"Night Watchman" Du Jun: Returning Home, Huobi's Sword Is Aiming at Overseas

On November 13, Huobi co-founder Du Jun visited the CoinWorld live broadcast room and gave a keynote speech on "The Night Watchman Du Jun: Returning Home, Huobi Aiming at Overseas".

Du Jun is the co-founder of Huobi, founding partner of Node Capital, and founder of Golden Finance. He has worked for well-known Internet companies such as Tencent and Kangsheng Chuangxiang. In 2013, he participated in the establishment of Huobi. During his tenure as CMO, Huobi quickly developed into the world's largest exchange.

Mr. Du Jun has sensitive industry insight, rich business operation experience, broad international vision and professional business management experience. He is an early practitioner and explorer in the blockchain industry.

So, what prompted Du Jun to return to Huobi? What changes will this return bring to Huobi? What unique insights does he have on the market trend?

The following is the live broadcast record:

PART1: About returning

Host: On October 21, Li Lin issued an internal letter to officially welcome your return. What was the opportunity for you to return to Huobi? Half a month has passed. How is your running-in with the current Huobi team?

Du Jun: I left Huobi in November 2016. At that time, the team was less than 300 people, the business was only the exchange, and more than 80% of the customers were from China. I returned to Huobi at the end of October this year. The global team is more than 1,600 people, the global diversified institutions are spread across 10 countries and regions, and there are more than 10 major business lines, so I need to spend some time to familiarize myself with the details of the business lines. I have maintained a very close contact with Huobi over the years, so I am not unfamiliar with the Huobi team, and there is no hindrance to the daily work connection.

Host: Compared with the establishment of Huobi in 2013 and the time when you left Huobi in 2017, how do you evaluate Huobi now and what are your expectations?

Du Jun : Huobi is now a blockchain company with an ecosystem. It has made a lot of achievements in supporting the development of blockchain technology, supporting the value discovery of digital assets, cultivating talents, exploring business models, and other aspects. The two most important points are that Huobi has set an example in the industry. The first is compliant development, and the second is asset security. All of this is of great significance to the development of the entire blockchain industry, and also establishes Huobi's position in the blockchain industry. I hope that Huobi will become a company that contributes to the development of blockchain digital finance on a global scale in the future.

Host: On October 30, Golden Finance released the news that [the FBI and IRS may be investigating Binance]. Some people think that after your return, you used your media advantage to help Huobi tear up Binance, which is "deliberately making trouble"; some people think that Huobi and Golden Finance have the potential to build a "coin circle flush"; others speculate that your return to Huobi is the "last retreat", and there are even many people who question the "asset transfer" (keys are scattered in China and overseas). Please respond to the above market rumors.

Du Jun : As a media, Golden Finance only sorted out the news released by Forbes at that time, and the media maintained an objective and fair position throughout the process. This was a sensational news in the industry at that time. If Golden Finance did not report it, it would be a dereliction of duty. Huobi and Golden Finance need to be professional and excellent in their respective business fields and be recognized by users in order to continue to develop.

Huobi has been on the road of progress. My return is not Huobi's final retreat, but I hope to develop Huobi into a global blockchain leader with my old comrades. The demand for blockchain technology and digital assets in the global market is rapidly expanding, and the industry is in a window of fission development. It is time for us to make great plans. I returned to Huobi because of its future. It is wrong to think of me as Huobi's retreat. I came back to do great things together.

As for asset transfer and asset custody, Huobi Wallet uses multi-signature and threshold signature technology to ensure the security of the private key signing process, multi-person and multi-location backup to ensure the availability of private keys, and self-developed security hardware to ensure the robustness of storage. The cold wallet address is open to the public for a long time, and anyone can check the remaining assets in our cold wallet on the chain. This is the confidence of Huobi and the basis for many users to trust the platform.

Host: You once said in your circle of friends that you would be "responsible for the price of the currency" after your return. Can you tell us more about it?

Du Jun : HT’s repurchase support is actually sufficient. What we need now is to boost more hope and confidence. This will be my future work focus.

Host: Recently, after OK's Xu Mingxing was investigated and Binance was caught up in the US regulatory storm, it was reported that Huobi's second-in-command was taken away, and HT fell in response, leading to frequent withdrawals on the platform. How is Huobi's current operation? What do you think is the reasonable valuation of HT? Will there be some new empowerment actions in the future?

Du Jun : Huobi is currently operating normally, and the capital performance has been good in recent days, and the trading volume has also increased. Regarding HT's valuation, this is not an issue I should talk about. From an industry perspective, it is inappropriate for me to talk about valuation. But my work will continue to empower HT.

Host: In this troubled time, the entire industry is more or less in a state of panic. Do you think that digital currency trading can really survive in this land of the East? If it faces a more difficult situation one day, will it lead to the demise of the entire industry?

Du Jun : First of all, in Hong Kong, digital asset trading is supported, and the Hong Kong Securities and Futures Commission (SFC) has also issued a Hong Kong Virtual Exchange Compliance License. Therefore, in this land of the East, digital currency trading can not only survive, but also grow stronger and stronger. Since it will grow stronger and stronger, there will be no situation where the entire industry will die out. The perspective of this issue needs to be considered, because this perspective is completely contrary to the development of the industry. Here I hope that everyone will open their eyes, see the changes in the world, see the real situation and opportunities of the industry, and don’t be panicked and scare themselves because of some unfounded rumors.

Host: Since its birth, digital currency has been accompanied by negative information such as money laundering, running away, cutting leeks, bubbles, scams, etc. In the eyes of many traditional people, this industry has inherent original sin. What do you think of this idea?

Du Jun : This view is flawed. Blockchain technology and digital currency are both technologies and tools. Tools are double-edged swords. A knife can cut vegetables, but it can also kill people. Since the birth of mankind, there have been violence, plunder, murder and other terrible phenomena, but now human civilization is becoming more and more advanced. Since the birth of the Internet, there have been fraud, pornography, illegal transactions and other phenomena, but the Internet is now an infrastructure that we cannot do without.

The system developed by the Dutch Republic can be regarded as the ancestor of modern finance, and the Dutch East India Company was initially built with trade, colonization and plunder. In Christianity, because Adam and Eve ate the forbidden fruit, all people have original sin. Apart from religious factors, can we say that there is anything in this world that is inherently sinful? It is superficial to say that digital currency has original sin.

When Bitcoin was born, it brought about blockchain technology, which has now become one of the core technologies that countries around the world want to develop and take the lead in. Its strategic position is very important. What we should think about is how to build the blockchain industry in a more compliant, secure and efficient manner.

PART2: About the market

Host: After the US election, all kinds of global markets have been volatile. Especially after the news of Pfizer, the gold market has seen a huge drop, while BTC has maintained its previous gains and only fluctuated slightly at a high level. What do you think of Bitcoin's increasingly independent trend? JPMorgan Chase has warned of inflation and believes that the demand for Bitcoin may erode the demand for gold ETFs. What do you think of this?

Du Jun : Bitcoin will continue to rise. There are many reasons for this. Strictly speaking, it is an inevitable trend of the times. Let’s not talk about the price of the currency. Before, the supply side of the Bitcoin economic model was mainly formed by mining, and there was no clear scenario on the demand side. But now that some countries have begun to use Bitcoin as a national strategic reserve material, the market demand side of Bitcoin has basically been established. Bitcoin is digital gold, and it is a more superior value reserve than physical gold. As the consensus on Bitcoin grows, its value will continue to rise. It is normal for Bitcoin to divert the gold market. The greater the diversion, the greater the value increase.

Moderator: When it comes to Bitcoin, many people attribute part of the reason for this round of rise to Grayscale, a large buyer who only buys in and never sells out. The attention and recognition of Bitcoin by the family office behind it also gives the market strong confidence. The current price of Bitcoin has exceeded 16,000. What do you think of the market outlook? Is it expected to hit or exceed the historical high in 2017?

Du Jun : Bitcoin has been recognized and joined by the mainstream market, and has the potential to be traded as a commodity. From a longer-term perspective, it is not surprising that the price of Bitcoin has exceeded its historical high in 2017.

Host: Another interesting thing happened in the US election. The Associated Press wrote Biden's victory into the blockchain, and the industrial application potential of evidence traceability was further recognized. At the same time, Biden's campaign team announced on Tuesday that Gary Gensler, a former Goldman Sachs executive and former chairman of the US Commodity Futures Trading Commission, will lead the financial policy transition team for Biden. The industry expects that the US encrypted digital financial market will develop faster as a result. On the 11th, Kaplan of the Federal Reserve said that it is crucial for the Federal Reserve to work on developing a digital currency in the coming months and even years. What do you think of this? What signals are revealed behind it?

Du Jun : Blockchain technology plays a crucial role in the development of digital currency. It is an inevitable trend that the Federal Reserve will develop digital currency. This reveals several signals. The digital economy will be an important battlefield for global competition in the future. Not only China, but all of us are facing the impact and baptism of a new era. Against this background, the opportunities for the entire industry will become more in the future.

Moderator: Entering the fourth quarter, the DeFi liquidity mining model has gradually lost its popularity. After the frenzy of pursuit, the trend of related currencies has weakened. Previous reports show that 96% of the total DeFi transaction volume occurs on the Ethereum blockchain. Do you think Ethereum 2.0 will have a positive impact on DeFi? What are the main problems of the DeFi sector at present?

Du Jun : The rise of DeFi this year has given me a lot of surprises in many project applications. The way this field has developed has made me marvel at the magic of blockchain technology and let me see the possibility of decentralized finance. This field is still in its infancy and is worth looking forward to in the future. Ethereum 2.0 will improve the performance of DeFi in terms of underlying technology, which is of course beneficial, but I think that even with Ethereum 2.0, Ethereum is not enough to support the entire DeFi landscape, which is unrealistic, so more powerful public chains and cross-chain technologies need to be developed simultaneously. As for the problem of DeFi, I also bluntly pointed out that many people participate in DeFi projects not because of business needs but for incentives, resulting in transactions for the purpose of brushing volume to get incentives, rather than because of demand transactions, which is not closed-loop in business logic. If the business logic is not closed-loop, the problem is very serious. However, as the market grows, I think it will gradually improve in the future.

Host: In addition to BTC and ETH, BCH will also have a fork, Zcash will soon launch the Canopy upgrade halving, and ETC has just completed the Thanos (ECIP-1099) hard fork upgrade. Mainstream coins are frequently hot. But the price of coins seems to be relatively flat at present. How do you think the market will perform in the future? What suggestions do you have for investors?

Du Jun : I will not comment on the price of the currency. My suggestion is that investors should not make reckless operations.

Moderator: On November 6, the central bank released the "China Financial Stability Report (2020)", pointing out that the potential impact of CBDC varies greatly due to its type, operation mode and interest calculation mechanism; on the 9th, the Federal Reserve released a central bank digital currency research report to explore the intrinsic value drivers of CBDC; on the 10th, the UK Treasury claimed that it was drafting a draft to regulate private stablecoins, and was also studying the possibility of CBDC as a cash substitute. Research and discussion on CBDC in various countries are accelerating. What problems do you think need to be solved in the current launch of central bank digital currency? For digital currencies such as BTC, will the launch of CBDC be a threat or a booster?

Du Jun : For this question, I need to systematically explain to you why the central bank's digital currency is so important. When the central bank's digital currency is used in general, the general public may not feel the use of it and use Alipay and WeChat. But in third world countries, countries with weak banking industries, it is different. Many third world countries are poor, chaotic, and difficult to make money. The banking industry is unwilling to go there, so the financial industry is difficult to develop, and the integration of social resources is even more difficult. People go to high places, water flows to low places, and the same is true for capital.

With the advent of digital currency, people in third world countries can directly enjoy the benefits of modern digital finance and integrate social resources with a mobile phone. Whoever’s digital currency reaches the public first will be in a leading position in the world. So why are central banks in various countries rushing to launch their own digital currencies? Digital currency is a killer that can directly reach the C-end.

So is the central bank's digital currency a threat to Bitcoin? No, on the contrary, the two are in a mutually supportive relationship.

In the future, when a country's central bank digital currency is about to enter the market of a third world country, the other party has digital assets such as Bitcoin, and your central bank digital currency can be directly exchanged, then your central bank digital currency will have an additional medium. Correspondingly, when inflation is severe and you need to preserve value, buying Bitcoin is definitely more convenient than buying gold, so the two are mutually supportive. The significance of Bitcoin and digital assets is gradually becoming significant, which is the fundamental reason for supporting traditional financial institutions to intervene in this market in a big way. So why do I say that our industry is in a fission period and there are great opportunities? Why do you think PayPal supports Bitcoin payments? Why does traditional finance intervene in the Bitcoin market in a big way? Isn't it worth looking forward to such a big opportunity in the global market?

Host: I totally agree with your point of view. Let us look forward to better development of the industry!