Research Summary

The report presents an interview with Leo Zhao, Head of Strategic Investments at MEXC, discussing the company’s investment strategy, the rationale behind investing in projects like SEI, Berachain, and TON, and the challenges faced by Chinese entrepreneurs in attracting American investors. Zhao also shares his views on the Bitcoin ecosystem and the potential of Fully Homomorphic Encryption (FHE).

Key Takeaways

MEXC’s Investment Strategy

  • Evolution of Strategy: MEXC’s investment strategy has evolved over time, shifting from a focus on DeFi in 2020 to BTC ecology, AI, and trading-related projects in 2022. The strategy is divided into strategic investment and ecological investment.
  • Investment in Funds: MEXC has invested in top-tier funds in Europe and the U.S., such as Polychain and Bankless Ventures, to gain early access to high-quality projects.

Investment in SEI, Berachain, and TON

  • SEI Investment: MEXC invested in SEI due to its blockchain architecture designed for trading optimization, which aligns with MEXC’s investment philosophy.
  • TON Investment: MEXC established a strategic partnership with TON, attracted by its integration with Telegram and its rich array of applications.
  • Berachain Investment: Berachain was chosen for its unique gameplay focused on liquidity, including staking for rewards and project governance.

Challenges for Chinese Entrepreneurs

  • Language Barriers: Chinese entrepreneurs often face language barriers and differences in mindset regarding token management when seeking support from American investors.
  • Focus on Long-term Vision: American investors value the founder’s foresight and the project’s long-term value, which contrasts with the short-term profit focus of many Asian projects.

Bitcoin Ecosystem and Ordinals Track

  • Momentum in Bitcoin Ecosystem: Zhao believes that the momentum in the Bitcoin ecosystem will continue, driven by the significant profits brought to miners by the growth in transaction fees.
  • Future Development: The development of the Bitcoin ecosystem will not solely revolve around projects like Ordinals, with genuine innovations like Nostr and RGB also expected to attract significant asset inflows.

Potential of Fully Homomorphic Encryption (FHE)

  • Explosive Growth Potential: FHE, a cryptographic technique similar to Zero-Knowledge Proofs, has the potential for explosive growth, especially when combined with AI. It is particularly suitable for handling sensitive data.

Actionable Insights

  • Consider the Long-term Vision: Entrepreneurs seeking investment should emphasize their long-term vision and innovation, rather than focusing solely on short-term token unlocking plans and token issuance cycles.
  • Explore the Potential of FHE: Companies should explore the potential of Fully Homomorphic Encryption (FHE), especially in combination with AI, for handling sensitive data.
  • Monitor the Bitcoin Ecosystem: Investors should monitor the Bitcoin ecosystem and the Ordinals track, as they are expected to continue their momentum and attract significant asset inflows.

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