How did Binance Labs grow to become a $9 billion cryptocurrency investment institution with the most comprehensive resources in the industry?

Recently, the U.S. Securities and Exchange Commission (SEC) has filed charges against Binance.US and Coinbase, leading to a series of market turmoil in the cryptocurrency industry. Because the industry is still in its early stages and many policies and regulations are not yet fully established, supporting industry participants, expanding the ecosystem, achieving greater adoption, and promoting the continuous development of the early industry have become particularly important. Binance Labs, the risk investment and incubation department under the world's largest exchange Binance, plays a crucial role in this.

Binance Labs, a Long-term Oriented Venture Capital, Providing Comprehensive Resources as Advisory Investments

Introduction to Binance Labs

Established in 2018, Binance Labs is the venture capital and incubation arm of Binance. The goal of Binance Labs is to identify excellent blockchain startup teams, companies, and entrepreneurs, providing them with resources and guidance to promote the overall development and widespread adoption of the blockchain ecosystem. Currently, Binance Labs' portfolio covers 6 continents, over 25 countries, with successful investments and incubation of over 200 projects, spanning the Web3 full spectrum: public chains, protocols, infrastructure, NFTs, blockchain games, metaverse, DeFi, and CeFi.

From technical infrastructure, data analytics, security, to end-user product applications, community, and ecosystem development, the "comprehensiveness" of Binance Labs is its greatest feature and advantage.

With years of experience in the cryptocurrency industry, He Yi, also a co-founder and CMO of Binance, took on the role of head of Binance Labs in August 2022. Under her leadership, the total funding has grown from $7.5 billion to $9 billion.

Binance Labs' Long-term Vision: Identifying Projects Willing to Continuously Cultivate Potential

According to official data, Binance Labs has achieved a 10x return rate over the past three years. In previous media interviews, He Yi shared many of Binance Labs' investment perspectives.

She believes that whether in a bull market or bear market, it is crucial to have a clear understanding of what one truly desires; in a bear market with lower valuations, investors should actively invest, not for the sake of investing. They are aware that projects that seek quick profits and deliberately follow trends usually lack a solid business model and are forced to exit the industry once the hype and funding fade away.

Therefore, in a sluggish market, it becomes an excellent opportunity to identify and select projects that are genuinely committed to continuous operation, and to believe in the entrepreneurs or teams in this industry, making the bear market an excellent time to invest in potential projects.

This also reflects the core philosophy of Binance Labs: long-term orientation.

Three Major Types of Mutual Investment at Binance Labs

Binance Labs envisions a future where people can easily use blockchain-native products in various life scenarios, just as we are accustomed to having convenient smartphones and various internet services in the 21st century.

However, the blockchain industry is still in its early stages, with some technical bottlenecks and areas for optimization. Therefore, building a solid infrastructure is the primary goal and investment direction, such as layer one or cross-chain protocols.

Once the foundational technology is in place, the next step is to consider how these technologies can be applied to address people's problems and needs in life. This involves whether it can bring more users to the blockchain and provide users with more efficient and better experiences. They also focus on some typical fundamental questions: What is your business model? P2E, M2E, or what innovation do you have? Note: P2E - Play to Earn, M2E - Move to Earn.

The most critical bridge between technology and application is to establish a positive mutual cycle, which is "security and trust." A secure infrastructure can gain users' trust; having enough users can invest resources in developing the infrastructure. Therefore, their focus on the third type is on projects that provide blockchain services to support the overall development and progress of the industry, such as data security.

Binance Labs Provides Not Only Funding but Also Technical, Security, and Business Guidance

When Web3 startups raise funds, there is a key difference from the past industry model: they may not necessarily need to raise funds through venture capital companies but can directly issue tokens for sale to users.

Binance Labs believes that users and communities are the core of Web3 projects. Therefore, compared to simply providing funding, if venture capital companies can offer more guidance on technical, security, or token economic models, they may bring greater value and impact to projects. This is also the core purpose of Binance Labs' incubation program.

The "Binance Labs Incubation Program" designs two courses for each project based on their needs - Web3 Knowledge Tips and Entrepreneurship Operations.

During the eight-week training, project leaders can have one-on-one advisory interviews with industry experts and also have the opportunity to have direct conversations with Binance Labs incubation program alumni, including founders of well-known projects such as Polygon, Injective, Celer Network, among others. Incubated projects can gain methodologies for project construction, testing, and learning, as well as learn from the successful experiences of other projects, gain market insights, and achieve rapid iteration of project ideas.

After the training, Binance Labs invites investors, entrepreneurial mentors, industry experts, and potential business partners to participate in presentation events to showcase and promote the projects to the market. After the incubation period, Binance Labs also gathers all past alumni to create a comprehensive alumni resource network for them.

Binance Labs Investment Types: Infrastructure, Product Applications, Web3 Tools

The comprehensive investment scope of Binance Labs allows for vertical and horizontal integration of technology, products, and communities, showcasing three representative successful case projects:

Infrastructure: Polygon, Aptos, Sui

Polygon is currently the preferred Layer 2 scaling solution for Ethereum, aiming to address Ethereum's slow and high-cost drawbacks by placing transactions and smart contract computations on side chains, completing the calculations before returning to the main chain. Its native token is MATIC, and as of June 2023, it ranks in the top 15 by total market value. In terms of applications, DeFi and NFTs are the mainstream, with over 350 DApps, including notable ones like DeFi lending protocol Aave, decentralized exchange SushiSwap, and automated market-making service Curve.

Aptos and Sui are both public blockchain networks derived from the Meta team, developed using the Rust-based Move programming language, and utilizing the same PoS consensus mechanism as Ethereum. Aptos achieves high throughput parallel processing based on MOVE and the MOVE virtual machine MoveVM. Aptos uses an improved software transactional memory called Block-STM for processing, which does not require transactions to explicitly declare which part of the state they are using. Sui has a different approach to parallel processing, requiring transactions to explicitly declare which part of the blockchain state they are modifying. Solana and Sui use this method, with Sui using a different version of the MOVE language, Sui Move, which changes storage modules and asset permissions, distinguishing it from Aptos.

The goals of Aptos and Sui are to enable developers to create a better user experience in Web3, catering to the next billion users. Their main features include robust scalability, a more secure smart contract language, the ability to define complex on-chain assets, and an unrestricted development toolkit.

Product Applications: Space ID, GOMBLE

Space ID is a decentralized domain name protocol based on the BNB Chain and Arbitrum One chain, providing a one-stop platform for Web3 domain names and identities since 2022. Users can easily search, trade, register, and manage Web3 domains. Domain services can transform complex wallet addresses (e.g., 0x69...) into easy-to-understand personalized names (e.g., Jack), and now offer top-level domains such as .bnb, .arb, in addition to the previous .eth option. According to official data, there are currently over 450,000 .bnb domains available.

GOMBLE is a blockchain-based casual game development team, with its parent company being the well-known game developer 111 Percent based in South Korea. Their flagship games include Random Dice: GO, RandomDice: Defense, BBtan, among others, accumulating over 200 million global downloads. GOMBLE's 3A-level social game Rumby Stars breaks the high entry barrier of NFT assets as participation requirements in current Web3 games, aiming to create a casual game suitable for all ages and skill levels, providing players with a higher quality gaming experience.

Web3 Tools: SafePal, Trust Wallet

Founded in 2018, SafePal is a comprehensive decentralized crypto wallet supported by industry leaders like Binance Labs. SafePal aims to allow users to securely manage and appreciate assets in the decentralized world through its hardware wallet, mobile app, and browser extension wallet solutions.

The SafePal platform currently serves over 200 regions and countries globally, with more than 10 million users, supporting 15 languages, over 100 blockchains and their tokens, and NFTs. It also features user-friendly cross-chain swaps, cross-chain bridges, DeFi management tools, among others.

Trust Wallet is a secure open-source decentralized cryptocurrency wallet that enables users to manage over 9 million tokens and 1 million series of NFTs on 73 blockchains. Trust Wallet does not store users' wallets, hold private keys, or request personal information, allowing users to have full control over their mnemonic phrases. Another key feature is the built-in DApp decentralized application browser, allowing users to interact and trade without the need for detailed blockchain information, and store NFTs on different blockchains such as Ethereum and BNB Smart Chain within the app for easy collection and appreciation of digital art.

The Future Outlook of Crypto Venture Capital: Incubating More High-quality Startups for Blockchain Widespread Applications

Reflection: The Boundary Between Venture Capital Firms and Project Parties

From the above three case project groups, we can see the comprehensive investment of Binance Labs, covering blockchain and infrastructure on the technical side, to product applications and communities on the user side, helping achieve balanced development of the entire industry chain. Within a short three years, they have achieved outstanding results with over a 10x return rate.

Venture capital firms bring many opportunities and resources to the blockchain industry. On the other hand, we can discuss and reflect on several issues from various perspectives:

• Do venture capital firms also need to fulfill management and oversight responsibilities for project parties?
• Do venture capital firms have the power and obligation to prevent the occurrence of certain controversial issues?
• When the development of project parties threatens venture capital firms, involves conflicts of interest, or turns them into competitors, will this have a negative impact on the industry?

Binance Labs: The Most Comprehensive Resource Integration Platform and the Most Powerful Venture Capital Incubator

Every time a dispute occurs, the above questions are debated, and the topic gradually fades from public memory once the heat subsides. However, true developers need time and continuous effort to solve various new challenges thoroughly to prevent problems.

This is why Binance Labs continues to invest resources steadily, regardless of market trends, and even after the downturn in late 2022, the fund size continues to grow, from the original $7.5 billion to $9 billion, and invests in nurturing more innovative and experimental projects. The goal is to provide a more comprehensive resource integration platform for industry builders, allowing funds, technology, and knowledge to be more effectively utilized.

We also look forward to the future of the blockchain industry attracting more users, technical talents, resources, and funds to develop a more diverse ecosystem, enabling positive competition and growth among each other, and fostering more diverse and explosive innovative products and applications.

Why is Binance willing to invest so many resources?

The biggest difference between Binance Labs and traditional venture capital firms is that they do not need to rush to recover profits but focus on the overall development of the industry. Binance's core business is an exchange, and by investing heavily in public chains, protocols, infrastructure, NFTs, blockchain games, metaverse, DeFi, CeFi, etc., they aim to make blockchain technology accessible to everyone in a safe, simple, and convenient manner. The more people use cryptocurrencies, the more users it will attract to the exchange, bringing in more revenue; and this revenue can be reinvested in incubating more projects, establishing a positive cycle in the industry chain economy.

To learn more about Binance Labs' investment portfolio, click here for more detailed information. If you are a project team and want to learn more about incubators and venture capital information, feel free to visit the Binance Labs official website.