On the 6th of June, the Binance Labs team conducted an AMA on Reddit.
Below is a summary of the Q&A for those that weren’t able to attend.
Thank you to everyone that participated.
Binance Ecosystem Fund: what are you looking for in the funds you will invest in? Is it going to benefit BNB holders indirectly?
The purpose of the fund is to identify and support projects that will make lasting impacts to the entire ecosystem. Thus, we are partnering with funds who care about the entire industry, who are responsible in their investments, and have deep insights in blockchain and cryptocurrencies. Once we care about the ecosystem and build a healthy industry, BNB will of course go well eventually.
Is a total decentralized exchange possible? If so how can it be achieved?
We are optimistic that some day, there will be excellent fully decentralized exchanges. We intend to sponsor academia and support multiple projects in this space. Exchanges need to be fast, scalable and avoid problems such as order book front-running. For the time being, most decentralized exchanges demonstrate weaknesses one at least one of these factors. Some hybrid models are attempting to get the best of both world. Over time there will be better, more decentralized exchanges available.
1. How will the Binance Ecosystem Fund affect BNB?
Will some profits be used to buy and burn BNB?
Will it be a focus to broaden the utility of BNB through the investments?
— I read the fund will be denominated in BNB. How will this work?
2. Making a decentralized exchange is an important mission for Binance. Binance has already initiated an open competition on the task. Will BEF invest in projects that can be directly implemented in Binance core business(for instance projects on decentralization)?
— What is your view on open source vs patented technology in your investments?
3. What are your worst case scenarios for the cryptoindustry going forward? and how are you investing to reduce the associated risks?
4. Your mission is to solve problems in the ecosystem. Can you elaborate on which problems you believe will be important to solve the next a) 1–2 years, b) 4–8 years and c) 10+ years.
I am looking forward to your answers!
Thanks for the long list of questions. I think most of your questions have been addressed by labs team. I would love to address some of them. Now we are using Binance’s profit to invest. The profit from Binance labs will eventually flow back to the whole BNB economy and benefit all token holders.
DEX is one of our investment focus sector.
BEF is our ecosystem program to partner with top funds.
I thought about the worst scenario of crytoindustry before I jumped in. I believe it won’t disappear, that’s the bottom line. There will be several cycles before it eventually thrive. I believer we will get there. The challenges in the journey is the most interesting things to me.
I can only predict for the next 1–2 years. That are the 5 focus area which we mentioned in other questions. If I make the prediction here for 4–10+ years, you won’t believe in me. lol. We are focusing on solving the problems we can see right now.
When will Binance Labs start investing in projects? Have you started already?
Hi u/matster_98, Binance Labs have been focusing more on research side since it is founded. And we only began to invest recently and have invested four projects so far: Mobilecoin, Oasis Labs, CertiK and Republic.
Pls elaborate abt Binance Ecosystem Fund?
Binance Ecosystem Fund is an initiative by Binance to collaborate with partners who care about the blockchain/cryptocurrency ecosystem. Binance is committed to make lasting impacts and build infrastructures required for the whole ecosystem to grow. We cannot do this alone and we do not have to do this alone. We will partner with 20 funds to help build the ecosystem together. Please fill out the form and submit to enter the process.
Does Binance Labs work with other blockchain for impact groups?
Yes, Binance Labs is always looking for collaborations with different groups. Cryptocurrency Governance Initiative (CGI) is an initiative from Binance Labs, an industry-wide collaboration to advocate for self-governance and healthy development of the crypto industry. You can pre-sign up now and we will keep you posted: https://docs.google.com/forms/d/e/1FAIpQLSf97ZQdUhHHrkRACih8dsaWb8_J0wNBofw_zv7IlCDZWdl3pw/viewform
This may be getting ahead of ourselves, but when Binance labs is looking to make investments into funds through BnB tokens, we think this would be hugely beneficial for the Binance ecosystem and increase institutional transactions on the platform. Is that the right way to think about it? Would institutions get the same kind of discounts for trading fees that BnB coins offer to individual customers?
Institutions are getting the same discount by paying trading fee via BNB.
While we think that Binance Labs is agnostic to the price of the BNB token, we believe our actions might have an impact on the overall size of the BNB economy. We also collaborate with our founder fellows and projects on some creative campaigns in order to educate users and lower the adoption threshold for them. We believe it’s not only for the sake of BNB, but the whole crypto ecosystem.
What are your thoughts on blockchain existing without cryptocurrencies? Is cryptocurrency needed for blockchain to thrive?
Edit: To add on, in what capacity are your investments in? Do you invest in blockchain companies by providing the funds they need; and get a stake of their equities/ revenues? Or do the companies you invest in must be a crypto project; as such we will see them listed on binance eventually?
A blockchain is a decentralized and immutable ledger. By this definition, it could have many more use-cases than just the currency use-case. We have seen many decentralized networks issue ‘tokens’ that represent entities or resources, and designing schemes around them to incentivize desired behaviors.
As for investments, we focus on investing in projects that benefit the crypto ecosystem, regardless of whether it is equity or token-based.
does a startup have to be advanced to get support from binance labs or can even just a developed idea (with business plan) be supported?
We are open-minded in terms of the stages of projects we invest in. Of course, the more developed and concrete your product/service is, it’s easier for us to understand you better.
How can startups apply? What are the requirements? When will you be ready to accept applications?
We are looking for top startup teams who are believers of blockchain technology and are willing to n capable of pushing the changes take place.
Pls apply from this link: https://goo.gl/forms/AVAl3i5iIez4Dgc12
Or go to our website: https://labs.binance.com/
How have your lives changed before and after you’ve started working at Binance Labs?
Sleep less and more energetic. Lol. Well, I feel a lot more responsibilities on my shoulder but it’s meaningful to me. After join Binance labs, I get to know the great Binance crew, a close family, who make me to be more driven to collaborate with each other to achieve our goal. Moreover, I’m happier.
As Labs team, integrity and responsibility matters a lot, as the impact that we can create as a team to the entire industry is big. We want to set examples as long-term view holders and non-pump/dump investors. Joining Binance Labs, I built stronger perspectives on building the ecosystem, not just about building a successful project or technology respectively. I learn so much everyday, and that makes me go on.
How does Certik rank among your investments?
How can Binance labs help the normal folk to invest in good ICO’s, aside being snatched and regulated away by governments? Do they really try and help the community?
CertiK is a formal verification framework to mathematically prove that smart contracts and blockchain ecosystems are bug-free and hacker-resistant. We were quite impressed by the team and what they have achieved, especially their academic achievement (The world’s first fully verified concurrent OS kernel,CertiKOS). That was one of the reasons why we wanted to support the team and help them to realize their vision.
Binance Labs has very strict criterias to select projects to back. And we would like to help more people to understand what the project does, what problems they are trying to solve, what their motivation is and what their vision is. Too much attention has been paid mostly to the price of the token, but few has been paid to really understand the project and what value it can bring to the industry and the real worlds. We would love to help more people to invest in good ICOs by helping them really understand the project and the team.
Hi Ella and team, thank you so much for making the time to speak with us. We are asking questions on behalf of some of readers here at Global Coin Research. 1st question, when you are saying the crypto space is a bubble in the Bloomberg article, at what price level do you think is reasonable to start buying again? and perhaps if you have a timeline outlook, thanks!
When I mentioned the bubble, I didn’t refer to any listed token price specifically but the valuation in the private market. It’s obvious if we use traditional venture investing evaluation model, which I still believe is valid in many ways. We do need to see the fundamental or potential value creation to justify the valuation. Whereas now in the crypto private market, there are just too much money and few investors have really read the whitepapers/bps before committing to a project. There’s too much money flooded into the crypto space while the whole pie is still small. That’s why I see a lot hype out there.
I think the main campus of Binance in Asia, are there any team member of Binance Labs working remote? If so how does the team benefit / overcome the fact that the team members are spread globally in different timezones?
We are a highly distributed team of 7 right now across the globe, not just Asia. And we are most of the time travelling, which means we work remotely most of the times. Everyone comes from different backgrounds, different perspectives, different culture, which enriches the team experience in many ways. Also, because we’re looking into projects across the globe, it makes sense that we are travelling to meet them. Thus timezone difference is not a big trouble for us, buAMt rather benefits us in many ways. The best part of being Binance Labs is getting to work with the best team.
What is the average fund size you are looking to deploy with partner funds?
We are actively looking to funds that share the same values and mission as we do — to build the ecosystem stronger. This is our application form: https://goo.gl/forms/sTxqe0nM8z8FJDke2. Regarding the fund size, applicants are expecting to have experience managing accumulatively over $100M fund size.
You’ve used Quantstamp prior to audit your token contracts, what stood out to you when deciding to invest in CertiK? What is the confidence level that they’ll be able to scale?
We are impressive by the CertiK team and what they have achieved so far. Professor Shao Zhong and Professor Ronghui Gu built CertiKOS, the world’s first fully verified OS kernel in 2016. Formal verification has been a decades-long concept and is widely considered as the only approach to guarantee bug free and hacker resistant. However, fully formal verification is too hard to achieve and is not applicable. By backing the Certik team, We are interested to see more progress and reliable application in this field. Acknowledged the challenges, but we have full belief in the team and are willingly to provide our support and help for them to deliver their goal.
Hi Team, firstly congratulations on the funding announcement. Can you give us an idea of the process that you go through for selecting any given investment?
We have a very long term investment horizon, so we only participate in projects where we expect long term results irrespective of short term value. Due to our long-term focus, we spend time to understand the founders’ motivations, the team’s vision and the ability to deliver on their promises.
We will then need to reach consensus among the Labs team members before we make an investment.
Ben, What projects are you looking to invest in?
Saw the news from CZ about your firm and the $1bln investment pool for new projects. Can you tell me a little bit more about this? Sounds amazing.
By steering capital towards the smartest people working on the best projects, we hope that our $1b fund will contribute building a larger, healthier and more resilient ecosystem. However money alone is by no means the only tool at our disposal. We will hopefully gain some signalling power thanks to our high standards and very long term focus. Projects that we work with have met a minimum threshold. And we are always happy to share our network and expertise with our friends and partners.
What projects, institutions, initiatives, and communities are you supporting beside projects offering tokens?
We are looking to support like-minded organizations with similar missions, for example we are currently working with research institutes such as MIT Digital Currency Initiative, IC3: The Initiative for Cryptocurrency and Contracts, and Chain Code Labs, Inc. We are interested in collaborations with more similar organizations in the future.
Do investments from Binance Labs guarantee ico and listing?
Our investment decision is independent to that of Binance Listing team’s, and our investment does not guarantee listing on Binance. Nevertheless, our standards are high when we scout for the the greatest teams with the best technologies and solving some of the world’s largest problems. We intend to support the projects that we take on and help the to deliver tangible outcomes. We believe that Binance Lab’s seal of approval should be a signal to any exchange looking for quality tokens.
Do you invest in the form of equity as well?
Secondly, when you’re investing in projects, are you open to investing in different projects that fall under the same category?
1. In terms of deal structure, we are open-minded and happy to participate in whichever deal structure best fits the needs of the founders and the profile of the project. We can consider pretty much any stage, region and asset class (whether it be equity or tokens). If your project matches our values and our mission, we will be happy to support you.
2. We commit to projects when we admire their potential to transform the world. The day that they themselves get disrupted by a more innovative player, it is our duty to the ecosystem to ensure that they get the support to flourish as well.
The Cryptocurrency Governance Initiative is interesting. At this point, we’ve seen self-governance efforts from Messari, Consensys, Gemini and now Binance (at least). Is the space really better off with competing self-governance frameworks?
And if competition is good in this space, how would the market determine who “wins”? Is this really a competition where people can vote with their assets?
It’s not competition, instead, it’s a call for collaboration. If you think of the impact and applications of blockchain/cryptocurrency as a whole, it’s still very small in the world economy. We need to jump out of the competition and enlarge the pie together. The first and most important thing is to protect the interest of early adopters and retail investors. By committing to improve self-governance, we hope the industry will become ever green eventually.
Hi Binance Labs team,
Thank you for leading the initiative of incubating blockchain technologies!
1. When Binance Labs looking for potential teams to invest,
a. What is the ideal team size in your mind?
b. Can you also tell us in what ways do you advise the teams?
c. How do you track the team’s progress?
d. What kind of incubation do you think is a successful one?
2. You have stated in the official webpage that you are especially interested in “Decentralized Exchange” and “Algo trading” (and few more areas):
a. Binance is currently hosting a DEX competition, is the competition in any way related to Binance Labs. E.g., is winning team considered to be invested by Binance Labs?
b. I think Binance internally has a DEX team too, if you invest in a DEX team, what is the relationship between the two teams?
Thank you sincerely. Helin
1a. — No set team size in mind, but we do expect team members to have adequate expertise.
1b. — We are very fortunate to meet some of the brightest minds in the industry and are connected with some of the most exciting projects. We are happy to share these resources with our friends and partners.
1c. — We have a long term focus. We do not judge teams by the short term speculative moves in their token price. Ultimately, we expect them to deliver real solutions to the market.
1d. — Blockchain technology has the potential to improve the lives of many. If a project improves even the lives of a few without harming others, it is a good start.
2a. — We are actively seeking for good teams with good ideas related to decentralized exchanges. The DEX competition should be full of bright people will brilliant ideas!
2a. — We are happy to support competing projects to Binance. We want to see the entire ecosystem grow, not just our own firm.
Good evening, Binance Labs! Thank you for hosting an AMA.
1. What is the core mission of Binance Labs?
2. What aspects of projects or coins does Binance Labs see right now as potentially huge and very helpful in the future?
3. For coins and projects and communities, and many more that Binance Labs supports, what aspects does Binance Labs anticipate will be helping the world in the future?
Good evening! Thanks for asking questions!
1. Binance Labs’ mission is to solve problems that matter most to the blockchain ecosystem and change the world for the better.
2. Opinions are mine, not those of Binance Labs: I believe the biggest innovation in near term happens in the protocol level, as the change blockchain brings is more of a structural/horizontal change. But there are certain issues we need to solve for this innovation, including Scalability, Decentralization, Privacy, Security and Compliance. We are looking for projects who are solving the scalability issue without sacrificing interoperability, achieving decentralization while ensuring efficiency, preserving privacy while not compromising transparency, enhancing security while promoting usability and being compliant.
3. We will always be with entrepreneurs and researchers with good values. Together, we solve problems. Hope this helps!
Will you be investing in smaller projects (such as a website/app that’s a ‘Market and news app’ run by one or a few people)? Or is it just larger projects you are interested in?
We will be interested in all sorts of projects regardless it is a smaller or a larger one. What really matters to us is whether the project is advancing blockchain technology, solving problems that matter most to the ecosystem, making meaningful experiments in token economy, creating significant innovation to the existing business model, and helping more people to understand the value of blockchain technology, etc
How and over what time frame will the $1B fund purchase BNB? Is there concern about large future crashes as the companies/orgs sell BNB to fund operations?
We have high standards for evaluating projects and funds. Therefore the deployment of $1b will not happen overnight.
For a token economy to be functional, we need both buyers and sellers. Therefore selling BNB to fund operations is not a completely unreasonable thing to do. Meanwhile, I also believe that if the overall size of the BNB economy grows, a number of funds and projects will choose to hold it on its own merits rather than as a gateway to other crypto assets. Exchanges are a key component of the crypto infrastructure and BNB is the fuel that Binance runs on. By accepting payments in BNB, our partners will be exposed to a critical part of the ecosystem. If our partners share our vision, they will not be incentivized to sell BNB over any other assets.
Hi Ella, Ling, Teck, and Christy!
The announcement of a 1B USD fund is super exciting, I imagine there are still some parts that are uncertain so feel free to skip any of these questions that can’t be answered yet, but I figured I’d give you a chance to clarify some stuff about this ultra exciting initiative:
1. Will the Binance Ecosystem fund donate money or make grants to non-profit blockchain initiatives, or is the fund purely for-profit?
2. Roughly what percent of the fund will be deployed into other funds, and what percent will be invested directly into projects?
3. BNB is a fascinating part of the ecosystem you’ve built: the funds investments will be in BNB, will the funds returns also be used to burn BNB tokens in some fashion eventually?
Hi Eric! Thanks for your great questions.
1. Yes of course, Binance Labs is not a profit-driven fund, but an impact-driven, strategic fund for the entire ecosystem. Thus, we are willing to support initiatives, researchers, developers and entrepreneurs with good intentions. We know that innovation comes from heavy research. That’s why we are willing to sponsor institutes including but not limited to:
IC3: The Initiative for Cryptocurrencies & Contracts, an initiative of university faculty members who focus on Cryptocurrency & Contract http://initc3.org/about.html MIT Digital Currency Initiative, a leading organization in the open-source cryptocurrency space https://dci.mit.edu/, Chaincode Labs, non-profit organization with core developers http://chaincode.com Programming Blockchain, an initiative to cultivate blockchain developers across the globe http://programmingblockchain.com/ and so on. Let us know if there are other good sponsorship/partnership opportunities!
2. We are flexible and open-minded in how we operate our fund. Also, it depends on who our partnering fund will be, how big each are, how many good projects we see, etc,. Since we are new, we are still exploring. 3. Same for this, we’re still exploring!
According to the Binance web site you focus on pre-ICO projects; how many have you launched in the past three months considering the lightening speed of Binance?
Haha Labs team is hustling everyday very hard! We have invested in 4 projects so far including: Mobilecoin, Oasis Labs, CertiK and Republic. Our long term focus forces discipline upon us and requires us to spend a long time to understand the founders’ motivations, the team’s vision and the ability to deliver on their intentions. We also deep-dive into the technology itself to fully understand and seek for ways to add value to our portfolio companies. This might require more time and energy, but we prefer it this way :)
When did Binance reach it’s tipping point, and what did you think lead to it? Other than the increasing price in cryptocurrencies. How were you able to scale up so fast?
Great technology helps, but success is not only about that. Trust is just as important. To maintain that level of trust, we realize at Binance Labs that we must maintain high ethical standards.
Binance has been unique in its ability to scale. Our pace of expansion would have been challenging if we had been entirely reliant on the constraints of the traditional banking system. Crypto is a great enabler of international cooperation. We are also unique in the sense that we have a flat organization and a very unique culture that facilitates communication across a highly diversified and geographically spread group of employees. Decentralization and crypto economics will change the way we think of corporate organizations, and we look forward to seeing thousands of companies enjoy equal or great success to ours.
Got two questions,
1. What is your investment process?
2. How will Binance build an ecosystem?
1. We invest in the infrastructure that our ecosystem needs. We take a long term perspective on blockchain technology and the crypto space. Thus we are actively looking at the fundamental building blocks needed for the whole ecosystem to thrive. Verticals that we currently focus on but not limited to:
- Public Blockchain
- Decentralized Exchange (DEX)
- Stable Digital Currency
- Compliant ATS/Security Token Platforms
2. Ecosystems do not arise from a single individual, entity or organization. The foundations of a healthy ecosystem require a clear mission, solid values and community support. Binance Labs prides itself on its mission statements. Our core team has great values. And we will engage with the community through communication, collaboration, friendship and financial support. Our ambitions for the ecosystem are immense and we cannot do it by ourselves. Together, we will make a greater impacts. Today’s conversation is part of our efforts to engage with the community and to play our small part in building the ecosystem.