Today, we will introduce to you: Binance Labs' company philosophy and investment portfolio. Learn why Binance Labs was able to achieve a 10-fold return in three years.
About Binance Labs
What is Binance Labs | Introduction, Company Philosophy
Binance Labs is an investment and crypto project incubator under Binance, the world's largest crypto exchange. It was established in 2018. Subsequently, in 2022, He Yi, co-founder of Binance, also took over the position of head of Binance Labs.
Binance Labs has invested in and supported more than 200 projects, covering almost all areas of the crypto market, including: infrastructure, public chains, NFT, GameFi, Metaverse, DeFi and CeFi, etc. Investing in the crypto market across the board is also a feature of Binance Labs.
A major advantage of the projects they support is that they have the opportunity to be integrated into the Binance ecosystem. Such emerging projects can not only gain high exposure, but also reach a large number of users, further increasing their chances of success.
In August 2022, Binance Labs also revealed their investment principles and philosophy in the Binance blog, focusing on five attributes:
Product innovation: Are you creating something new that is beneficial to your users?
Ongoing Business and Token Model: Is the long-term business model profitable?
Traction: What are the number of users and revenue at this stage?
Quality and persistence of the team: Is the team dedicated to the project full-time?
Technology: Is the technology being built practical and feasible?
From an incubation perspective, Binance Labs provides founders with support in product creativity, operational management, token economics design, and financing through its incubation program.
MVB Project: Most Valuable Builders, Alphas are all here?
MVB is the “Most Valuable Builder” incubation program launched by Binance. The purpose of this plan is to focus on the rapid growth of the BNB Chain ecosystem and support high-quality potential projects on the chain.
The investment projects for the sixth quarter have been announced and more than 1,500 applications have been received. 53% of the applicants are from North America and Europe, while 36% are from Asia-Pacific. In the end, less than 1% of the projects were selected.
Among them, a total of 5 items were selected in the field of DeFi, 2 items in infrastructure, and 5 items in DApp. AltLayer, which was previously introduced by Biyan, was also selected into the MVB list of the sixth season.
Binance Labs Team Members:
According to information on the job search website Linkedin, there are currently 66 members in the Binance Labs team, but only 9 senior executives are listed on the official website, most of whom are in the investment field and portfolio management.
Person in charge: He Yi
He Yi is the co-founder and CCO of Binance. She has served as vice president of Yixia Technology and host of Travel TV. She is also the co-founder of OKCoin and is known as the "No. 1 in the cryptocurrency circle". He Yi's goal is to promote Web3 and blockchain technology and establish industry standards. Under her leadership, Binance Labs will focus on investing in visionary projects and founders.
She believes that Web3 products can only be truly popularized when they can be perfectly integrated into users’ daily lives. Binance Labs has been committed to supporting early key projects, such as the well-known side chain Polygon and blockchain data analysis website Dune Analytics.
Binance founder Changpeng Zhao (CZ) also said: "As a founding member of Binance, He Yi has been active in Binance Labs affairs. Now she will play a more core role in Labs, looking for projects that can continue to develop in difficult markets."
Investment Director: Alex Odagiu
Alex Odagiu is the Investment Director of Binance Labs, covering token, equity and strategic investments. Prior to joining Binance, Alex worked for a technology fund in London for 2 years and spent 4 years in the investment banking department of Goldman Sachs. He holds a Master's degree in Economics and Mathematics from the University of St Andrews.
Business Strategy & Operations Director: Dana Hou
Dana Hou is the Head of Business Strategy and Operations at Binance Labs, supporting its investment projects and other important activities within the company. Prior to joining Binance, Dana worked at Alibaba and Kuaishou Technology, and was a macroeconomic strategy analyst at Goldman Sachs. Dana graduated from Peking University and has an MBA from Stanford University School of Business. He was also selected by Forbes as one of the 30 under 30 in Asia in 2018.
Binance Labs Portfolio
The following figure is an overview of Binance Labs’ portfolio
Binance Labs investment performance: 10x return in the past three years
According to statistics from the data platform Chain Broker, Matic performed the best in Binance Labs' investment portfolio, with a 210-fold increase, followed by Sand at 64.2 times and Axs at 56.4 times.
In addition to the investment performance of Binance Labs, the better-known Binance LaunchPad has often become the focus of market attention and is also the favorite investment product and benefit of $BNB holders. In May 2023, a well-known Chinese currency circle KOL Bulbasaur has integrated the performance of Binance LaunchPad and found that even if the market conditions are not good this year, the projects launched this year still have a maximum increase of 25-40 times, which is not simple.
Binance Labs investment overview: infrastructure is the main focus, and other tracks are evenly distributed
According to the crypto project database Rootdata, Binance Labs' largest investment area is infrastructure (39.4%), followed by DeFi (19.4%) and games (18.2%). These three areas together account for 77% of the total investment.
The total number of investments was 78, of which 31 were lead investments, accounting for nearly 40%.
In August 2023, the well-known crypto research organization Messari issued a report stating that Binance Labs was the most active investment institution in the past six months of 2023, completing a total of 17 investments, 14 of which were lead investments, far exceeding other institutions.
In September 2022, He Yi, head of Binance Labs, was interviewed by the crypto media Forkast, during which he also revealed Binance Labs' preferred investment projects.
They focus on the following three tracks:
Infrastructure: Blockchain development is still in its early stages. We hope that in the future people will be able to use blockchain-native products everywhere, just like using office software and social media. However, the current technology still has limitations. Therefore, whether it is the base layer or the cross-chain protocol, Binance Labs will continue to invest in infrastructure in this area.
Running blockchain application projects: There are more and more projects emerging that attract a large number of users, such as those adopting Play to Earn or Move to Earn. Binance Labs is paying close attention to those products with innovative applications.
There are some basic questions that we ask about these projects: What is the business model? What problems or challenges are being solved? What is innovative? These are questions that Binance Labs often asks.
Blockchain-related services make the industry develop more smoothly, such as information security: In traditional Web2 companies, hacker attacks are rarely heard, but in the Web3 industry, this situation is common.
Web3 practitioners have always emphasized: "Code is Law". If your code is not perfect, when problems arise, it is the responsibility of the project itself. He Yi agreed with this, but if the entire blockchain industry is expected to be more widely adopted, the product must be easy to use to meet the needs of more people.
She also said that she prefers to support projects that have unique innovations rather than simply imitating others. When asked about the strategy of "forking" popular projects to make quick money, she responded: "If someone tells him that their project is just imitating a popular project and hopes to make money quickly, he is not interested in it."
He Yi further pointed out that Binance values "long-termism" rather than short-term interests.
Binance Labs Notable Investment Projects
1inch Network：
The first-place decentralized exchange aggregator has a reward of 3.7 times.
Investment time: August 2020 Investment round: Seed round
Investment amount: Led by Binance Labs and Galaxy Digital, with participation from IOSG Ventures, Libertus Capital, Dragonfly Capital, etc., the round amounted to US$2.8 million.
DODO：
A decentralized exchange with an innovative algorithm, with a reward of 1.06 times.
Investment time: October 2020 Investment round: Private placement round
Investment amount: Led by Binance Labs, Three Arrows Capital, and Pantera Capital, with participation from IOSG Ventures, Primitive Ventures, Galaxy Digital, etc., the round amounted to US$5 million.
zkSync（Matter Labs）：
Layer 2 uses zero-knowledge proof technology and no coins have been issued.
Investment time: March 2021 Investment round: Round A
Investment amount: Led by Union Square Ventures, with participation from Binance Labs, a16z crypto, Dragonfly, 1kx, etc., the round amounted to US$6 million.
LayerZero：
Full chain agreement, no coins issued.
Investment time: September 2021 Investment round: Round A
Investment amount: Led by Binance Labs and Multicoin Capital, with participation from The Spartan Group, Delphi Ventures, DeFiance Capital, etc., the round amounted to US$6.3 million.
Wombat Exchange：
Multi-chain stablecoin trading market with a reward of 55%.
Investment time: November 2021 Investment round: Seed round
Investment Amount: Solely invested by Binance Labs, the amount was not disclosed.
Binance Labs Recent Investments
ColLabs：
Invitation-based Web3 Investment Community
Investment time: August 2023 Investment round: Undisclosed
Investment Amount: Solely invested by Binance Labs, the amount was not disclosed.
Pendle Finance：
Income derivatives protocol for tokenizing future income
Investment time: August 2023 Investment round: Undisclosed
Investment Amount: Solely invested by Binance Labs, the amount was not disclosed.
Dolphin Lab：
Provide ZKWasm trustless solutions and application SDK
Investment time: August 2023 Investment round: Undisclosed
Investment Amount: Solely invested by Binance Labs, the amount was not disclosed.
Curve Finance：
Decentralized stablecoin exchange, DeFi veteran protocol
Investment time: August 2023 Investment round: Undisclosed
Investment amount: $5 million invested solely by Binance Labs.
Helio Protocol：
Overcollateralized Stablecoin Protocol on BNB Chain
Investment time: August 2023 Investment round: Venture Round
Investment amount: $10 million invested solely by Binance Labs.
summary
The club believes that Binance Labs' biggest advantage over other investment institutions is traffic. Because Binance is still the world's largest centralized exchange and the first stop for many novices to enter the crypto world, it can be said that it has the most attention in the entire cryptocurrency circle, which also makes it easier for projects to reach users.
They invest a lot of resources in other public chains, protocols, infrastructure, NFT, on-chain games, metaverse, DeFi and CeFi and other fields. These investments aim to make it easy and safe for everyone to experience blockchain technology. As more people use cryptocurrencies, exchanges will attract more users, thus increasing revenue. These proceeds are again used to support more projects and form a healthy cycle of industrial economy.
Binance Labs has also demonstrated this philosophy through action. Nearly five investment projects took place within one month, with a very high investment frequency. The overall investment scale has also grown from the original US$7.5 billion to US$9 billion after He Yi took office (August 2022).
With an investment method that has multiple points of presence and a flywheel effect, it is foreseeable that Binance Labs will be one of the winners in the next bull market.