Dialogue with the founder of Paradigm: Never predict the final winner, only focus on projects that provide value to users and developers

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2022-03-03 11:08

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DeFi will continue to develop in the next 10 years.

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DeFi will continue to develop in the next 10 years.

Original source:UpOnly

Original Compilation: Dong Yiming, Chain Catcher

Original Compilation: Dong Yiming, Chain Catcher

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Fred Ehrsam (left) and Matt Huang

Fred：secondary title

1. How did Matt Huang and Fred Ehrsam meet?We actually have a lot of intersections, and the story can be told from 2017. Candidates interviewing Sequoia USA usually need to submit a simulated investment memo. Matt chose to write Coinbase, but we didn't know each other at the time, which may also be a bit of fate.We really met after I left Coinbase. I wrote a blog at the time, which mainly outlined that the blockchain is the foundation of the metaverse, and we also established a relationship because of this blog post (related reading: "

Matt："). Matt thought at the time that I might want to build these ideas of mine as an entrepreneur, but I didn't think I could actually be a builder. We probably sent each other 60 emails to exchange ideas.

Yes, exchanging ideas with Fred often gives me an epiphany and I sense that he is a very special person that makes me wish I could work with him one day, or fund his next company or something other forms.

Fred：secondary title2. The foundation of the metaverse: blockchain enables people to truly own digital property rights

Cobie：I spent a weekend discussing "what the metaverse would look like" with executives from some big companies. The conclusion at that time was: the often discussed content related to metaverse vision will definitely become a part of it, but its foundation should be composed of some data layers, through which we can transmit the data of this world to In the Metaverse. I think back then when people were talking about the metaverse, they didn't realize that crypto was the metaverse.

Matt：It is not just a VR world, but a shared data layer, where everyone has the right to decide who can own which digital assets.

What do you think the Metaverse will be like in 15 to 20 years?

The most attractive thing to me is that the blockchain can make property rights possible, so that people can truly have property rights in the metaverse. Just like in some countries, if people don't have strong property rights, then the government can step in and seize people's assets, and local warlords may track and control you. Encryption can give people strong property rights and digitize people's property rights. As a result, the digital world will be much larger than it is now, and this is a general trend in the next 10 to 15 years.

Fred: Yes. I don't think people realize how restrictive the internet is today, nor do they understand the real concept of digital property rights in the future. Today we still live in a feudal internet world where if you want to leave, you can’t take anything with you, and if you want to change the way the system works, you have absolutely no power to do so. Encryption, like Matt just mentioned, is going to change all that. Everyone will really have something for themselves and can take it to another place.

Fred：secondary title

3. Encryption is changing barriers to entry and exit

I think encryption fundamentally changes the barriers to entry and exit. Not everything is decentralized in crypto, it's a wrong way of thinking, there will be a lot of centralized experiences built on top of decentralization. We can see that the top 10 apps in the App store have hardly changed in the past ten years.

Matt：Gaming companies may be able to make the leap sooner, because installing an open economy in games seems like the right thing to do, while social media seems to be harder to pull off.

One analogy I can think of, the digital world we live in today is like all monarchies or dictatorships, we are looking for the first country that is willing to go to democracy, they are willing to give up the rights they have and let the people rule, I think This is very difficult to do for a large enterprise. And we can see that nowadays, Internet companies that can achieve the largest market capitalization have more or less given some power to users, and this may become a norm in the next 20 years.

UpOnly：secondary title

Fred：4. Modes such as Play to Earn have improved the problem of low network utility in the early stageDo you think it is important to directly tell users that this project can make money? For example, Play-to-Earn games like Aixe tell people that there is money to be made to attract more users.I think this is necessary. make

Network effects come into playThe hardest part was the early "chicken and the egg" problem. If there is a new tweet, and you are the first user, enter the system and you find that there is no application there, you will leave, the same for the second user and then infinite loop. That's why some of the web 2 giants haven't changed the utility of the web.Overcoming this problem is actually very difficult,

Matt：And encryption provides the first real solution to the cold-start problem

Fred：. In the beginning, the network utility is low and there are few applications, but even then, as an early owner of the network, you can enjoy the benefit of taking ownership of the network's potential economic upside to offset the network utility at the beginning The fact that time is very low.

Matt：It is worth noting that the concept of Play-to-Earn has also existed for decades. I think you all remember the gold farmers or players in the game "World of Warcraft". Players can buy and sell game items or trade skins, but these players They are all ultimately bound by the game's terms of service. While encrypted games are embracing the concept of Play-to-Earn, making money has become the core part of the game, which will be more attractive to those who want to rely on games to make money.

Uponly：In a way, I think work is the purpose of human beings, so there are many popular games such as World of Warcraft that actually have a strong "work" component that people like, and people can find a lot of meaning in games .

Fred：I have a question I've been curious about. Why do we have pictures or 3D characters representing individuals in the virtual world, and why can't we directly represent ourselves with our real image?

I think the beauty of virtual worlds is that they allow people to create the worlds they want to create. I guess if you ask most people what is most important to you, or what your image of yourself is, they won't describe your appearance truthfully. From my own experience, I spent about 4,000 hours playing World of Warcraft when I was 16 years old. At that time, I felt that my image and equipment in the game were more important than anything else. And people's personalities have many sides, maybe on social networking platforms, he only wants to show one or some aspects of himself.

Matt：secondary title

Since 2017, I have spent a lot more time with Fred. At that time, all the big Internet companies had been built, and Crypto felt like the next frontier that we could participate in building. The biggest problem we encountered at that time was that we did not find any crypto investment company that we were optimistic about. If we wanted to do something, we probably would not take funds from those investment companies at that time. This is the opportunity for us to establish Paradigm .

If you look at our official website, now we have Samczsun, Hasu, and a new member will join soon. I think the good thing about encryption is that people can pop up from places they haven't heard of, and we don't care what school he graduated from, or what he did in the past, as long as he has talent, what he does can be done Being able to speak for him is very powerful.

Uponly：secondary title

Matt：6. DeFi is still in a very early stageIn recent months, people have been talking about DeFi 2.0. It has been a long time since I have noticed any interesting new things in DeFi, and the emergence of the new vocabulary DeFi 2.0 has once again attracted everyone's attention. What stage do you think you are in DeFi now? What will happen in the future?。

Fred：I think we're still at a very early stage, and there's a lot that needs to be built if we're going to build a financial system on the blockchain from scratch. So I think innovations will appear in waves like new hotspots every month, and it may be something related to NFT or Web3. We met privately with some people who are still building DeFi to discuss,

Uponly：I think DeFi will continue to grow in the next 10 years

Matt：What could take us from $100 billion to trillions of dollars in asset value?

I think it might just take time. People's trust in DeFi also needs to be established step by step, which is the progress of new technologies. Now, encryption may be driven by interest and speculation, but in the long run, if DeFi can serve trillions of dollars in assets, it may become less speculative, and then eventually become accessible to the public As well as the needs of financial institutions, institutions will also take on the role of middlemen at the very beginning to help DeFi be accepted by the public. It's like when the elevator first appeared, you need an elevator operator in it to make everyone feel safe. I think we are well positioned for the compound growth of DeFi in the next 10 years.

Uponly：secondary title

Fred：7. How to find investment opportunities?Given the cyclical nature of cryptocurrencies, how do you invest in them?Try to set your goals in 10 years instead of short term

So we spend less time thinking about who will be the ultimate winner, but instead focus on who will provide value to users and developers, and what kind of ecosystem they will become.

Uponly：secondary title

Fred：I know you're all interested in the role web 3 will play in the next iteration of social media, so how do you think crypto wallets will evolve, will they become an identity?

Just like the iPhone consolidated all mp3s, emails, phone calls, etc. into one thing, encryption is tying all your internet identities into your wallet. Your identity verification, bank account and reputation and ability will all be integrated into the encrypted wallet, which will be your universal method of network login, it is the digital you. Smartphones are now an important part of our lives. Perhaps in the future, encrypted wallets will be more important than smartphones today.

Uponly：secondary title

Fred：9. Zero-knowledge proof will guarantee user privacy

Can we do these things while protecting user privacy?Zero-knowledge proofs can. Everything you do on the blockchain is tracked now, and in a way, the early beginnings of the next generation of social networks were based on on-chain data. In order to achieve the purpose of privacy, we definitely need to develop better privacy tools, otherwise we will live in a very strange transparent world. Zero-knowledge proof allows us to use cryptography to prove certain things or do certain things without disclosing personal privacy on the Internet.But we need to know how many people really care about privacy? In web2 many people already "sell" their personal information to large corporations for convenience,

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