Interview with Yan Xin: The secret to entrepreneurship is to build a big track that can cross cycles

Interview: XinGPT

Guest: Yan Xin, Sign

Xingpt:

Sign social network is very popular recently. Everyone is brushing some of Sign's avatars and various related content. I just want to ask, how did you design this? Why can you let everyone participate in these gameplays on social networks? I feel that this kind of gameplay is actually quite rare.

Yan Xin@Sign

To be honest, we have discussed this among ourselves. I realized last year that it is actually very difficult to make VC coins. Even if you have a very successful product that can make money, then you are a good business, but why do you want to issue coins? I think that in fact, a great coin, many coins actually rely on the traffic brought by airdrop, but after the airdrop, they are actually gone.

Actually, I think last year had a big impact on me. Last year, the market was very bearish, and everyone was struggling. We were always raising funds. For example, since I started my business, I have been working on products while trying to get VC recognition. But objectively speaking, if you want to launch a successful coin, the most important thing is not VC recognition. VC recognition is actually no longer accepted by retail investors, right? VC was originally meant to lead retail investors, but now retail investors no longer recognize VC. If you chase VC every day and still can't catch up, it will be very difficult. So later I realized that building a community is the most important thing, so I have been studying how to build a community since last year.

Actually, everything we do now is not just for the hype of tge. We started to build a community at the end of last year. At that time, there was no tge, but we used our own ideas to build a to C community. Building a community is very different from building a VC coin. You can't just talk about products, right?

You can't talk too much about features. In fact, you don't want to give people just one feature. People are interested in you, not because of how awesome your features are, nor because of how good your product is, but because they like your vision, your vibe, and your culture. So we put a lot of thought into this.

In fact, we have been doing this since last year's Singapore 2049. We held a party at 2049, and at that time we had physical products of sunglasses. In fact, we started doing this in Korea last year, and we have been building it very consistently until now.

Xingpt:

I think there is another problem. You are actually a to B product. Now to C products may not be really used by players, such as meme, gamefi, etc., which are actually more like to C. You were actually to B at first, including the token table now. So how to make the C-end know what a to B product is, or how to make them understand or like this project when there is no use scenario, may be a very troublesome problem.

Yan Xin@Sign

Yes, I think the first one is that to B and building a good community are two different things. Let me give you a counterexample. For example, SpaceX, a company, actually has nothing to do with retail investors. It is a company that makes launch vehicles, but it does not affect their establishment of a community among retail investors. Retail investors watch their rocket launch videos every day. As long as you explain the vision clearly, make everyone feel relevant, think that you are solving everyone's problems, or think that your thing is cool and that you are awesome, everyone will care about you.

It doesn't matter whether you are to G, to B or to C. If your marketing strategy is to say "We are a moduler, whatever layer, for a certain algorithm problem", then you are finished, and retail investors will definitely feel that it has nothing to do with them.

Then if we do something, our goal is actually to make all information verifiable globally, just like blockchain transactions. For example, when a Chinese person goes to apply for a US visa, he or she does not need to provide so many certificates, and all kinds of information can be directly verified. After Chinese people move to the United States, their credit scores do not need to start from zero. Everyone thinks that these problems are indeed worth solving, and everyone will care about them.

Of course, you are right, pure to B is still very difficult, so we will also do some to C things this year. In the next few months, we will change our benchmark projects to Worldcoin and Pi, and we will launch our own Sign App. We will not build a public chain, but we will build our own super App, and then we can take 30% of the tokens as incentives. This App is actually our distribution channel, and everyone has it. It can be used to store assets. We will put US stocks, services, and our own apps in it. This year, our theme is actually to G and to C, which means cooperating with 20 countries to make IDs and issue subsistence allowances. We will discuss this kind of cooperation with the country and build sovereign blockchain for them.

And the community activities, such as online karaoke and online poker tournaments, are all directly to C, and we will include all of these.

Xingpt:

Then I think we can talk about it back, because we have known each other for a long time. At the beginning, you did this project to benchmark Docu Sign, then later you did attestation, and then you did token table, and now you are doing UBI. What is your idea when you are looking for PMF? I think a good point of yours is not to chase hot spots. For example, when Dubai was very popular, you did Docu Sign, and signatures were actually very niche. Later, attestation was not a hot spot at the time. The hot spots at the time were ZK and public chains, and now the hot spot is actually meme. It seems that you have never chased the trend. Are you deliberately avoiding it? Or do you stop chasing it if you don’t catch up? What is your thinking logic when looking for PMF? Do you seek help from outside or are you driven internally?

Yan Xin@Sign

I think there are two points. The first is to care about internal consistency. For example, when we first did ethsign, the team was very green, and DeFi startups were already very advanced, with high complexity and a lot of money in them. This kind of product may not work in the long run. Startups raise some money at the beginning and put it in, and it’s over once the money is stolen; NFT is not suitable for us either. So we chose something unpopular at the time. At that time, choosing an unpopular thing was deliberate because we didn’t have the strength to compete with others.

Later, I cared about two things. The first is the consistency within the team. For example, we are actually consistent from ethsign to the token table, because most of the people who sign the agreement are engaged in investment and financing, and there is consistency from signing the agreement to executing the agreement with smart contracts. Second, from ethSign to Sign Protocol, there is also coherence - from signing and verifying the agreement to the chain, to all digital information being signed and verified on the chain. Ethsign is still based on Sign Protocol and has many users. So we are particularly concerned about the coherence within the team. If the internal division is too serious, we will abandon all the past accumulation and the morale will be unstable.

I also care about what the market needs. For example, the token table. In the middle of last year, we found that the unlocking cycle is very long now. Everyone wants to unlock and sell coins. These are the actual needs we observed. Then we did it if we thought we could do it, and then it became an observation of the business market.

It is actually difficult to chase hot spots in the currency circle, because hot spots generally only last for three months. It is often too late to chase after it when you find it is a hot spot. Generally speaking, you have to do it first, and then you have a chance when the hot spot comes to you, such as Virtuals, because others are already there. Then, once the hot spot comes, it will take off. You said Myshell wants to follow this hot spot, and if it follows it for a few more months, it will no longer be a hot spot when it catches up with Binance. So it is difficult for startups to follow the hot spots in the cryptocurrency circle because the time is too short.

Xingpt:

By the time you unlock it, the project is no longer a hot spot.

Yan Xin@Sign

Yes, what we can do now is to become more and more traditional. We have become a company with revenue, making money every month, and then we work hard in the direction we think is awesome. In the current market, in fact, most people don’t believe any stories. No one believes you when you talk about the public chain community, no one believes you when you talk about ZK, and memes have been played out and lost everything.

We can only continue to do what we believe in, that is, to expand and strengthen the community, so that those who have never used the cryptocurrency circle can start to use it. So we started to cooperate with the country to expand our territory, instead of pursuing greater hot spots in the inner circle.

Back to the previous question of building a community. The current Marketing stardard is to match those KOLs and let KOLs speak for you. In fact, it is to grab the popularity in a fixed circle for a while. But you also know that this is not sustainable. KOLs are promoting new coins every week, and people will not always keep your coins. They have new coins to sell every week. In fact, the reason why the currency circle is not developing well now is because the inner circle is so small, full-time people, liquidity, but money is limited. So it won’t work. Pi has inspired me a lot, because Pi users only play Pi and don’t touch other coins. So I think you must find your own territory, have your own real user group, install your own Sign App in the user group, and won’t let others touch other coins.

Xingpt:

Yes, I think it’s very interesting. For serious project parties, everyone may have prejudices when looking at Pi. People with an IQ of 100 may think that Pi users are all "low IQ", but in fact, as you said, Pi still has a strong ability to occupy the mind. It's just that we may not want to touch other cx issues, but it is indeed very strong in occupying the mind.

Yan Xin@Sign

Yes, I'll show you something awesome. We have done a lot of research-this is a store in South Korea that accepts Pi payments.

Xingpt:

Can it really be paid? Or does it show that it can be paid?

Yan Xin@Sign

In South Korea, merchants who want to support Pi payments must pay 220,000 won to Pi a year. They have to pay money to use it. These are all offline stores, and there are small supermarkets selling wigs and haircuts.

In fact, Pi is the closest to real digital currency in my mind. You said you issued a coin. I have reflected on it in the past. For example, since entering the circle, the narrative of the coin circle has been hijacked by VC. VC has its own theory, saying that your coin has utility tokens and governance tokens, but after so many years, is your utility really worth so much money? How many utilities have you seen? Can gas be worth billions? Governance tokens are even more stupid. The truly awesome coin is community+crypto currency. The larger the community, the more utilities it will incubate, and it will also create its own governance, which is not determined by the project party. The awesome coin is that you have a huge community. Vitalik just wrote the client himself, and everyone runs this client. Etherscan is not made by Vitalik. The most awesome thing is that you build a community and give everyone the opportunity to participate. You can't just let everyone buy coins, you have to give them the opportunity to contribute and earn tokens, so that everyone can play by themselves. So build a good framework, not just a plate. This is the essence of the currency, not the VC theory.

Xingpt:

Yes, it is not just about making money or buying at a price.

Yan Xin@Sign

Yes, in fact, this model is not sustainable and may not work. If there is no Paradigm at the beginning, unless there is something like Paradigm, Elon Musk to help you shout orders, or Trump to make a big plate for you, it will not work now. Now there are too many plates, even if it works, the actual model is that the front people cut the back people, as long as the back people don't come in, the plate will collapse.

Xingpt:

Yes, now Binance's new coins can't rise, and the circulating market value is very low. What do you think of the currency price? Is it a pressure for you?

Yan Xin@Sign

It is definitely a pressure. After all, we also have financing, and we need to make investors make money. We recently repurchased the money of pre-seed investors. The price of the currency is definitely important.

But I think how you maintain the price of the currency and how to do it upward, as I said, you have to have your own set of things. We now have product capabilities and business capabilities. First of all, the company can survive, not by selling coins to make money. Secondly, the business has developed. On this basis, it has become a model where it is not our team work2earn, but the community contributes and earns tokens. I think the mining machine disk is the most reliable.

Xingpt:

It still has to be PoW, right?

Whether you are talking about Ethereum or Bitcoin, PoW is the king. Now UBI may be everyone contributing something else.

Yan Xin@Sign

Yes, let everyone contribute, such as traffic, whether it is put into Perp DEX or US stocks. You hope that the money from traffic monetization and the mined coins can be balanced or discounted. If they can be balanced, there is a chance. Pi can basically break even now.

This is the expansion direction I can see. The advantage of PoW is that everyone is contributing. If you don’t contribute, there will be no coins, unlike PoS where the people behind will always take over for the people in front.

Xingpt:

OK. For example, if you have a specific idea now, what will be the form of community contribution on Sign in the future? Because each contribution form has a different path, for example, Worldcoin relies on iris to sell identity, and Pi relies on brushing tasks and socializing.

Sign, what type do you think it will be, or are you still thinking about it?

Yan Xin@Sign

We have thought it through quite clearly. BTW, I want to say that the problem with Worldcoin is that it is not a continuous contribution, but a one-time contribution of irises, which cannot be sustained. You accumulate a lot of information, but you cannot monetize it, and you cannot get the money back, so there is no reason to continue.

But for example, Pi relies on community traffic, and selling advertisements can keep it even. We will learn from it, which is equivalent to integrating Worldcoin+Pi. Worldcoin has various utilities. For example, there are mini apps in it, which can be wallets, identity authentication, etc. But Worldcoin has no user engagement. It is an app made by Americans, and you get paid once a month. You have no reason to open it every day, so the traffic cannot be increased. Pi needs to be opened every day, and the traffic is large, so it can sell advertisements. Just like Alipay, it has both normal services and Ant Farm, which allows you to engage every day. We will do similar splicing. What I am doing this year is to cooperate with the country, such as offering them Tax Deck, building a chain to the ID system, the minimum living security system, and the UBI system. In fact, I am helping them to issue the country's money and cooperate with their stable currency. In the future, for example, UAEPS, the UAE's things, will be a stable currency account that has passed KYC after getting the ID card.

Yan Xin@Sign

Yes, do these normally. The goal is to make the installation volume of Sign App reach 10 million or 20 million. In this way, you can put advertisements and APPs, such as hyperliquid, US stock trading platforms, and various services. It is normal for US stocks to charge 10%. It is costly to buy US stocks for Turkish people. You can put good services and assets worth promoting globally, and even pensions and insurance can be done. For example, set up a fund on Wall Street to manage pensions denominated in USDT. This is our goal.

Xingpt:

Yes, anyway, we should build up the users first.

Yan Xin@Sign

Yes. User contribution is actually, we now have 4 types of SBT in our community, and there will be in the Sign App in the future. Entering it is like choosing a profession in World of Warcraft, such as Serious builder, making things together; support warrior, which is reply guy, giving likes, interaction, and emotional value to others every day; orange blood is orange blood, inviting others to join; and there are things related to staking.

Xingpt:

Understood, there are still some social functions. The example you gave of Alipay is a good one. Alipay is actually a kind of SBT. You can register with your ID card, bind your bank card, and correspond to the blockchain address. Then there are some social activities. The concept of Alipay on the chain is quite interesting.

Yan Xin@Sign

Yes, Alipay for the whole world.

Xingpt:

This is very interesting. I think it is also meaningful to combine with stablecoins. In fact, there are not many solid narratives in the currency circle now. Bitcoin is definitely one, and stablecoins are also one. If it can be combined with stablecoins, it is also a direction. What do you think of the industry market or industry development? Now it seems that everyone is quite confused. The market is sluggish. There are too many VC coins and meme coins. I don’t know how to develop in the future.

The second is that VCs and entrepreneurs don’t know what to do. People who have issued coins also want to pivot, which is actually quite difficult. I haven’t encountered this situation since I entered the circle. Although it was a bear market in 2018 and 2019, everyone knew that they were working on public chains, such as Solana. It was difficult to raise funds at that time, but the direction was clear. Now everyone is working on new things in AI, but in fact, they don’t have much confidence and don’t know what the next wave of narrative in the cryptocurrency circle will be. What do you think?

Yan Xin@Sign

I think so too. In fact, when I returned to New York in early March, I talked with several project founders there, and everyone was quite confused. I think we still have to find big narratives, and we can’t focus on small narratives, which will soon pass. Now it’s very dangerous to invest tens of millions of dollars in something that will be outdated in three months.

So now I’m betting on things that are as big as possible, such as the ID system we made, which can be used globally. Now you use an ID to KYC, and the exchange takes a photo, but it can’t actually verify your passport, and it can’t be verified like verifying transactions. We want to make it like that.

I think the digital infrastructure of the future will be world-class. World currency is the first world-class thing, Starlink is a world-class communication network, and in the future more and more infrastructure will be world-class, and ID cards, banks, and academic qualifications can be verified globally. This is the direction we have been blindly advancing.

This is the only direction I think is credible, and I am not afraid of zero accumulation on this, because this is the trend of world development.

In addition, we must find specific pain points. For example, why are small countries willing to cooperate with us? They do not issue their own stablecoins, and they have to pay an 8% handling fee every year to use the existing payment system. 8% of the country's electronic currency flow is given to Visa, which is actually darker than the currency circle. So if there is a chance, they would rather issue their own national currency and build their own payment system, and we will help them do it. I believe that although it is not popular now, this is the trend in the next 5 or 10 years. As long as the company survives, I dare to keep doing it.

Xingpt:

I understand. In addition to the direction you are working on, as an investor or observer, what new directions that have not yet emerged or no one is working on do you think are promising?

Yan Xin@Sign

I am actually working on the ones I am more optimistic about. For example, I think we can build a mini religion (mini religion/community). What does it mean? Murad said it when he was promoting memecoin at the beginning. This term has a great influence on me. Now that AI is developing so fast, 1 billion people will definitely be unemployed in 5 years. These people can neither do research and development nor screw as well as robots. These people need small platforms to give them something to do. I think building a mini religion, your network should not be a tool to get work done faster, but a platform for everyone to provide emotional value to each other. I think it is awesome. Now we measure people by money and work, but in the future machines can do it, and people should just provide emotional value to each other.

Now picking up girls is also about whether you can provide emotional value. No one is hungry, and no one wants your little meal.

If you can build a system that provides emotional value to 10 million people, this is awesome.

For example, when we build a community, it is not to let everyone listen to me, but to let everyone reply, like, and interact with each other. It is a network, not a point-to-point communication between me and everyone. I think this is very entrepreneurial, beyond crypto.

Our company actually has three businesses now: one is to build a community; one is to do sign, cooperation with to G and sign App; the other is token table, which is to be a cryptocurrency broker and put various assets on the chain. Now that everyone has USDT, it has become internationalized. Can we buy different assets based on USDT? For example, gold prices have risen recently, and it is not easy for Chinese people to speculate in gold. We let everyone use USDT to buy any asset, put all assets on the chain, and everyone can trade. I just want to put US stocks in the Sign App.

Xingpt:

But FTX and BMan have done this before, and it seems that they were suspended due to compliance. Do US stocks still rely on compliance?

Yan Xin@Sign

It's possible, but compliance is also changing now. After Trump came to power, he can basically do anything, and only compliance has a chance. We have no chance in mature markets.

Xingpt:

Yes. What do you think of this wave of AI? Recently, AI and robotics (not in the cryptocurrency world) are very popular, and many projects in the cryptocurrency world have also turned to AI, pure AI stuff. Do you think it will have an impact on the cryptocurrency world? Will attention and funds be sucked away?

Yan Xin@Sign

This is an objective reality, and it is quite healthy. Any industry must be constantly sifted out, a wave of people are sifted out and a wave of new people come in, and the ones left after the sifting are the cryptocurrency world of tomorrow.

Some people like me can't do AI and don't know how to do it, so I don't care. Some people who are already dual-roaming can enter the cryptocurrency world and retreat from AI in Silicon Valley.

Xingpt:

I understand, when do you think the next big wave of cryptocurrency market will come?

After the ETF, the cycle is different from what everyone expected. The BTC price model that was previously inferred based on the four-year cycle has been falsified. Now, if we want to think about the new cycle, there are many different opinions on the cycle. In fact, the cycle is very important when you do a project. What should you do in the bull market and what should you do in the bear market? This is also a very important point to think about. What do you think?

Yan Xin@Sign

I blindly believe in the four-year cycle, and I think that last year's Bitcoin reaching 100,000 was actually very accurate in the prediction. Using log to make the Bitcoin year index, it has always been a straight line in the past. It was also very accurate to reach 100,000 last year, but it has not reached 150,000 or 200,000 this year. Assuming that it reaches it and is accurate again, there is still a chance overall.

Now after the ETF, it is more closely related to the US stock market and is affected by the macro economy, but in general, the currency circle is still very small, with only tens of trillions of money. As long as the wind comes, it can be pulled up again. Why do I blindly believe in the four-year cycle? Because I don't see any reason to change the cycle. I think the determining factor of the cycle is the memory of retail investors. After a while, everyone forgets how they lost money last time and enters the market again. FTX hurt everyone a lot, but no one cares about it in two years, because didn't Hyperliquid rise again last year? Everyone doesn't care about decentralization or centralization. As long as someone calls for another wave, there is no problem.

In mathematical models, the cycle will slowly lengthen, but not quickly. It is essentially the result of collective behavior game of people. It is a very fixed pattern. Because it has been four years every time in the past, I don't see any reason to change.

Xingpt:

I think you have always been very accurate in grasping the rhythm. In 21 and 22 years, you will raise funds in the bull market, and in the bear market, you will look for cash flow or cash flow business. How do you grasp this cycle? What should you do in the bull market and how should you survive the bear market (as an entrepreneur)?

Yan Xin@Sign

Of course it has something to do with the company's stage. First, I'm bragging. I've never failed to predict a bear market. I successfully bought the bottom when I just entered the circle in 2018, and I also successfully bought the bottom in 2021 and 2022. I have always blindly believed in MVRV and believed that the core valuation of the currency circle will not fall again after everyone loses a certain amount of money. Overall, it is still within the plan. Now we have reached the A round. The company can make products and make money. The bull market continues to expand, tell bigger stories, and gain more attention and users. Only in the bull market will there be an opportunity to talk with the government. In the bear market, everyone thinks that the currency circle is a scam, and the bear market will develop in a creepy way, and it will repeat.

Xingpt:

Do you think there will be another wave of market recovery this year and next year? Now VCs have all transformed, some are market agencies, some are secondary companies, and some are flat. I don't think this will be a long-term situation. Do you think it will pick up or will it take a long time?

Yan Xin@Sign

The market will definitely pick up, but the industry structure may not return to the past. The current VCs were actually born in the last wave, and there were not so many before. Most VCs actually have no judgment ability, they just follow the leader and give some money. The real VC is able to organize and endorse. Everyone in the industry knows that there are few capable people, and such VCs will continue to survive. Those who are incapable will die, and they will do something else.

When the industry matures, there will be more and more people. In 2017, it was all about playing with concepts, and as long as it was blockchain, it was awesome. In 2022, everyone began to know about Bitcoin slowly, and now it is moving towards the ground. Whoever can get people outside the circle to use it can expand the circle. The profile of talents needed in this stage is different from that in the past. For example, Alipay started out as a custodian and later expanded to be used by the public. These are two different groups of people. In the future, we will need more traditional people who can do execution and push the market. No longer VCs who just shout orders. It is more like the O2O era, where people distribute goods and deliver food, unlike the first wave of the Internet, where people were all online webmasters. Yes, that era has passed. Attention is sinking more and harder to obtain.

Yan Xin@Sign

In fact, the people who really understand Bitcoin and decentralization in the world have all entered the circle in 2013, 2015, and 2017, and have entered the circle repeatedly. Now we can only expand to find people with IQ 70-50. This group of people does not care whether you are decentralized or not, but only cares whether they can get benefits. The language and playing style you speak to them are different. You are no longer the group of people who "decentralize the future".

Xingpt:

You are right. Now the main focus is on the halal school and pure technical narrative. In fact, it is not going to work. It is self-circulating in the circle and cannot go out of the circle.

I think the biggest problem now is that there is no positive externality. There is no positive externality in the internal narrative. This wave of people have come in, and ground promotion or UBI may attract new users.

The question I am thinking about is whether we can use non-coin circle methods, such as AI applications and consumer applications, to circle users first, and then tokenize them, without issuing coins first, and then expand to the coin circle after the users are up. Do you think this path is reliable?

Yan Xin@Sign

I don’t think it’s necessary to “expand to the coin circle”, it should be said that it can only be “reduced to the coin circle”. The users of AI, payment, and applications are much larger than the coin circle. You can issue coins, but there is no need to play with VCs and users in the coin circle. You can just issue a coin based on AI users for everyone to play. There is no need to return to the familiar coin circle now, and there is no need to let the degen and VCs in the coin circle buy your coins. They will sell them after buying them for a week. In fact, these people are meaningless to you from a certain perspective. They will not hold your coins. They buy them to increase the trading volume of Binance, which is useless to you.