20,000 in mid-2023 and has now increased four to five times, which is astonishing compared to traditional stocks or other assets. Therefore, even after this correction, it is still in a relatively high range.

Proof of Reserves (PoR) after the FTX incident

Colin: Although this round of market volatility has been intense, no exchange has actually gone bankrupt or run away as a result. This naturally brings to mind the FTX bankruptcy. At that time, Gate.io also emphasized its Proof-of-Reserve (PoR) system early on. From my personal perspective, FTX's bankruptcy forced exchanges across the industry to use stricter PoR to prove they "have not misappropriated user assets," which is a significant step forward for the industry. What are your thoughts? Is there still room for improvement in the current PoR system?

Lin Han: I think your point is crucial, and we considered it repeatedly. Why? Because in 2020, we were almost the first exchange to use Merkle trees for proof of reserves. At that time, zero-knowledge proofs and similar technologies hadn't been implemented yet, so we hired one of the top accounting firms in the US to help us with the proof of reserves. They could access our internal data and on-chain data, and then issue verification reports to users, publishing our audit results on their own website. We were already working on proof of reserves at that time.

Later, we open-sourced this system, releasing the code and encouraging everyone to use it. At the time, we repeatedly called on other exchanges to implement reserve verification, but almost no exchanges followed suit. I don't know if you remember, but back then, basically no one was willing to take the initiative to do this.

Until the FTX incident, under pressure from public opinion and users, everyone was forced to start developing PoR. But from the perspective of the industry's long-term development, this event is crucial; it laid a foundation: the probability of another large-scale collapse like FTX will be much lower. As you just mentioned, during such a large downturn, many exchanges experienced significant volatility and even technical glitches, but overall, there were no problems protecting user funds and ensuring sufficient reserves. There was no systemic liquidity crisis, and exchanges didn't experience blockages or collapses due to a surge in user withdrawals.

Actually, FTX wasn't the only exchange to experience this kind of collapse in the past; many exchanges have had similar incidents, just on different scales. But now, such situations are rare, which is a good thing.

Colin: Going back to the previous question, from a user's perspective, is the current PoR sufficient? Are there any vulnerabilities or areas for improvement? Especially from a technical perspective, what's your view?

Lin Han: I think there are still many areas for improvement. Relying solely on Merkle trees is not enough. Merkle trees only let users know "my assets are in this tree and have been included in the platform's statistics," but users don't know what rules or program logic the platform uses in the background to count assets. So a better approach now is to use zero-knowledge proofs as an auxiliary method.

Zero-knowledge proofs can expose the methods and rules for calculating assets within a system. While this doesn't reveal the specific asset amounts of each user and doesn't compromise privacy, the entire set of statistical methods can be formally verified externally. Another crucial point is that it must be open-source—the statistical methods and code must be made public.

However, simply open-sourcing isn't enough; third-party auditing is also necessary. Professional security organizations need to conduct code and solution audits to prove the reliability of your statistical logic and proof system. Only then is it considered complete. Therefore, among exchanges claiming to implement PoR, very few actually have the complete set of "Merkel trees + zero-knowledge proofs + open source + third-party auditing." Many platforms also claim to have PoR and proof of reserves, but lack both zero-knowledge proofs and rigorous auditing, leaving a significant gray area.

The resurgence of the privacy sector and the long-term battle between Zcash and regulators.

Colin: Recently, early privacy protocol tokens like Zcash have quickly gained popularity and generated a lot of discussion. Meanwhile, Vitalik and the Ethereum Foundation have established new departments specifically to research privacy technologies. Do you think privacy-related topics will become a major focus in the near future?

Lin Han: I think this is a very important track and topic. Privacy coins are not new; they've been around for a long time, and Zcash has been around for many years. I remember vividly that when Zcash was first launched around 2017, the mining of the first block generated a lot of excitement. The reason this technology has attracted attention is because people are pursuing freedom—including the freedom to control their own assets and the freedom to protect their personal privacy.

Blockchain technology has indeed achieved asset sovereignty; Bitcoin and Ethereum allow users to self-custody their assets without the need for banks. However, the problem lies in their "too transparency." All fund flows and every transaction are recorded on the blockchain. Those of you in the media are certainly familiar with this: the actions of large on-chain addresses can be tracked and analyzed. Once an address is labeled, it becomes virtually "transparent." Therefore, the need for privacy protection is immense, and Zcash was created precisely for this purpose.

If privacy transactions become widespread on-chain, it will undoubtedly attract a large number of users to switch from public chains to privacy chains for transactions. However, the biggest challenge for privacy coins is regulation. While some users genuinely have normal privacy needs, others may use them for money laundering or to conceal the source of funds, which inherently conflicts with anti-money laundering regulations.

Colin: Actually, I think that to some extent, privacy coins have become even hotter this year, with both Hyperledger and Zcash becoming very popular. It's also interesting that OKX delisted all privacy coins two years ago and has now relisted them. I feel this has a lot to do with the Trump administration's regulatory attitude. Under the previous administration, no one dared to do this.

Gate's strategic logic for compliance in the United States

Colin: Gate is currently expanding its compliance platform in the US and launching local compliance services. What are your future development strategies in the US? If there is a change of political party in the US and policies tighten again, will it affect your development in the US?

Lin Han: Before Trump took office, the entire cryptocurrency industry was under tremendous pressure. The reason we didn't launch in the US was that we had been applying for licenses there since 2021, but hadn't actually started operations. It wasn't due to technical or capability issues, but rather because we believed that with the regulatory framework not yet fully clear, it was even more important to ensure the platform's long-term, stable, and compliant operation.

We consulted numerous local lawyers and legal advisors in the United States, all with years of experience in the industry, but even they could not provide a definitive judgment. For example, there are indeed differing opinions among different institutions regarding whether certain tokens qualify as securities. Regulatory agencies are also constantly refining relevant rules. In this highly uncertain environment, we chose to remain cautious. Although we obtained licenses one after another, we did not immediately launch the platform, but instead prioritized strengthening our compliance foundation.

Since the beginning of this year, the regulatory path for digital assets in the United States has become clearer, and the market environment has become relatively more stable. This has led us to believe that we can gradually advance our business, and therefore we officially launched our US site in August of this year.

Colin: What are the future business plans for the United States? If there is a change in leadership in the future, are you worried that policies will be tightened again?

Lin Han: There might be some policy adjustments, but the overall direction is unlikely to be completely reversed. We currently have MTL licenses in 31 states in the US, and we have also received no-action letters from 10 other states, allowing us to serve a total of 42 states. We are currently working on completing the coverage for the remaining eight or nine states out of the 50. Basically, we can cover most areas of the US.

Next, we will further expand our business scope. Under our existing licenses, we can provide services such as spot trading, staking, and buying and selling cryptocurrencies. But if you look at the US market, platforms like Coinbase and Kraken are starting to expand into more services, such as prediction markets and on-chain derivatives.

In the past, these businesses might have been difficult to launch in the United States, but now some prediction markets have been deployed in the US, and even Robinhood and Coinbase have begun to explore and launch some related services.

Therefore, we believe that the United States is currently at a very opportune time to develop innovative Web3 businesses, and we will continue to expand our licenses and extend into more areas.

Discussion on the reasons for the surge in Perp DEX (Hyperliquid, etc.)

Colin: Actually, another major hot topic in the past year has been Perp DEX, represented by Hyperliquid, which is an on-chain derivatives platform. Although on-chain derivatives have existed for a long time, from DYDX to other platforms, it seems that Hyperliquid's sudden explosion has boosted the entire sector, even forcing centralized exchanges like Binance, OKX, and Gate to invest heavily in supporting it, otherwise they would lose users. Have you studied Hyperliquid yourself? What do you think of its sudden rise? They only have an 11-person team, and they've grown so big so quickly; it's truly remarkable.

Lin Han: Actually, in the Web3 world, it's quite common for small teams to suddenly create huge projects. The early Uniswap team was also very small; OpenSea's team wasn't large when NFTs exploded; and many of the later leading DeFi projects actually started with small teams.

You're right. The Perp DEX space was already being explored in 2022 and 2023, and DYDX had a significant trading volume back then. We actually launched our own Perp DEX quite early, and in June 2023, we introduced a rollup based on zero-knowledge proofs (ZK), packaging transactions onto the blockchain so users could verify them on-chain—very similar to DYDX's approach. But why didn't it take off then, while it's successful now?

The core issue is that the infrastructure of the entire industry has undergone a qualitative change in the past two years.

The infrastructure in this industry is improving very rapidly, but those who trade cryptocurrencies on a daily basis don't feel it. This infrastructure progress is mainly reflected in two aspects: increased capacity and decreased costs. Layer 2 protocols are constantly being released, and their performance is continuously improving.

While the early DYDX wave offered points and many people were farming for them, the on-chain costs were too high at the time. When we did ZK Rollups, we needed a lot of GPUs for ZK calculations, with a performance of only about 100 transactions per second. This was completely unsustainable for high-frequency transactions, and the cost per transaction was extremely high, thus limiting our development.

Later, Hyperliquid's situation was completely different: on-chain costs were already very low, performance was almost on par with centralized exchanges, and it could put all orders on-chain, which was a huge breakthrough.

Another major benefit is the significantly improved wallet experience. Previously, wallets were difficult to use and complex, with extremely high risks associated with private key management; now, managed wallets and mnemonic phrase management have been greatly simplified, and some can even automatically back up to iCloud, significantly lowering the barrier to entry for users.

In addition, there is another crucial driving factor—incentive points. The recent surge in trading volume of projects like Lighter and Hyperliquid is due to the fact that incentive points can reduce user costs and increase returns, attracting a large amount of quantitative trading traffic to migrate to Perp DEX.

Colin: Looking at the future, exchanges can actually be divided into three categories:

1. Purely compliant types (such as HashKey).

2. Offshore platforms (Binance, OKX, Gate, etc.)

3. On-chain Perp DEXs (Hyperliquid, Aster, DYDX, etc.). As Perp DEXs grow in size, will they face regulatory requirements such as anti-money laundering and KYC? For example, what if North Korean users also use them? What are your views on the future structure?

Lin Han: Your classification is very accurate. The first category is compliance, which must be fully implemented in accordance with local regulations. For example, Gate entities are regulated by MiCA in Europe, have obtained a VARA license in Dubai, and are also licensed to operate in Japan. The third category is the Web3/DeFi ecosystem.

However, I believe that DeFi is currently only in a regulatory vacuum and will soon be brought under regulation. Recent news reports have already indicated that Dubai has begun to regulate DeFi, requiring DeFi services to be regulated by the Monetary Authority of Dubai.

During my communication with regulators in Europe, I clearly sensed that they were developing a DeFi regulatory framework. However, because the DeFi model is so different from traditional financial institutions, regulation is extremely difficult: CEXs can be regulated like banks or payment institutions; but DeFi is an on-chain protocol, so regulating the front end is useless as the underlying smart contracts are still running.

They are now discussing how to effectively regulate DeFi; it's only a matter of time.

Colin: Indeed, because the Trump administration's attitude has been relatively lenient, people have recently overlooked the fact that regulation would come sooner or later.

Lin Han: Yes. In fact, based on my observation, the regulatory progress of DeFi is slower than I expected, but it will definitely come, just in a different form than CEX, because on-chain regulation is too difficult and requires new technical solutions and regulatory logic.

Will Gate lay off employees?

Colin: Many exchanges are laying off staff lately — will you lay off staff?

Lin Han: Gate has always maintained a relatively stable pace. I don't know if you recall, but in mid-2022, the industry started massive layoffs. At that time, the internet industry as a whole was in decline, and the crypto world followed suit with layoffs, with many exchanges cutting 20% or 30% of their staff. But I calculated that Gate only laid off about 5% of its staff. Gate has never been the kind of company that "makes big changes" suddenly; it doesn't suddenly hire a lot of people, nor does it suddenly lay off a lot of people.

We've always been cautious and methodical in our hiring process. Even with the current market downturn, we believe the industry as a whole won't be significantly affected, so we won't be implementing large-scale layoffs. We'll focus on maintaining a natural attrition rate rather than aggressive personnel optimization.

We've been in this industry for over a decade, and in those 12 years, we've never engaged in any drastic expansion or contraction of our workforce. We firmly believe that a long-term, stable, and consistent approach is more suitable for the development of an exchange.

Will Gate go public?

Colin: Have you ever considered listing on a traditional stock market?

Lin Han: Actually, I've long hoped that this industry could go public. I started working in the exchange industry in 2013. At that time, the crypto industry was not recognized by the mainstream at all. Many people even thought that Bitcoin was a negative thing, and there was a lot of negative media coverage. I remember that around 2018, 2019, or 2020, when Coinbase went public, it was very exciting for me. For the first time, I felt that "the crypto world can really be recognized by the mainstream market and can really go public."

Now everyone is used to ETF approvals and mainstream institutional participation, but that moment was very different. So back then, I really hoped to take the path of "formalization and listing." And that's why, starting in those years, we systematically promoted compliance and applied for licenses around the world. You see, among the top exchanges now, Gate.io is one of the ones applying for the most licenses; all these efforts are actually aimed at making a future listing possible.

If a company operates in a compliant manner over the long term, its IPO will be smoother; otherwise, it will require extensive rectification. I think OKX is currently going through a similar process, including building an internal compliance team, adjusting its business structure, reforming processes, and standardizing its finances, etc. All of these must be done well before it can move towards an IPO.

Colin: So, according to you, you've always had this "goal" or "vision," and as the industry becomes more compliant and the company matures, you're ultimately heading towards an IPO?

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

I'm not optimistic about DAT; its sustainability is questionable.

Colin: Have you participated in DAT, which has become quite popular in the last six months? What are your thoughts on their sudden rise and rapid decline?

Lin Han: We are not involved in DAT, nor will we seek partners to put some coins into a listed company shell and then operate them. I personally have reservations about this direction, mainly because the technical threshold is not high. It's just buying a shell and then claiming to be a "company that buys and manages coins"—this model is too flimsy.

What's the point of simply hoarding cryptocurrencies? This model is actually similar to ETFs. ETFs also manage a basket of assets for you, and they're quite mature; the difference between DATs and ETFs isn't significant. Some DATs claim the difference is "I buy the coins for you," but they don't sell after that; they just hold onto them. A slightly more advanced approach is staking, such as Solana or Ethereum staking rewards, but there aren't many other options.

Therefore, I think it's more of a short-term way for stock market investors to indirectly access virtual assets because people in certain regions cannot directly buy cryptocurrencies. Its popularity for a period stemmed from fulfilling the needs of those "who cannot directly buy cryptocurrencies," even leading to high premiums.

Colin: It also feels a bit like market manipulation. They find a shell company with a very small market capitalization, stuff the coin into it, and then the price is quickly driven up.

Lin Han: Yes, that situation exists. So I think the DAT direction is not very sustainable and doesn't have much room for growth, so we basically haven't explored it.

Next year's focus: Full-scale promotion of Web3 and compliant websites

Colin: This year is almost over. What are Gate's most important goals, plans, or problems that it hopes to solve next year?

Lin Han: There are several key goals. The first is in Web3. Our internal direction is "All in Web3," and we will invest even more resources next year. Because, from the data, we can clearly see that user behavior is migrating to Web3 in large numbers. As mentioned earlier, the infrastructure has become very mature—better wallet experience, higher on-chain performance, and lower costs.

In terms of trading volume, over 25% of spot trading volume is now completed on DEXs, and I believe the true figure is likely closer 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 trading volume on DEXs is high, so the volume is more realistic. After comprehensive comparison, the actual proportion of DEXs is very large.

Since users are capable of managing their own assets and enjoy a better experience, they will naturally prefer to manage their own funds rather than entrusting them to centralized institutions. Therefore, users will increasingly shift to on-chain transactions. We must adapt to this trend and increase investment, not just for next year, but for long-term strategic planning.

The second key focus is local compliant platforms. We currently have local platforms in multiple locations, including Dubai, Australia, Japan, and Europe. Once a compliant platform is established, local marketing, brand promotion, advertising, customer meetings, and community activities can truly begin. Therefore, next year we will invest significant effort in these compliant markets to expand our local user base.

Colin: I understand. One is Web3, and the other is a compliant site. I also feel that users in different regions are willing to use DEXs due to taxation. For example, South Korean users don't use DEXs much because of tax deferrals, but in the US and Europe, where taxes are heavier, usage habits are different.

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

Colin: I also thought of something else. Gate has made some investments and acquisitions this year. In the future development of Web3, will they not only develop their own solutions but also acquire some mature protocols? Especially when the market is down, centralized exchanges have relatively stronger capital reserves and can acquire products with existing user bases at lower prices.

Lin Han: We focus on two categories. The first is infrastructure, including underlying blockchains, on-chain deposits and withdrawals, cross-chain bridges, and underlying protocols. These are essential infrastructures for the industry, and we need to use them ourselves, so we will consider investing in or acquiring them in the future.

The second category is more directly related to our business, such as the product-related areas you mentioned. We have invested in and are engaged in a deep partnership with ADEN. ADEN is an on-chain derivatives platform that we see in the industry focusing on product and trading experience, achieving extremely high trading volumes without relying on points or inflated trading volumes. It is a leading example of growth driven by product strength, so we will focus our cooperation on it.

Colin: I feel that in the coming year, every centralized exchange will heavily support one or even multiple Perp DEXs.

Lin Han: I think this is inevitable. It doesn't necessarily have to be incubated; exchanges may do it themselves. Because CEXs themselves have complete infrastructure and a large user base, migrating these capabilities to the blockchain is not difficult, and user habits are easy to change.

More importantly, users are already migrating to Web3. If CEXs don't prepare on-chain products in advance, they won't be able to handle users in the future.

That's why we must focus on both Web3 and compliance simultaneously.

What should we do about the talent drain towards AI?

Colin: It seems like developers have all gone into AI these past few years. There were many entrepreneurs in the early days of crypto and DeFi, but now almost all new startups in California are working on AI, while crypto entrepreneurs are flocking to teams in New York focusing on stablecoins, funds, and financial services. You even rarely see young people at conferences. Are you worried about this phenomenon? Does it indicate that starting a business in the crypto space is becoming increasingly difficult, especially given the high security costs now?

For example, in AI, a few college students can quickly create a product because it doesn't involve assets. However, in the cryptocurrency world, projects undertaken by a few students are extremely risky, facing both compliance and security issues. Won't this dampen the industry's innovative vitality?

Lin Han: I think so. AI and blockchain are indeed the two hottest industries right now. From our long-term observations in the blockchain field, many people are still entering the industry, but it's not as easy as it used to be. AI is more technology-oriented and very attractive; while blockchain is technology + finance. So, the reason it's more active in New York is because New York itself has a strong financial character, which aligns perfectly with its positioning.

I firmly believe that blockchain will ultimately transform almost every financial industry globally—banking, consumer finance, wealth management, investment, and so on—because it is so efficient and low-cost that traditional finance will inevitably be penetrated by it. Therefore, there are still many opportunities.

However, the phenomenon you described does exist: more and more large, powerful companies, institutions, and industry giants are entering the sector, making it much more difficult for ordinary entrepreneurs than it was a few years ago. In the early days of blockchain, it was immature, opportunities abounded, and one or a few people could accomplish great things; but now the competition is much fiercer.

Even so, I still believe that blockchain is a very good industry for startups. Compared to traditional industries, starting a business in it is much easier.

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.

However, in the crypto world, going public is very easy, and exiting is also very easy, so investors are willing to invest in you. Even if no one invests, you can directly conduct an IDO through Web3, or even issue a meme coin, to quickly obtain start-up capital.

Therefore, compared to traditional industries, blockchain entrepreneurship is still easier and offers more opportunities; it's just a little more difficult than the "golden age" of a few years ago.

Will they acquire the bank?

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

Lin Han: We have indeed invested in several crypto-related banks before. Although we don't hold controlling stakes, we invest in infrastructure companies that are closely related to our business. These are strategic assets and very important for the development of the industry. Judging from the current progress, these banks are gradually starting to play a role and are developing well.

As for stablecoins, we are certainly very optimistic about them. However, the problem with stablecoins is that they are too homogeneous. Why is USDT able to dominate the market? Tether's size far exceeds that of other issuers. Even though Circle is compliant and influential in the US, its scale is still significantly smaller.

This is a classic example of the Matthew effect. Stablecoins are not significantly different from each other, but larger coins have better liquidity and higher on-chain returns, leading to a snowballing effect. Therefore, issuing a new stablecoin to overcome the Matthew effect and achieve widespread user adoption is extremely difficult.

Our current strategy is to launch GUSD, but not to imitate USDT or USDC as a simple "dollar reserve stablecoin." Our approach is to use it as a wrapper for a comprehensive asset portfolio. The underlying assets will still use other stablecoins, combined with RWA, such as US Treasury bonds and Treasury bills, to create a comprehensive and optimized product.

Because there are too many stablecoins and users find it difficult to choose, we help users optimize their assets by combining different stablecoins, somewhat like an RWA stablecoin, rather than directly competing with USDT. This approach is more practical.

Of course, stablecoins are indeed a huge sector. If you really succeed, it's practically "making money while lying down." Look at Tether; it may have billions to tens of billions of dollars in revenue a year, but its actual operating team is not large, and its business model is very lean. That's why so many people are crowding into this sector.

However, becoming a leading stablecoin issuer is extremely difficult.

What is your view on active market makers?

Colin: Over the past six months to a year, there has been much controversy surrounding "active market makers." There have been many discussions, such as market manipulation, collaborating with project teams to pump and dump prices, and embezzling funds. I'm sure you're very familiar with this; what's your take on this?

Lin Han: We can roughly divide this into two categories.

The first category is quantitative trading firms that employ neutral strategies. These larger quantitative teams primarily use neutral strategies, while also acting as market makers. They utilize passive strategies to provide market depth and improve liquidity. These firms are large in scale, have stable strategies, and do not engage in market manipulation. Although their trading volume is large, it is generally considered normal market-making activity.

The second type is the kind of deliberate manipulation you described—pumping and dumping stocks to extract money from the market. This was more common in early exchanges because their risk control and detection capabilities weren't as strong then.

However, the industry's risk control capabilities have improved dramatically in the past year or two, and detection technologies are very mature. Although some people still attempt to manipulate the market, the success rate is now extremely low. According to our data at Gate, over 90% of manipulative attempts are identified and blocked by risk control systems before or during their execution. Therefore, the space for such teams to survive is now very small.

How to respond to criticism of corporate culture?

Colin: Exchanges face issues like remote management, and former employees often vent their frustrations online. Do you usually pay attention to these criticisms? What are your thoughts on them?

Lin Han: I have received some feedback and can feel the discussion. I think we can look at it from two aspects: one is the objective facts, and the other is some unique characteristics of the cryptocurrency industry.

The objective fact is that the blockchain industry is essentially FinTech—technology + finance. And the technology industry itself is one of the fastest-paced industries; AI, which we discussed earlier, is a prime example. If you can keep up with the pace, your work pace will naturally be fast.

The financial industry itself is extremely busy and demanding. Just imagine the sheer intensity of the work when you combine technology and finance. Trading platforms, in particular, are among the most demanding in the industry because they operate 24/7. You have to constantly interact with users and handle all sorts of unexpected situations, including sudden price spikes and crashes. So, the workload is undeniably heavy.

The second point is that the work style in the crypto industry is very unique. We're similar to Binance; almost everyone works remotely. Some local sites have small offices, but daily attendance isn't required; it's a matter of personal choice. Some people like to meet up at the office periodically, but most of the time they work from home.

This approach actually breaks the traditional "get off work-day system." So, discussions about 996 (9am-9pm, 6 days a week) or alternating weekends (alternating weeks of work and rest) don't really apply to the crypto world. Even calling it 007 (24/7) isn't entirely an exaggeration, because it's difficult to define when "working" is happening remotely. If you're online, you're collaborating.

This work model places entirely different demands on people. Gate doesn't care where you work; you can work while raising children, caring for family, or even traveling—no problem at all. As long as you're online and can collaborate.

Therefore, this approach demands a very high level of self-management. Those who can manage it well will greatly appreciate this free rhythm, as they don't need to take time off to pick up their children or be restricted by family issues. However, some people prefer a complete separation: working during work hours and never working after get off work. This model is not suitable for them. I believe that more and more companies will adopt remote work in the future.

A while ago, I gave a speech at the Hong Kong University of Science and Technology, and some students asked if they wanted to get into the cryptocurrency industry. I encourage everyone to try it because there are so many opportunities. If you can get into this industry as early as possible and adapt to this work pace and lifestyle, it will actually be very beneficial.

For Gate, we're looking for like-minded people—people who genuinely love blockchain and believe it can change the future. I vividly remember that when we launched Bitpie in 2013, our slogan was "Come with us, change the world." We hope to work with partners like that.

Of course, the HR team does need to invest more time and effort, explaining the industry characteristics and work methods to newcomers and determining whether candidates are suitable for this pace.

As for the external voices, I think they're normal. Every industry has criticism, and it's normal for people who have left to express their dissatisfaction. What we can do is ensure that the company fulfills its promises—clear communication upon joining, standardized compensation upon leaving, and the timely distribution of bonuses and stock options. You rarely see negative comments about these aspects online, so I don't think it's a serious problem. It's more about adapting to the characteristics of the industry and the remote work culture.