Interview with Lily Liu, Chair of Solana Foundation Entering the Asia-Pacific market at the right time, Solana may have new moves by the end of the year

Interview with Lily Liu, Chair of Solana Foundation, on Solana's plans for the Asia-Pacific market

From Wall Street to the crypto circle, from “BTC Maxi” to Solana, Lily Liu, who is constantly exploring new stages, has also brought an undeniable variable to Solana.

Interview, compilation: Frank, Foresight News

From Wall Street to the crypto circle, from a Bitcoin maximalist to the Chair of the Solana Foundation, which transformation is more significant?

Perhaps Lily Liu herself can’t say for sure. After entering the workplace in early 2005, she successively worked at top traditional financial institutions such as Morgan Stanley, McKinsey, KKR, and HCA. Originally, she was just a typical traditional elite following the rules. However, under the continuous recommendation of her friend and industry expert Li Qiyuan, she dramatically learned about and got involved in Bitcoin.

• Account abstraction implementation, the on-chain ecosystem will shift towards the buyer’s market.
• A Review of Eight Hot Events in the Cryptocurrency Market in Q3
• Variant联创 Li Jin The main obstacle to the mainstream adoption of cryptocurrencies is the issue of product-market fit.

Since then, as an “old-timer” who started to get involved in Bitcoin in 2013, Lily Liu has been in the crypto industry for a full decade. She has gone from an exchange (BTC China) to the earliest mining company in the United States, 21 Inc (which later changed its name to Earn.com and was acquired by Coinbase), and then joined a public blockchain (Solana). She has always been at the intersection of top resources, experiencing the most real changes in the market, while also observing the industry’s tremendous changes.

• In 2013, “Bobby, you shouldn’t play with Bitcoin”;

• In 2021, “The most attractive thing about Solana is that—it happens when I want it to”;

These two experiences, from outside the circle to inside the circle, and then from being a “BTC Maxi” to joining Solana, looking back now, it is both a turning point and an advantage—it connects the old members of the crypto circle with traditional elites in Silicon Valley, and also gives more reasons for people to re-examine Solana. This undoubtedly brings an undeniable potential variable to Solana.

Amidst the turbulence of the FTX storm last year, the regulatory direction of the entire market also changed. Lily Liu decided to increase investment in the Chinese-speaking and Asia-Pacific markets at the right time. Accordingly, Solana took a different pace this year. Foresight News had the privilege of interviewing Lily Liu on September 10, 2023, and compiled the transcript of the interview here for the readers’ enjoyment.

From Wall Street to the crypto circle, from “BTC Maxi” to Solana

From Wall Street to the crypto circle, from being a “BTC Maxi” to joining Solana, in Lily Liu’s eyes, “Solana offers a completely different choice,” just as she expressed when asked why she is optimistic about Solana:

“It happens when I want it to.”

She believes that so far, only a few blockchain projects have both a strong community and technology, and Solana is one of them—it provides a growth model suitable for decentralized ecosystems, rather than relying solely on the traditional approaches of Silicon Valley or the Web 2.0 industry.

Foresight News: Hello, Teacher Lily. I am very pleased to have the opportunity to interview you. First, could you please give a brief introduction of yourself? Secondly, I did some research and found that you graduated from Stanford and Harvard University, and you have worked at Morgan Stanley, McKinsey, and KKR in the early stages of your career. These are all top companies in traditional industries. What prompted you to learn about the blockchain industry and start a business in this field?

Lily Liu: Thank you for the interview, ForesightNews. Hello to all the Chinese readers, I’m 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 I am proud of my Chinese cultural background. I joined the blockchain industry in 2013 and currently serve as the Chairperson of the Solana Foundation. My career started at Morgan Stanley’s investment banking division in Hong Kong, and my first full-time job was at McKinsey, with work locations in New York and Beijing between 2005 and 2008. Later, I joined a private equity fund called KKR, mainly working in New York.

Through my work at KKR, I got to know the “Frist” family from Tennessee, USA (Foresight News note: The “Frist” family started one of the world’s largest private healthcare chains, HCA, in the 1960s). They also opened a private hospital in China, and I participated in their international standard hospital project in Cixi, Zhejiang Province, which had 500 beds. So my first entrepreneurial experience was actually related to the medical industry, not technology.

In 2013, while I was still living in Shanghai, I had a good friend named Bobby Lee (Foresight News note: Bobby Lee, co-founder of “BTCChina,” brother of Litecoin founder Charlie Lee). He had a certain level of fame in the Bitcoin field, and Bobby Lee and I were alumni of Stanford University. 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 shallow, and I thought it might be related to money laundering or the drug market. I even told him, “Bobby, you shouldn’t play with Bitcoin.” But he kept mentioning it and advised me not to overlook Bitcoin. It can be said that this was the first time I felt a religious-like enthusiasm in the Bitcoin field.

Under his repeated recommendations, I decided to seriously study Bitcoin. I read the Bitcoin white paper and studied it for a while, gradually realizing how profound and interesting Bitcoin was in terms of technology, theory, and the concept of decentralization. At that time, in 2013 to 2014, there were only a few cryptocurrencies like Bitcoin and Litecoin.

In 2014, I left the hospital and joined “BTCChina” (BTCC) founded by Bobby. After working at BTCC for about four to five months, I returned to the United States and met a person named Balaji S. Srinivasan, who was running 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. It was during a bear market, and many companies faced challenges in financial planning. Balaji S. Srinivasan and I worked together to help 21 Inc alleviate its financial pressure, and later they changed their name to Earn.com and were sold to Coinbase in 2018.

During that time, I was mainly focused on Bitcoin and was very interested in it because there weren’t many other technological choices. Many applications and use cases were seen as dreams, only discussed on Bitcointalk or in articles about the possibilities of decentralized technology in the future. Bitcoin proved that a decentralized network can exist, but it cannot support more use cases. If you want to run certain scenarios, it takes an hour to receive funds, which needs significant optimization compared to traditional financial systems.

Therefore, I believe that after Ethereum appeared, it expanded the various use cases that can be achieved in the cryptographic 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, regardless of how the underlying technology operates, both the United States and China have independent payment systems similar to LianGuaiyLianGuail and WeChat Pay, which still have advantages in user experience.

Foresight News: What do you think is the biggest difference between this industry and traditional industries? What attracts you to continue building in this industry after experiencing several bull and bear cycles?

Lily Liu: I think the biggest difference is the culture of entrepreneurship. Traditional companies usually do not consider 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 believe that blockchain is one of the most extreme industries in the field of technology because its ultimate goal is decentralization, which is different from the centralized business model of Silicon Valley. Blockchain has a very strong emphasis on decentralization. In a way, it is a bit like socialism and a bit like capitalism because it has a certain controlling nature. That’s why I became interested in the theory of blockchain – I think it provides a different way of thinking about social choices.

For those who participated in the Bitcoin industry in 2013 and 2014, I think at least one (possibly two) of the following three reasons drove them to participate, including the idea of blockchain, involvement in drug transactions or money laundering, and technology.

For me, I was mainly interested in the concept of blockchain. At that time, if someone really believed in the concept of decentralization, it would be difficult to leave the cryptocurrency industry because it would be hard to find another place that aligns with this culture and ideology. So, I think I didn’t have many other choices and could only continue working in this field.

Why do I believe in Solana? “I believe, therefore it happens.”

Foresight News: As a former BTC Maxi and early participant and contributor in the industry, what chance made you aware of 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 I am bullish on it is very simple. When I press it, it happens. This is an experience that we are already very familiar with in Web2—when you press a button, you immediately see the corresponding response, and you don’t need to consider whether it costs one dollar or two dollars, it’s almost free.

If blockchain cannot provide this user-friendly experience, it is almost impossible for blockchain to be widely adopted.

In addition, since the boom of public chains in 2017 and 2018, there have been many different blockchain projects. However, I believe that for a blockchain project to be successful, it needs to be strong in two aspects: community and technology.

However, so far, only a few blockchain projects have both a strong community and strong technology. First, it must have a solid technical foundation and technical standards. Second, it needs to establish a complete ecosystem and attract developers.

Although there are currently many different blockchain projects, in reality, only about 4 to 5 projects perform well in this aspect. One is Bitcoin, another is Ethereum, the third is Solana, and then there are some others that may have potential, such as Cosmos, Polkadot, or Near.

Although I think there are many different ideas in the blockchain field, only probably less than 5 projects have technology, culture, and ecosystem at the same time. In the past, in the scalability practice dominated by Ethereum, it was already assumed that transactions cannot be completely placed on the main chain. For someone like me who is not technical, this challenge is very interesting—how to find some special growth patterns in a decentralized ecosystem. And Solana provides a growth pattern suitable for decentralized ecosystems, which does not rely on traditional methods in Silicon Valley or the Web2 industry.

Foresight News: What is the most common characteristic among colleagues you work with at the Solana Foundation? Is there anything or any colleague that has impressed you?

Lily Liu: I really like the working culture of the Solana Foundation, and I enjoy working with everyone. I also feel that most colleagues at the Solana Foundation truly believe in decentralization and execute it seriously, which is also a core consideration in our work.

Many of the blockchain projects that emerged in 2017 and 2018 ended up going in two directions: either enterprise blockchain or EVM compatibility. There weren’t many possibilities to build an independent technical system and community ecosystem.

If you really want to make it happen, you need both technology and this kind of belief.

Asia Pacific + Europe and America is decentralized collaboration in a macro sense

Lily Liu believes that in the blockchain industry, only the Western market dominated by the United States and the Asia-Pacific market dominated by the Chinese-speaking region, these two major markets, have both a strong developer community and capital market with sufficient funding support.

In addition, she also emphasized that the market may lean towards the Asia-Pacific region, while the technology may lean towards the West. “Independent developers are the core assets of blockchain,” and regardless, the developer market is the most important.

Foresight News: We understand that you are a Chinese-American, but you have worked and lived in various cities in Asia for many years, and your Chinese is also very good. You even studied East Asian culture in college. From your perspective, what are the biggest characteristics of the Asia-Pacific market compared to the European and American regions? What are the biggest advantages and disadvantages in the development process of Web3?

Lily Liu: I believe that the blockchain industry has two major markets, one is the Western blockchain market dominated by the United States, and the other is the Asia blockchain market dominated by the Chinese-speaking region. Only these two major markets have strong developer communities and capital markets with sufficient funding support.

The Chinese-speaking market is very, very important, although sometimes there are many restrictions due to policy reasons, it has always been attractive. If we compare, I think the Western market may lean more towards core technology, and many deep development blockchain projects may lean towards the West, such as Silicon Valley or Europe. But in terms of the market, Asia may be more powerful because Asia has a huge population and consumer potential, and Asia plays a core role in the operation of exchanges. In fact, about 80% to 90% of trading volume is conducted through exchanges in Asia.

In short, the market may lean towards the Asia-Pacific region, while the technology may lean towards the West. These two markets are not completely separated, and they still have a certain degree of integration. Of course, these two markets also have certain cultural differences.

If you communicate with some projects in the United States, at least half of them may not have a deep understanding of the role of the Asia-Pacific region. Therefore, in the blockchain industry, we need to have a better understanding of the characteristics of each region, and different regions play different roles in international cooperation. In fact, sometimes projects and markets in different regions are not aware of their own cooperation. This also reflects the decentralized collaboration in a broader geographical sense in Web3. Different nodes in the blockchain industry play different roles, and ultimately they collaborate, although their understanding of each other may not always be completely consistent.

We mentioned internally at Solana that over 80% of the core trading volume of SOL is conducted through exchanges in some Asia-Pacific regions. Some of our colleagues were very surprised and had never realized or 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, and there is strong consensus among both developers and user communities. However, in the Asia-Pacific region, especially the Chinese-speaking region, the exposure and activity have been relatively limited. This year, we clearly feel that the voice of Solana in this market is getting louder and more and more people are discussing Solana. Is this related to the strategy changes of the Solana Foundation itself? What role do you play in this transition?

Lily Liu: I joined the Solana Foundation in 2021 and have always wanted to have the opportunity to help Solana develop in the Asia-Pacific region.

In the past two years, many things have happened globally and in the crypto industry, and we have not found the right opportunity. So we have actually been thinking and waiting for a long time, until the end of last year and the beginning of this year, when an opportunity like this emerged that could be given priority consideration. We have been closely monitoring market changes, and the changes in Hong Kong’s policies make us feel that there are signs of openness in the Chinese-speaking market.

We have already established 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 factors 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 this year.

Foresight News: How do you view the importance of the Asia-Pacific market for Solana’s long-term development?

Lily Liu: Very important. We spent two years in India building a developer-centric growth strategy, and we are also expanding the international market in Europe, especially in Germany and the UK. Although these markets are important, none of them have as comprehensive and balanced development as the Asia-Pacific region, with both developer resources and the foundation for capital market development.

One of our internal judgment frameworks is the Labor Market and the Capital Market.

The Labor Market mainly refers to the developer market, because in the blockchain field, the most core asset is independent developers, so the developer market is always the most important no matter what.

However, there are many such developer markets around the world, such as Silicon Valley, New York, India, and Germany, but few markets have both the attributes of a labor market and a bias towards the capital market.

Only two markets have both a strong labor market and a capital market, 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 pay attention to hackathons and developer ecosystems, and on the other hand, Solana has many innovations in progress, which are expected to show results by the end of this year or early next year.

Foresight News: Looking at the data from the past half year, Solana has made great progress in both technological advancement and TVL improvement. From your perspective, what has been the biggest change for Solana in the past half year? What is the core reason for Solana’s strong resilience in its ecosystem?

Another aspect is the exposure of Solana in the media in the Asia-Pacific region. Perhaps six months ago, or even a year ago, we probably wouldn’t have done an interview like this because Solana had relatively little exposure in the media.

Lily Liu: I think the main focus is on developers, such as earlier this month, we launched a new hackathon called “Solana Hyperdrive”.

Foresight News: There have been significant changes in the current competition pattern of public chains compared to a year ago. Layer2 projects are developing rapidly, and the EVM ecosystem has a strong first-mover advantage. New public chain projects are also emerging one after another. High-performance narratives seem less sexy. What is your view on the current competition? In such a competitive environment, what measures has Solana taken in terms of positioning and strategic adjustments? In which specific areas will Solana increase investment and attention?

Lily Liu: First of all, let’s talk about why we need high-performance public chains. I think this is a self-evident question. The reason why I am interested in Solana is because I hope that blockchain can achieve various use cases, many of which require high performance.

We are now accustomed to the Ethereum mainnet, which is a bit like using a 56K modem to access the Internet in the past. More than 20 years ago, we needed to connect through a telephone line to go online, and it could take half an hour to download a song, just like the current state of using blockchain. Performance is a problem that must be addressed.

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. However, it still has some problems, just like when broadband Internet appeared, we no longer needed to install new modules every time we used different applications.

As for the development of Solana, there will be some new progress by the end of this year or early next year. I think some of the important innovations include “Firedancer,” which can achieve 1 million TPS in internal testing. Of course, in actual operation, it may reach 100,000 TPS, which can already meet the needs of high-frequency trading applications.

Moreover, all of these are implemented on the Solana mainnet. From a technical perspective, this will also make Solana another blockchain with multiple completely independent validator clients outside of Ethereum.

Another innovation is also at the technical level, which is State Compression launched in the first half of this year. Its most obvious effect is reducing the cost of NFTs.

Now, if you want to mint 100,000 NFTs on Solana, it only costs $100, while on Ethereum, it may cost $500,000. This difference is huge. This is not just a cost issue. 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 become infrastructure, which means that NFTs can be used for more use cases.

For example, you can include NFTs as part of a wallet, which was previously impossible. Therefore, Solana’s performance and the reduction in costs can turn NFTs into infrastructure, expanding their application scope.

In conclusion, state compression is a major technological advancement this year. It reduces the cost of using blockchain, thereby expanding the space for innovation and helping blockchain technology to be more widely applied in various fields.

A Bear Market is the Best Time for Builders

Lily Liu believes that hackathons provide a place for the industry’s most talented independent developers to collide ideas and generate interesting thoughts.

Foresight News: We have learned that Solana’s autumn hackathon is now live with a prize pool of up to $1 million, which is a significant investment given the current market conditions. Solana’s hackathon is well-known in the industry and has produced numerous star projects. From your perspective, what is the biggest difference between Solana’s hackathon and other hackathons? What resources does Solana provide to hackathon winners?

Lily Liu: Yes, hackathons not only offer rewards but also provide an opportunity to bring developers together to innovate and compete. It concentrates all efforts within a specific timeframe, and we have been doing this for the past few years with great success. It not only fosters innovation but also facilitates community building.

We usually divide the time into two parts, with half dedicated to development and project training, and the other half devoted to community activation and developer collaboration. This encourages creative collisions among independent developers and provides them with a conducive environment to explore interesting ideas together. It 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 joining the industry, and I believe it is the best time for builders. Despite the potential pessimism, a bear market provides an excellent opportunity for innovation and future thinking.

In a bear market, people have more time and opportunities to delve into the essence of blockchain technology, understand why it is so important, and explore the potential for innovation and application. It is a valuable time for contemplating questions, proposing new ideas, and building valuable projects.

Although it is unclear how long the bear market will last, the market will eventually change.

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