After graduating from Ant Group, they flock to Web3

Following their graduation from Ant Group, they gravitate towards Web3

The two technological revolutions that are highly regarded in the tech industry are AI and Web3. AI is expected to reshape productivity, while Web3 is expected to reshape production relationships.

In 2023, the tech world is filled with heavyweight news almost every day. It is the year of generative AI and the year where Web3 gains deeper footing.

• Is the ‘big thunderstorm’ in the encryption industry resolved? Binance may pay a $4 billion fine to the US Department of Justice for settlement.
• Crypto Shakeup: Altman’s Ousting and the World of Worldcoin
• 1984 A Timeless Masterpiece that Deserves a Revisit

The total amount of funding for Web3 in 2023 is only $3.6 billion, a 78% decrease compared to the nearly $16 billion in 2022. On the other hand, funding for AI in the first half of the year reached $25 billion. LianGuairadigm, one of the largest crypto venture capital firms, has undergone a paradigm shift, no longer focusing solely on crypto and Web3, but expanding its focus to AI.

Those who once thought “Web3 is the new sexy” now find “Web3 no longer sexy” and turn their attention to AI.

However, it must be admitted that this Web3 bear market is more lively than before. Even in a bear market, people still discuss compliance, zero-knowledge proofs (ZKP), and Bitcoin ETFs. Some people choose to enter the market at this moment.

“When I was at Ants, I often compared AI and Web3 with my colleagues because their development trajectories are similar,” said Jerry Li. In the past 60 years, there have been three waves of artificial intelligence, each with billions to hundreds of billions of funds invested, with continuous cycles of highs and lows until the emergence of OpenAI. “This new large-scale technological revolution needs to go through multiple cycles to truly bring about leaps in development.“

Jerry Li has had several notable labels: former Chief Architect of Ant Blockchain, former Apple China R&D Director, and Shanxi Province’s top scorer on the college entrance exam. Now, he has added another label-Web3 rookie.

Of course, strictly speaking, Jerry is not a Web3 newcomer. After graduating from Tsinghua University, Jerry worked in Silicon Valley for more than 10 years. He returned to Shanghai in 2015 to establish Apple’s Asia-Pacific R&D center. In 2017, Jerry joined “Ant Blockchain,” which had not yet been upgraded to “Ant Chain,” with a position level of P10.

“The industry is still in its early stages, compared to AI, it hasn’t reached its previous round of development. The total market value of the entire cryptocurrency market is still less than half the market value of Apple alone.” Jerry compared to his former employer, it seems like the cake in Web3 is still too small.

Of course, compared to the over fifty-year-old AI, Web3 seems to still be in its teenage years.

The concept of Web3 was first proposed in 2014 as the predecessor to “cryptocurrency” and “blockchain”, but it was not until 2008, through Satoshi Nakamoto’s “Bitcoin White Paper,” that it was first released, just 15 years ago.

Rebellious, unstable, Web3 is going through a period of pain that makes the “parents” shake their heads. After the FTX, with a market value of $32 billion, collapsed in November last year, regulations around the world began to put a tight clamp on this “mischievous child.”

At this critical moment, by the end of 2022, Jerry left AntChain and officially went all in on Web3, starting his entrepreneurial public chain project, Artela. He said that he wouldn’t consider doing anything else in the short term. When asked about the reason, Jerry used Ant’s famous saying: “Because I believe, I see.”

Artela’s team chose the public chain track, which belongs to the foundation of Web3 and is also known as Web3’s “highway.” There must be roads to transport everything.

In the public chain track, there are long-established Web3 genesis projects like Ethereum, which have already built their moats with the “network effect” of their ecosystems, and there are also multiple celebrity projects that were born with silver spoons in their mouths.

Now, choosing a relatively crowded track, Jerry spoke with the WSJ about his views on “first-mover advantage.”

“Although the public chain market has a lot of competition, it’s still far from perfect and there is still a long way to go.” Recently, Jerry has been running around the world. This is his first step in adapting to his new role. After communicating with many projects, our confidence has actually increased.”

Artela’s biggest difference from other chains is not in the somewhat “insular” scalability, but in extensibility in terms of functionality, and it is also compatible with the Ethereum Virtual Machine (EVM), so developers can easily migrate applications.

This is to prepare for future mass adoption.

Mass Adoption is a term that people in the Web3 community often mention. In other contexts, it can also be described as the “iPhone moment” of the industry or the “last mile.” But the core issue is clear: how can we make Web3 accessible to ordinary people?

The Ant “Gang” played a significant role in shaping Mass Adoption during the era of the internet. In their context, Mass Adoption is more akin to building another “Alipay” in Web3.

Of course, they have a wealth of experience. Artela’s CTO, Qiu Honglin (nickname: CP), previously worked on the underlying architecture support for Ant’s digital collectibles platform, Whale Hunt. He mentioned that Whale Hunt had already achieved daily active users in the hundreds of millions through the Chinese New Year’s “Collect All Five” campaign. “At that time, we were already processing billions of transactions on the blockchain, while Ethereum was only in the millions. From a certain perspective, Ant Chain had truly achieved Mass Adoption.”

CP was one of the original team members of Ant Chain and joined in 2015 when it was still an incubation group fueled by interests.

“They used to say, if anyone in Ant wanted to talk about blockchain, my name would definitely come up after the second person.” CP, with slightly curly hair and a hint of Guangdong accent in his speech, seems to be casually chatting, but upon careful listening, his explanations are very professional and detailed. “Ant Chain has the highest number of patents globally, and I personally hold hundreds of blockchain patents.”

Regarding Extensibility, CP gave an example: “In games, apart from players’ front-end inputs, there is also the back-end, such as refreshing maps, time and weather changes, or when a big boss dies, the nearby small monsters are also eliminated. However, blockchain does not have back-end tasks because all the execution on the blockchain needs to be interacted with by users.”

In the future, running Fully On-Chain Games on Artela may become “the Earth keeps spinning even without you,” where players design the rules and the system automatically executes them.

For blockchain, which currently struggles with lag in playing chess games, higher demands are placed on the computing layer to achieve smooth interaction. “We want to achieve 100 times of EVM’s performance.” Thanks to the experience accumulated on Ant Chain, CP added, “Actually, current test data shows that we are already approaching a performance level that is two orders of magnitude higher.”

However, they do not aim to replace Ethereum. Projects on the Ethereum blockchain can easily migrate to Artela. CP abstractly summarized Artela’s attributes by saying, “If we liken the EVM to the CPU of the blockchain, then we are adding a GPU on the blockchain.” In simpler terms, we will be able to play large-scale games on the blockchain in the future.

“The Borrow and Spend of the Internet Finance era, such as Jiebei and Huabei, are innovations from 0 to 1. We, this group of people, have experienced the process from a vague concept to a concrete commercial product and understand the complexity behind it.” CP believes that, walking the same path again in the era of public chain, will bring many challenges, but fortunately, there is experience to refer to.

Most of Artela’s team members come from Ant Group. “A very tacit team of a dozen people, with progress similar to that of a team of twenty-plus people.” Established just a few months ago, Artela has already raised $6 million in seed funding, led by Shima Capital, with participation from A&T Capital, Big Brain Holdings, SevenX Ventures, Dispersion Capital, Amino Capital, and others.

Artela’s test network has already launched in September and is selectively inviting current ecosystem partners. Defi and fully on-chain games may be the future areas of focus. CP says that Artela does not plan to do airdrops and conventional combinations like other public chains, but rather aims to explore innovation with ecosystem applications. They will focus on development in the next few months and plan for a formal public beta around December.

Without a doubt, AntChain has already reached its ceiling in certain aspects of Web3, with the ability to stably handle hundreds of millions of daily active users. However, their activity is somewhat isolated from Web3.

Just as the decentralization of Web3 should bring “open source” rather than “patents.” Compared to the mainstream direction of public chains in foreign countries, the consortium chain, which is more suitable for the domestic context and is also called permissioned blockchain, does not quite fit in. AntChain wants to establish a different kind of Web3 in China, an open consortium chain, an industry Web3.

As early as 2017, Ant Group already believed in the future of blockchain. At that time, the industry was not yet formed, but Ant saw blockchain as a core strategic priority. “At that time, Ant said they wanted to invest in it, but not many people actually understood it. We were a small team. After reading a lot of foreign literature and reports, I realized that this thing has a lot of potential, especially with financial applications in a globalized context. I think it’s particularly valuable.”

Jerry, who serves as the Chief Architect, started studying the whitepapers of Bitcoin and Ethereum. As his research deepened, he became more and more convinced that blockchain is the next stage of “using technology to serve finance.”

That same year, Jiang Guofei, the “number one” of AntChain, joined Ant Financial and served as the Vice President and President of the Financial Technology Business Unit, overseeing AntChain. AntChain’s strategic position within the group continued to rise. AntChain gained momentum and witnessed the comprehensive implementation of applications based on the industry, such as cross-border remittances, supply chain finance, electronic bills, and judicial notarization.

In 2018, Alipay Hong Kong launched a cross-border remittance feature based on blockchain technology. Over 180,000 Filipino workers can now send their salaries back home without waiting for days or paying high cross-border fees. Ant Financial has been successful in achieving inclusive finance through this solution.

CP, the engineer, also became a company Internet celebrity. Jack Ma mentioned CP during the second World Artificial Intelligence Conference and talked about his popular blind date story.

“We have an engineer at Ant Financial who listed himself as an ‘engineer’ and a code-writing coder on his dating resume. But no one clicked on his resume, and girls were not interested. Later, he changed his resume to say he is a ‘blockchain engineer’ and received over 200 love letters.”

In 2020, Ant Blockchain announced a rebranding to AntChain, and the company executives stated that this decision was “as significant as the decision to establish Alipay”.

However, after 3 years, AntChain, which focuses on Web3 industry, has not yet achieved an “Alipay” level application.

Regarding cross-border remittance, an Ant representative told WSJ that there are no technical barriers, but each country’s policies and regulations have different levels of support for this technology. Therefore, such projects are closer to customization. “We collaborated with Standard Chartered Bank, our long-term partner at that time.”

Even Whalesearch, which has hundreds of millions of daily users during the Spring Festival, faces the challenge of unsold collections and difficulty in expanding its reach. Previously, Whalesearch launched digital art collections that are predominantly humanistic, which does not resonate well with young people. “But my dad likes them. It’s the only product I’ve made that he keeps using.” CP’s work is of great interest to his family, and Whalesearch is perhaps the most understandable product to them.

“Although Ant Financial is already very advanced in financial technology, the domestic regulatory framework is mainly focused on consortium chains. This actually removes the essence of blockchain, which is the representation of value through digital assets. I believe that in the future, we should go down the path of public chains, but public chains currently do not have a fertile ground in China.” Jerry is more optimistic about the future of public chains.

Consortium chains, without the concept of digital assets, lack proper asset ownership incentive. “Consortium chains only take care of the data aspect. To truly reconstruct production relationships, I think we are still far from that stage.”

“To truly implement a commercial scenario, having a blockchain is not enough. There are still many technical support links that are not in place, so it is still quite difficult to run end-to-end. In fact, current application scenarios only need a database with permission settings. If you insist on using a blockchain system, it seems a bit redundant.”

CP has experience in building multiple alliance chain application scenarios. He gives an example of using blockchain technology for food traceability, which was originally expected to eradicate problems like “tainted milk powder” and other food violations.

But the reality is, no one is willing to pay for a better system. “Food traceability, from food production and overseas transportation to platform sales, is a supply chain matter. Everyone needs to join the blockchain to work, but when it finally reaches the hands of consumers, the price remains the same.”

“Many companies in the supply chain are passively involved, without consensus.” Consensus is the core driving force of Web3 and the secret to achieving more with less effort, but the market is far from reaching that level.

Before gaining “consensus,” the alliance chain seems to foreseeably remain in an awkward position. Unknown to outsiders, disliked by insiders.

At Ant Group, Jerry joined an interest group related to public chains, and CP was also a part of it. Today, this interest group has once again become the initial nurturing ground for projects.

In March of this year, CP left and joined Artela, which is his first entrepreneurial experience. “Actually, every year there are Web3 projects that approach me, and I always seriously consider them for a while because I haven’t started a business before. But this opportunity with Artela, I didn’t think about it for long.”CP’s reason is that he believes the team is more important than anything else in entrepreneurship, “especially in Web3.” Within the industry, he has heard many stories about the negative consequences of neglecting the team.

During this meeting with the “WSJ,” when he mentioned his previous identity as an “internet-famous engineer,” CP laughed and said, “I’m already past my prime.” CP now wears a Mobius strip ring on his ring finger, bidding farewell to his past blind date stories. His career and life have entered the next phase.

Dr. Chen Jidong (nickname: Pi Dong), a committee member of the Big Data Expert Committee of the China Computer Federation and someone who has been deeply involved in AI for nearly 20 years, is also a “newcomer” to Web3. Pi Dong previously had a more widely known resume — the founder of Alipay’s facial recognition payment and Ant Shield’s anti-fraud defense, with the rank of P10.

He sees great potential in the combination of Web3 and AI. He established the Web3 security project Trusta Labs in October last year, which aims to compete with Alipay’s “Zhima Credit” product.

Pi Dong joined Ant Group’s blockchain team in 2017, responsible for commercializing security technology in the blockchain field. Prior to joining Web3, their team operated independently from Ant’s operations, with a closer resemblance to a startup. Therefore, Pi Dong has rich experience in technology, business, and expanding into international markets.

But now, when the wind blows towards AI, Pi Dong chooses to be a rebel.

Full of anticipation, Pi Dong went to “study” Web3 with CP. After researching for half a year, Pi Dong decided to bring his AI expertise into Web3. In less than a month since its establishment, Trusta Labs won the championship at the Gitcoin Open Data Hackathon.

With the rise of compliance, this time, AntChain’s architecture has also expanded to include compliance Web3, taking two steps forward.

According to sources close to Ant Group who told the WSJ, Ant Group has internally invited people to give a series of Web3 lectures, “They don’t want to miss this opportunity.”

In April, AntChain open-sourced its cross-chain protocol, announced compatibility with Ethereum and other ecosystem protocols, and reached a collaboration with Conflux, the only compliant public chain in China. This means that AntChain’s open consortium chain will further support the Web3 ecosystem.

Industrial Web3 is still ongoing and won’t stop. If helping companies build apps is compared to “building a building,” the next step is “building roads,” that is, achieving data circulation and providing incentives in a non-token way.

“We don’t believe that Web3 is about launching a token and then exploring business models.” explained an Ant representative.

“Multi-party incentives are the spirit of industrial Web3, but it doesn’t necessarily have to be done through tokens. Why do we have to use tokens for incentives? It’s because the foreign community consists of strangers. But we do business in the domestic industrial field, and it’s impossible that we don’t know each other. In the B2B industry, it’s all about acquaintances, so it’s not necessary to use tokens. We can still achieve rapid asset circulation and gain trust from all parties.”

And for the Hong Kong and overseas markets focused on developing compliant Web3, AntChain has also made new moves. On September 8th, at the Bund Summit, Ant released a new Web3 product, ZAN. ZAN provides technical solutions for Web3, with a focus on secure and compliant products. Former AntChain CTO Zhang Hui serves as ZAN CEO and is now based overseas.

ZAN is a team of dozens of people, with technical support from AntChain, and is currently recruiting on a small scale externally. What’s different is that ZAN doesn’t mention the number of patents or industrial blockchains, but rather focuses on open source and RWA (compliant asset issuance).

“We have actually been paying attention, but we were just waiting for the right time.” said an Ant representative, ZAN was not a hasty decision.

In fact, it’s not just Ant. Huawei, Tencent, and other big tech companies have also chosen to “forge ahead” this year.

Huawei Cloud has frequent appearances at various summits in Singapore, Hong Kong, and more, and held a “TechWave Web3.0 Special Day” at the Hong Kong Cyberport, where they announced a series of blockchain services such as Web3.0 Node Engine Service NES and QingTian Enclave Confidential Computing.

“Goose Factory Gang” is more well-known. Cai Yige, the former head of Tencent Blockchain, resigned earlier this year and founded the Web3 wallet Punk Code. In addition, there are many employees from business lines such as Magic Core and Zhi Xin Chain who are more involved in blockchain and the metaverse turning to Web3 startups.

“In 2021, there was a lot of money, but the projects were chaotic. Many well-known people in the industry ended up in failure.” Jerry started interacting with investors in October last year, when the financing window was still open.

“If you start this year, it may be difficult to even launch the project.” According to the WSJ, another major company born in Web3 faced significant difficulties when seeking financing this year.

“It’s neither too early nor too late.” For long-termists who have raised funds, perhaps now is a good time.

“In the previous cycles, blockchain was not considered an industry.” Kevin, another co-founder of Artela, studied psychology at Fudan University and worked at Ant for more than a year before joining the family office at Alibaba as a senior investment manager. Out of personal interest, he entered the Bitcoin and Ethereum communities to participate in activities as early as 2016.

Kevin gives the impression of being more like an initial encryption enthusiast in the industry. He doesn’t like to be in the spotlight, but always has deep connections with the industry. In Web3 jargon, Kevin is very “Crypto Native”.

“At that time, there was no concept of a bear market or bull market. The community atmosphere was really different from now. People gathered together to discuss economics and currency decentralization.”

Kevin later became completely disillusioned with the industry due to the ICO frenzy in 2017 and 2018, describing it as a “misplacement of idealism.” He sold most of his coins and turned to entrepreneurship in the AI education field, where he also obtained financing. However, the education industry was also hit, and Kevin went on to study for a master’s degree at Columbia University.

Now, he has returned to Web3. “Because I see the public chain has developed to this stage, if we want to take it to the next level of mass adoption, what I have done, seen, and experienced in other industries happens to be what they need. That’s my motivation. I still have a strong builder mentality, so even though the market conditions are poor, if this thing has meaning, I will do it.”

“The development of things is still a tortuous process. One important thing that this industry has taught me is not to make value judgments.” Kevin explained.

“Aliens sent a piece of code, and everyone translated it into frog eggs. But what exactly do frog eggs represent? I tend to believe that when this industry really “builds” or when it has a driving force, it will develop and grow on its own, and then produce some unexpected things. I think this process must be meaningful.”

“Entrepreneurship is fragile, but personal motivation is not. The foundation of the Web3 industry is still there, so as long as you grow with it, it’s fine.”

Kevin is a big fan of the science fiction novel “The Voice of Its Master,” which is about humans receiving signals from extraterrestrial visitors. A part of the signal is seen as a production formula that can create a wonderful organic substance called “frog eggs,” but no one can decode the information contained in the frog eggs.

Mapping it to reality, the emergence of the Bitcoin whitepaper seems to be a signal from extraterrestrial visitors. The value of Bitcoin is the “frog eggs.” What exactly will Bitcoin bring to humanity? It is a mirror, and each person sees themselves through their own interpretation of it. “The voice of its master is indeed my own voice,” which is a precise summary of this book on Douban.

“To put it abstractly, the key is not to make value judgments but always do beneficial things for the industry.”

Kevin believes that Web3 will become more mainstream as it is embraced by the masses and finds its own position and points of integration, even if it deviates from the initial ideals.

The industry is indeed moving forward. The blockchain industry initially built by crypto geeks has evolved and the name has transitioned from “blockchain” to “Web3.” The industry has become more diverse, with more narratives incorporated, making it easier for people to find their roles within it.

“This time it’s real entrepreneurship. Previously, even though we were in Ants, it was all fake entrepreneurship.” Jerry chuckled. “Previously, Ants had a very good office, with technical and other support from the back-end. Although we always talked about entrepreneurship spirit in Ants, real entrepreneurship is completely different.”

Perhaps the most obvious change is that the office environment has moved from “upstairs” to “underground.”

“Our small team now works in a basement, you know, a real basement.” In addition, Jerry took full responsibility for matters such as renting office space.

The Artela team has rented a 6-person office in a public workspace in Hangzhou. The largest object on the desk, besides computers, is an air purifier. There are no windows and there are green plants, but no sunlight. “We all call ourselves Underground,” CP joked.

In this interview with WSJ, the interviewees all mentioned the same question. “Will the experience advantage accumulated in Ant Chain have a diminishing impact on Web3?” They all denied it repeatedly.

In Web3, they are not called “founders,” but rather “founders” or “early builders.” The organizational structure is no longer a “company system,” but a “DAO.” These are all things that these “old newbies” find novel. Jerry is still learning how to transition from Web2 to Web3. “We still need to have a sense of awe for the industry. Web3 has many concepts, values, and community cultures. If we directly transplant some things from Web2, it will appear incompatible and out of place. We must avoid this phenomenon.”

Although big companies have a halo, they are also easily questioned by the community for not being “Crypto Native” enough. Jerry said he has heard this term many times. “One aspect is positive, relatively advocating a spirit of freedom. But on the other hand, I think it is not right. Standing in the Web3 community, we should not limit ourselves. If we keep excluding new teams, the Web3 community will never grow.”

Although they have left Ant, for them, Ant is still a fertile land. In September, Artela, Trusta Labs, and Ant Chain’s overseas Web3 project ZAN launched A³DAO together. Public chains, security, solutions, the brother projects form a complementary ecosystem.

It is not yet known when the industry’s “Alipay” moment will arrive, but what is certain is that the Ant “gangsters” will not miss it.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!