Undoubtedly, Web3 is one of the biggest trends of the next decade, and more and more people are joining the Web3 industry to make their mark. As one of the outstanding figures, former hedge fund guru Leon has a unique understanding of the social aspects of Web3. In the 11th episode of our interview series, we are delighted to have Leon share his entrepreneurial journey and insights into Web3.
1.Welcome, Leon! Could you share your background and how you got into the Web3 industry?
I previously worked in hedge funds and stock investments in Hong Kong for nearly a decade. In mid-2021, I started exploring DeFi, GameFi, and NFTs. In early 2022, I left my job to fully dive into Web3. Initially, I focused on building communities and DAOs (I’ve hosted nearly 600 Twitter Spaces events). I also attended offline events and received investments from various sources, including Temasek (a VC under the Singapore sovereign fund) and investors from Japan and Taiwan. This led me to start my own projects.
We’ve been working on CrossSpace for over a year now, offering social features like community management tools, content publishing, and task management. Recently, the emergence of Friend.Tech, which combines channels, traffic, and financial transactions, has opened up new possibilities. Our platform aims to be similar to Little Red Book, where content creators can increase their influence and earnings, and early supporters can invest in creators’ content for profit.
2. You have a background in traditional finance, how do you view the current market situation, and what investment opportunities do you see in the current global environment?
Most users tend to view the secondary market from an investor’s perspective, but large funds like us focus on financial data and short to medium-term market factors.
For entrepreneurs, it’s a different story. You need to be hands-on and not worry too much about what others think. The primary goal is to create a great product and survive in a bear market. Whether you’re an investor or an entrepreneur, you’ll go through industry and economic cycles. Surviving a bear market, preparing for the next bull market, and positioning yourself are crucial. These skills are essential for both investors and entrepreneurs.
3. How has your experience in the traditional finance industry helped you in your transition to Web3?
We’ve spent 10 years cultivating the ability to quickly understand an industry and a company’s business model, ask key questions, conduct research on multiple companies and industries simultaneously, track their fundamentals, and find various sources of information. In short, it’s about rapid learning and summarization skills, which are crucial in the information-dense Web3 space.
Additionally, our influence has grown because of the numerous Twitter Spaces events we hosted, similar to this interview format. Sometimes we had to discuss a topic with 4 – 5 guests simultaneously. The ability to ask good questions and provide valuable summaries is essential. In many ways, the skills I developed previously are transferrable to what I’m doing now.
4. In your transition, are there aspects that you find more or less suited to your personality?
My personality is better suited to entrepreneurship. Despite my years in hedge funds, I’m inherently extroverted. Many people in hedge funds, especially those focused on trading, prefer solitude and don’t need to interact with many people. They enjoy being alone. I have an entrepreneurial spirit in my DNA; I tried entrepreneurship in college and continued my education after a failed attempt. I believe I have the entrepreneurial spirit, and Web3 presented an opportunity to start again. In terms of personality, interpersonal skills, and leadership, I feel more suited to my current path.
The main challenge is that in financial institutions, platforms provide you with resources and connections. Large banks like Goldman Sachs and Morgan Stanley would cater to your needs, and resources were readily available. However, in entrepreneurship, especially in the early stages, you must create these resources and influence from scratch. We started building our community by hosting events and gradually accumulating resources through word of mouth. It’s like how our lead investor from Temasek found me on Twitter. Entrepreneurship requires building these resources from ground zero.
5. CrossSpace has recently been focusing on SocialFi content, drawing inspiration from Friend.Tech while adding your innovations. How do you view Friend.Tech and the current SocialFi wave, and what plans do you have for your product?
We originally focused on the social aspect of SocialFi, and our features for interactions between individuals and communities were quite robust. However, we encountered a bottleneck that many projects face – you have traffic but no cash flow. In Web3, it’s essential to be close to money and have transaction scenarios or value games. SocialFi lacked these features; instead, it relied on airdrops to generate traffic. Unfortunately, this traffic didn’t always lead to meaningful or valuable content; often, it was content created for quick gains.
As a result, SocialFi projects weren’t well-received by both capital and users for a long time. They didn’t seem to address the core problems. So, for a considerable time, I believe this sector was more appealing to VCs or exchanges rather than users. It wasn’t like DeFi, which solved real problems. However, Friend.Tech successfully opened up a new path by allowing individuals to issue and trade assets, all without requiring excessive liquidity. This innovation significantly expanded the potential of SocialFi.
About two months ago, we made the decision to iterate on some core features of our product. We introduced a Double Bounding Curve, which combines content with the creators’ keys. We realized that there are many more social scenarios that can be satisfied, both in terms of gameplay and user profiles. So, we aim to serve a different category of users – content creators, operators, KOLs, content researchers, alpha hunters, project founders, VC capital, and more. Based on our observations, most of these users haven’t deeply engaged in this space because of excessive parasitism and limited consumption scenarios.
However, a certain degree of parasitism and trading gameplay is meaningful. Therefore, we innovated on this and our current positioning is a content and KOL trading platform based on a Double Key (content and content creator).
6. After the success of Friend.Tech, many copycat projects emerged. How do you view these imitators? With everyone competing in this space, do you think there’s a risk of oversaturation and a scramble for the existing user base?
If the major play remains similar to Knowledge Planet, focused on trading with less emphasis on operations, Friend.Tech cannot be surpassed. Even if it has a lousy UI, slow iterations, and lacks many features, its first-mover advantage is unparalleled. Its TVL has risen to very high figures, and even imitators struggle to reach one-tenth of its value – it has become a race-level application. This is a positive development; it educates the entire industry and introduces interesting elements in a space that currently lacks application-layer trends.
Creating an imitation requires rapid development, leaving no room for genuine innovation and product refinement. Additionally, it’s difficult when competing for the existing user base. Currently, users in these imitators are mostly the same, and new users are scarce because imitators haven’t solved the problems that existed before. So, we’ve chosen a different path by applying the Bounding Curve to other social scenarios, as there are many specialized fields to explore.
We’ve observed that perhaps less than 10% of those deeply involved in Friend.Tech belong to the other 90%. Is it safe to conclude that they will never participate? I think it’s too early to make that judgment because the industry is still in its early stages. Therefore, we want to find opportunities within that 90%. In our view, Friend.Tech isn’t our competitor; it may be our mentor, something we learn from. Our focus isn’t necessarily the same scenario, and it may not be the same user base.
7. In a tweet, you mentioned the term “FT-like” applications. How should we interpret this term? Could future social products be categorized as “FT-like” and “FT-like” types?
Of course not. It’s not a strict definition; I just feel that it uses Bounding Curve mechanics to solve the problems of asset issuance and liquidity in SocialFi, creating a trading scenario. I call this “FT-like.” However, if there’s a better term like “Trading-based SocialFi” or “Cash-flowing SocialFi,” it depends on how you define it. “FT-like” is just a loose term.
8. Finally, do you have any messages for the CrossSpace community or the Web3 community in general?
I’m more interested in hearing from everyone. I believe that building products or projects involves listening to the community. And, don’t miss out on the opportunity in SocialFi, just like how in 2019, when DEX was in its early stages and few people used UniSwap. Yet, it ultimately ignited a trend and contributed to Ethereum’s growth. It solved two critical issues: after ERC-20 assets were issued, it required primary market assets and secondary market liquidity to facilitate trading. The advent of DEX solved these issues implicitly.
I think Friend.Tech has also ignited a new path and gameplay in SocialFi. It has paved the way for the next bull market by addressing the issuance of a new type of asset – assets issued by individuals and priced accordingly. With this, it can carry a significant TVL and bring more people and money into the industry. This is what we call “Mass Adoption.”
Everyone talks about Mass Adoption, but there needs to be something that not only attracts people but also attracts money. That’s what I want to convey.
A big thank you to Leon , and we hope that everyone can create value in the Web3 field.
We look forward to seeing what’s next for them and how their plans unfold in the years ahead. Stay tuned for our next engaging conversation with another prominent Web3 leader.