Interview, compilation: Frank, Foresight News
From Wall Street to the cryptosphere, from Bitcoin fundamentalists to the chairman of the Solana Foundation, which shift is more dramatic?
Perhaps Lily Liu herself can’t explain clearly. After entering the workplace in early 2005, she successively worked in top traditional financial institutions such as Morgan Stanley, McKinsey, KKR, HCA, etc. She was a typical traditional elite by the rules, but she never thought about it. , with the continuous help of his friend and industry giant Li Qiyuan, he dramatically learned about and came into contact with Bitcoin.
Since then, as an "old gun" who has been exposed to Bitcoin since 2013, Lily Liu has now entered the crypto industry for a full decade, from the exchange (Bitcoin China) to the earliest mining company in the United States 21 Inc (the company was later renamed Earn.com and acquired by Coinbase), and then to joining the public chain (Solana). She has always been at the intersection of top resources, feeling the most real changes in the market, while also observing the huge changes in the industry.
2013, “Bobby, you shouldn’t play with Bitcoin”;
In 2021, "What attracts me most about Solana is that I press it and it happens";
Looking back now, these two experiences from outside the circle to inside the circle, and then from "BTC Maxi" to joining Solana, are both turning points and advantages - it connects the old-timers in the crypto circle and the traditional elites in Silicon Valley, and also gives more people reasons to re-examine Solana, which undoubtedly brings Solana potential variables that cannot be ignored.
When FTX was in turmoil last year, the regulatory direction of the entire market also changed. Lily Liu decided to increase investment in the Chinese-speaking region and the Asia-Pacific market. Solana also took different steps this year accordingly. Foresight News had the honor of conducting an exclusive interview with Lily Liu on September 10, 2023. The transcript of the interview is compiled here for readers.
From Wall Street to the crypto world, from “BTC Maxi” to Solana
From Wall Street to the crypto community, from “BTC Maxi” to joining Solana, in Lily Liu’s eyes, “Solana offers a completely different choice,” as she said when answering why she is optimistic about Solana:
"I press it and it happens."
She believes that so far, only a very few blockchain projects have both strong communities and technology, and Solana is one of them - providing a new growth model suitable for the decentralized ecosystem, rather than relying solely on the traditional methods of Silicon Valley or the Web2 industry.
Foresight News: Hello, Professor Lily. I am very happy to have the opportunity to interview you. First of all, could you please give a brief introduction of yourself? Secondly, I did some research and found that you graduated from Stanford and Harvard University. In the early stage of your career, you worked at Morgan Stanley, McKinsey and KKR. These are all top companies in traditional industries. What opportunity made you learn about the blockchain industry and start a business in this industry?
Lily Liu: Thank you for the interview with ForesightNews. Hello, Chinese readers. I am Lily. You can also call me by my Chinese name: Liu Yuanli. Although I was born in the United States, I have always had a strong connection with China and am proud of my Chinese cultural background. I joined the blockchain industry in 2013 and currently serve as the chairman of the Solana Foundation. I started my career at Morgan Stanley Hong Kong Investment Bank, and then my first full-time job was at McKinsey, working in New York and Beijing, around 2005 to 2008. Later, I participated in a private equity fund KKR, mainly working in New York.
Through this job at KKR, I met the Frist family in Tennessee, USA (Foresight News Note: The Frist family started to create HCA, one of the world's largest private medical chains, in the 1960s). They also opened a private hospital in China, and I participated in their international standard hospital project in Cixi, Zhejiang Province, China, which has 500 beds. So in fact, my first entrepreneurial venture had nothing to do with technology, but with the medical industry.
In 2013, I was still living in Shanghai. I had a good friend named Bobby Lee (Foresight News Note: Li Qiyuan, co-founder of "Bitcoin China" and brother of Litecoin founder Li Qiwei). He was well-known in the Bitcoin field. Bobby Lee and I were alumni of Stanford University, and we became good friends when we were in Shanghai.
One day, Bobby Lee mentioned Bitcoin to me. At that time, my understanding of Bitcoin was still superficial. I thought it might be related to money laundering or the drug market, and I said to him, "Bobby, you shouldn't play with Bitcoin." But he kept mentioning it and advised me not to ignore Bitcoin. It can be said that this was the first time I felt a religious enthusiasm in the field of Bitcoin.
With his repeated recommendations, I decided to study Bitcoin seriously. I read the Bitcoin white paper and studied it for a while, and gradually realized that Bitcoin was very profound and interesting in terms of technology, theory, and the concept of decentralization. At that time, there were only a few currencies such as Bitcoin and Litecoin from 2013 to 2014.
In 2014, I left the hospital and joined Bitcoin China (BTCC) founded by Bobby. After working at BTCC for about four to five months, I returned to the United States and met a man named Balaji S. Srinivasan, who ran a mining company called 21 Inc. At that time, there were only a few mining companies in the United States, and 21 Inc was one of them. At that time, the market was gradually going bearish, and many companies faced the challenge of insufficient financial planning. Balaji S. Srinivasan and I worked hard to help 21 Inc alleviate the financial pressure. Later, they changed their name to Earn.com and sold it to Coinbase in 2018.
During that time, I was mainly focused on Bitcoin and was very interested in it because there were not many other technology options. Many applications and use cases were seen as dreams, and the possibility of future decentralized technology was only discussed on Bitcointalk or in articles. Bitcoin proved that a decentralized network can exist, but it cannot support more use cases. If you want to really run some scenarios, you have to wait for an hour to receive funds, which still needs a lot of optimization compared to the traditional financial system.
Therefore, I think that after the emergence of Ethereum, it expanded the various use cases that can be achieved in the crypto field. However, Ethereum also has a problem. Although its transaction speed is faster than Bitcoin, it is not as fast as our traditional financial transactions. In fact, no matter how the technology behind this works, the United States and China have independent payment systems similar to PayPal and WeChat Pay, and these traditional payment methods still have advantages in user experience.
Foresight News: What do you think is the biggest difference between this industry and traditional industries? After several rounds of bull and bear markets, what attracts you to continue building in this industry?
Lily Liu: I think the biggest difference is the entrepreneurial culture. Traditional companies usually do not take innovation or entrepreneurship as their core strengths, and their goals are usually not innovation or entrepreneurship. In contrast, the core culture of Silicon Valley is innovation and entrepreneurship.
I think blockchain is one of the most extreme industries in the technology field because its ultimate goal is decentralization. Unlike the centralized Silicon Valley business model, blockchain has a very strong concept of decentralization. In a way, it is a bit like socialism and a bit like capitalism because it has a certain control nature, which is why I am interested in the theory of blockchain - I think it provides a different way to think about social choices.
For those who were involved in the Bitcoin industry in 2013 and 2014, I think they were driven by at least one (and possibly two) of the following three reasons: the concept of blockchain, involvement in drug trafficking or money laundering, and technology.
For me, I was mainly interested in the concept of blockchain, and at that time, if someone truly believed in the idea of decentralization, it would be difficult to leave the crypto industry because you couldn't find other places that fit this culture and thinking. So, I felt that I didn't have much other choice but to continue working in this field.
Why Solana is promising? “I press it and it happens”
Foresight News: As a former BTC Maxi and an early contributor to the industry, what led you to learn about Solana and later decide to join the Solana Foundation? What role does joining the Solana Foundation play in your career?
Lily Liu: I started using Solana in 2021, and the reason why I am optimistic about it is simple. I press it and it happens. This is an experience that we are already very familiar with in Web2 - you press a button and you will immediately see the corresponding response. You don’t need to consider whether the cost is one dollar or two dollars. It is almost free.
If blockchain cannot provide this kind of user-friendly experience, then large-scale application of blockchain will be almost impossible.
In addition, since the public chain boom in 2017 and 2018, many different blockchain projects have emerged, but I believe that for a blockchain project to be successful, it needs to be very strong in two aspects: community and technology.
However, so far, only a few blockchain projects have both a strong community and technology. First, it must have a solid technical foundation and technical standards. Second, it needs to build a complete ecosystem and attract developers.
Even though there are many different blockchain projects out there, there are really only about 4 or 5 that excel at this, one of which is Bitcoin, another is Ethereum, a third is Solana, and then there are a few that may have potential, like Cosmos, Polkadot, or Near.
Although I think there are many different ideas in the blockchain field, there are probably less than 5 projects that have the technology, culture, and ecosystem at the same time. In the original Ethereum-based expansion practice, everyone may have assumed that transactions cannot be completely placed on the main chain. For non-technical people like me, this challenge is very interesting - how to find some special growth models in a decentralized ecosystem. Solana provides a new growth model suitable for decentralized ecosystems, which does not rely on the traditional methods of Silicon Valley or the Web2 industry.
Foresight News: What is the biggest commonality among your colleagues while working at the Solana Foundation? Are there any events or colleagues that left a deep impression on you?
Lily Liu: I really like the working culture of the Solana Foundation and it is a pleasure to work with everyone. I feel that most of my colleagues at the Solana Foundation truly believe in decentralization and implement it seriously, which is also a core consideration in our work.
Many of the blockchain projects that emerged in 2017 and 2018 ultimately went in two directions: either enterprise blockchain or EVM-compatible. There is not much possibility of re-establishing an independent technical system and community ecology.
If you want to really do it, you need the technology on the one hand and the belief on the other.
Asia Pacific + Europe and the United States is a decentralized collaboration in a macro sense
Lily Liu believes that the blockchain industry only has two major markets: the Western market dominated by the United States and the Asia-Pacific market dominated by the Chinese-speaking region. Only these two major markets have both a strong developer community and a capital market with sufficient financial support.
In addition, she also emphasized that the market may be more inclined towards Asia-Pacific, while technology may be more inclined towards the West. "Independent developers are the core assets of blockchain." In any case, the developer market is the most important.
Foresight News: I understand that you are Chinese American, but you have worked and lived in various cities in Asia for many years, speak Chinese very well, and even studied East Asian culture in college. From your perspective, what is the biggest feature of the Asia-Pacific market compared to Europe and the United States? What are the biggest advantages and disadvantages in the development of Web3?
Lily Liu: I think there are two big markets in the blockchain industry, one is the Western blockchain market led by the United States, and the other is the Asian blockchain market led by the Chinese-speaking region. Only these two big markets have both a strong developer community and a capital market with sufficient financial support.
The Chinese-speaking market is very important. Although sometimes there are many restrictions due to policy reasons, it has always been attractive. If compared, I think the big market in the West may be more inclined to core technology, and many deeply developed blockchain projects may be more inclined to the West, like Silicon Valley or Europe. But in terms of the market, Asia may be stronger because Asia has a huge population, consumer potential, and Asia plays a core role in the operation of exchanges. In fact, about 80% to 90% of the transaction flow is now carried out through some exchanges in Asia.
In short, the market may be in Asia-Pacific, while the technology may be more Western. The two markets are not completely separate, and there is still a certain degree of integration between them. Of course, there are certain cultural differences between the two markets.
If you talk to some American projects, at least half of them may not have a deep concept of the role of the Asia-Pacific region. Therefore, in the blockchain industry, we need to understand more about the characteristics of each region. Different regions play different roles in international cooperation. In fact, sometimes projects and markets in different regions do not realize that they are cooperating. This also reflects the decentralized collaboration in the broader geographical sense of Web3. Different nodes in the blockchain industry play different roles, and ultimately they work together, although their understanding of each other may not always be completely consistent.
We mentioned within Solana that more than 80% of SOL's core transaction traffic goes through some exchanges in the Asia-Pacific region. Some of our colleagues were very surprised. They had never noticed it before and never thought that this proportion would be so high.
Foresight News: We have observed that Solana is very active in the North American and European markets, with strong consensus among developers and users. However, in Asia Pacific, especially in the Chinese-speaking region, the exposure and activity were relatively limited. This year, we clearly feel that Solana is gaining more and more attention in this market, with more and more people discussing Solana. Is this related to the strategic change of the Solana Foundation itself? What role do you play in this transformation?
Lily Liu: I joined the Solana Foundation in 2021 and have always hoped to have the opportunity to help Solana develop in the Asia-Pacific region.
In the past two years, many things have happened in the world and in the crypto industry, and we have not found the right opportunity. So we actually thought about it for a long time and waited for a long time until the end of last year and the beginning of this year, when an opportunity that we could give priority to appeared. We have been paying close attention to market changes, and the changes in Hong Kong's policies have made us feel that the Chinese-speaking market seems to be beginning to open up again.
We have built a relatively good ecosystem in the Chinese-speaking region in the past, but in the past few years, due to the influence of some macro-environment and the FTX incident at the end of last year, we decided to increase our investment in the Chinese-speaking region and the Asia-Pacific region in February and March of this year.
Foresight News: What do you think about the importance of the Asia-Pacific market to Solana’s long-term development?
Lily Liu: Very important. We spent two years in India to build a developer-focused growth strategy, and we are also expanding internationally in Europe, especially in Germany and the UK. Although these markets are important, they are not as well-developed and balanced as the Asia-Pacific region, which has both developer resources and the foundation for capital market development.
Our internal judgment framework is the labor market (Labor Market) and the capital market (Capital Market).
The labor market mainly refers to the developer market. In the blockchain field, the most core asset is independent developers, so the developer market is the most important anyway.
There are many such developer markets around the world, such as Silicon Valley, New York, India, and Germany, but few have the attributes of a labor market while also tending toward a capital market.
There are only two markets that have both strong labor markets and capital markets: one is the US market, and the other is the Chinese-speaking market.
Solana is preparing some killer moves
On the one hand, Solana continues to focus on hackathons and developer ecosystems. On the other hand, Solana has many innovations in progress, and it is expected that the results will begin to show by the end of this year or early next year.
Foresight News: From the data of the past six months, Solana has made a great recovery in terms of both technological progress and TVL increase. From your perspective, what is the biggest change in Solana in the past six months? What is the core reason why the Solana ecosystem maintains strong resilience?
Another aspect is Solana’s exposure in the media in the Asia-Pacific region. Perhaps six months ago, or even a year ago, we probably wouldn’t have conducted such an interview because Solana had relatively little exposure in the media.
Lily Liu: I think the main focus is on developers. For example, earlier this month we launched a new hackathon called "Solana Hyperdrive".
Foresight News: The current public chain competition landscape has changed a lot compared to a year ago. Layer2 projects are developing rapidly, the EVM ecosystem also has a strong first-mover advantage, and new public chain projects are emerging in an endless stream. The high-performance narrative seems to be less sexy. How do you view the current competition? In such a competitive environment, what measures has Solana taken in terms of positioning and strategy adjustment? In which sub-sectors will Solana increase investment and attention at present?
Lily Liu: First of all, let’s talk about why we need a high-performance public chain. I think this is a self-evident question. The reason why I am interested in Solana is because I hope that blockchain can realize various use cases, and many of them require high performance.
We are now accustomed to the Ethereum mainnet, which is a bit like when we used to use a 56K modem to access the Internet. More than 20 years ago, the Internet still required a telephone line connection, and it might take half an hour to download a song, which is very similar to the situation when we use blockchain now. Insufficient performance is a problem that must be solved.
The second question is about what kind of solution can achieve the best user experience. I think Layer2 is suitable for Ethereum and is a good solution, but it still has some problems, just like when broadband Internet appeared, we no longer need to install new modules every time we use different applications.
As for the development of Solana, there will be some new progress at the end of this year or early next year. I think some of the important innovations include "Firedancer", which can reach 1 million TPS during internal testing. Of course, it may reach 100,000 TPS during actual operation, which can meet the needs of high-frequency trading applications.
And these are all implemented on the Solana main chain. From a technical point of view, this will also make Solana another blockchain outside of Ethereum with multiple completely independent validator clients.
Another innovation is also at the technical level. State Compression was launched in the first half of this year. Its most obvious effect is to reduce the cost of NFT.
Now if you want to mint 100,000 NFTs on Solana, it only costs $100, while it may cost $500,000 on Ethereum, which is a huge gap. This is not only a cost issue, but more importantly, by reducing costs, performance is no longer just performance, it also expands the space for innovation.
If it only costs $100 to create 100,000 NFTs, then NFTs can move from an application to an infrastructure, which means NFTs can be used for more use cases.
For example, you can use NFT as part of your wallet, which was not possible before, so Solana's performance and this cost reduction can turn NFT into an infrastructure, thereby expanding its application range.
In short, state compression is a major technological advancement this year, which reduces the cost of using blockchain, thereby expanding the space for innovation and helping blockchain technology to be more widely used in various fields.
Bear market is the best time for Builder
Lily Liu believes that hackathons provide a place for the best independent developers in the industry to exchange ideas and help generate some interesting ideas.
Foresight News: We learned that Solana’s autumn hackathon this year has been launched, with a prize pool of up to 1 million US dollars. In such a market environment, it is a very large investment. Solana hackathon is very well-known in the industry and has produced many star projects. From your perspective, what is the biggest difference between Solana hackathon and other hackathons? What resources will Solana provide to the winners of the hackathon?
Lily Liu: Yes, hackathons not only provide rewards, but also provide an opportunity to bring developers together to innovate and compete together. It also focuses all the energy in a period of time. We have been doing this for the past few years and it has been very successful. This not only helps innovation, but also helps build the community.
We usually divide our time into two parts, half for development and project training, and the other half for community activation and developer collaboration. This helps encourage creative collisions between independent developers and provides them with a conducive environment to explore interesting ideas together, which also promotes broader community interaction and cooperation.
Foresight News: What advice can you give to builders in the industry?
Lily Liu: This is the third bear market I have experienced since I joined the industry. I think the bear market is the best time for Builder. Although everyone’s mood may become very pessimistic, it is also a good time to innovate and think about future opportunities.
In a bear market, people have more time and opportunities to delve into the essence of blockchain technology, understand why this technology is so important, and explore the potential for innovation and application. It is a valuable time to think about problems, come up with new ideas, and build valuable projects.
While it is unclear how long the bear market will last, the market will change sooner or later.
