Meter.io founder Zhu Xiaohan: Providing the crypto world with a good currency that transcends national boundaries and is issued by everyone - Exclusive interview with Wabi.com

As one of the most watched projects in 2020, DeFi has continued to grow since its emergence, and many blockchain projects have begun to actively deploy DeFi applications. Recently, Wabi.com has paid attention to Meter. Kiki, CEO and co-founder of Wabi.com, had an in-depth conversation with Mr. Zhu, CEO of Meter.io. The following is the transcript of the interview:

Kiki

Hello Mr. Zhu, maybe our friends in China don’t know you very well, please briefly introduce yourself.

Zhu Xiaohan

My name is Zhu Xiaohan, I am the CEO of meter.io, and I currently live in Silicon Valley. I have a background in finance and engineering. Before founding meter.io, I had more than 10 years of experience in technology research and development, as well as many years of experience as an investor.

My first 10 years of experience were mainly in charge of technology research and development at Microsoft, Sony, Motorola, and Huawei. After 2013, I helped China's Jiuding Investment to develop its private equity investment business in the United States. Since 2016, I have established a VC fund, mainly investing in financial technology projects. So in general, the establishment of meter.io is actually a combination of previous technology research and development experience and financial experience, and some attempts in the field of cryptocurrency that are completely different from existing projects. I hope it will bring some beneficial help to the development of cryptocurrency.

The main investors of meter.io project are Pantera Capital and DHVC in Silicon Valley. These two investment institutions have very high professional strength in the blockchain circle and can be said to be the top investment institutions in Silicon Valley. Pantera Capital invested in star projects such as Zcash and Ripple in the early days of blockchain. Since 2019, Pantera has mainly focused its investment targets on the DeFi field, investing in projects in the DeFi field including Compound and MakerDao. Meter is also one of Pantera's layouts in the DeFi map.

Kiki

You previously worked in engineering and finance. What brought you to the digital currency industry?

Zhu Xiaohan

Since 2016, financial technology has been a major investment direction of my fund. We invested in some blockchain projects such as Brave and Aion (then called NuCo) in the early stage. In 2017, they started to issue coins, and we gradually invested in some cryptocurrency projects. In this process, I gradually realized that the combination of cryptocurrency, blockchain and finance is a long-term trend in human society.

In this big trend, many products and organizational forms that exist in the traditional financial world will reappear in a decentralized form and evolve according to their own characteristics. In this process, many different products with user value will be produced. In the financial field based on traditional Internet technology, there are many products that have gained a large number of users, such as the most basic Alipay and Internet lending products. They are all large-scale and provide users with many services.

In the decentralized world, based on blockchain technology, we found that decentralized finance, or DeFi, should also generate huge application scenarios and user needs. However, the goal of all the projects we saw at the time was to build a world computer and a decentralized Internet, but there were still many basic problems in the decentralized financial system that had not been solved. Only when these problems are solved can the commercial entities in this financial system develop and grow on a large scale and build a truly valuable financial system. That's why we decided to create Meter.io to solve these problems.

Kiki

DeFi can be said to be one of the most popular concepts in the past two years, but there are also pessimistic voices. I wonder what Mr. Zhu thinks of these voices?

Zhu Xiaohan

Our company was founded in March 2018, and its name was Decentralized Finance Lab at the time. After we discovered various problems with the scalability of decentralized finance, we did a lot of work in this area. In 2019, when DeFi was not yet popular, we started to hold many offline DeFi Meetups in Silicon Valley. We invited all the leading DeFi-related projects in the blockchain industry, such as Compound, MakerDao, dydx, 0x, etc., as well as well-known investment institutions, such as Pantera, Paradigm, Electric Capital, DHVC, etc. to participate in our activities. Each event will be attended by 200-300 Silicon Valley cryptocurrency professionals.

We have done a lot of research in the DeFi field from various angles and methods to explore every aspect that is most suitable for the scale of decentralized finance, including the monetary base, economic model, consensus mechanism, etc.

The current DeFi can be said to be DeFi for Ethereum. In addition to Ethereum, the assets traded on the DeFi platform are mainly ERC20 tokens left over from the ICO era to circumvent regulatory trading and lending needs. This determines that the scale of counterparties with real borrowing and buying needs will not be large. In the early days, due to the small number of suppliers, there will be a premium for excess returns. In the long run, except for people with special needs, it will not have a sustainable advantage over centralized products. Only changes at a more fundamental level can solve the problem of scale.

There are three problems with Ethereum’s design:

1. Ethereum will compete with its own ecosystem. Why do we say that Ethereum will compete with its own ecosystem?

Both Ethereum and Bitcoin are deflationary economic models. For example, financial products in this model are like a manager of a US stock fund that must be priced against the S&P 500 index. Only when your fund can beat the S&P 500 index every year, the fund will rise. This requirement is basically difficult for any fund manager to achieve in the long term, and it will be difficult for you to sell your fund products.

The same problem is encountered when issuing financial products on Ethereum. The financial assets you issue need to compete with Ethereum itself. If the financial assets you issue cannot continue to outperform Ethereum, no one will hold your financial assets for a long time. This is the competitive relationship between Ethereum and its own ecosystem.

Therefore, as a financial system, it needs to have a stable base currency at its bottom to serve as the unit of account for the entire system to measure value.

2. There are limitations on the native assets of the DeFi ecosystem.

DeFi products in the Ethereum ecosystem can only be limited to the Ethereum ecosystem in terms of native assets, that is, tokens based on ERC20 and ERC777, because Ethereum attempts to capture the value of the platform level or "fat protocol". This results in the need to focus on creating surplus value at the ERC20 token level. This will make it very challenging to achieve a sustainable business model. Many application projects can only choose to move to their own chains in the end. For example, the developers of cryptokitty and Aragon have decided to leave Ethereum and use their own proprietary chains. This will result in limited high-quality native assets on Ethereum. In the long run, it relies on traditional assets (including fiat currencies) to be on the chain. From this perspective, it also explains why cross-chain projects such as Cosmos and Polkadot are popular with developers.

3. Ethereum and Bitcoin consensus are not designed for financial scenarios

Ethereum 1.0 and Bitcoin are both based on the PoW longest chain algorithm, and ultimately on a probabilistic consensus based on economic interests. Therefore, when transferring money on an exchange, you generally have to wait for a certain number of blocks to prevent the blockchain from rolling back. But how many blocks you have to wait for to be safe is actually related to the amount of the transfer. The larger the amount, the greater the motivation for an attack in theory, and the longer you have to wait. When 7,000 bitcoins were stolen from Binance last year, Binance actually had a few days to work with the mining pool to roll back the bitcoin transaction, but CZ rejected this option in the end. In a financial scenario, users need certainty, and the underlying design based on economic probability will have great limitations.

Ethereum 2.0 attempts to solve this problem to some extent, but it is not ideal. It takes several minutes to achieve true confirmation. In addition, Ethereum 2.0 and 1.0 are actually two different projects except for the same team. The difficulty of asset transfer between these two projects is no different from that between Ethereum 1.0 and other projects.

Kiki

What is the original intention and goal of Meter?

Zhu Xiaohan

The original intention and goal of meter.io is to fulfill Satoshi Nakamoto's last wish: to provide the crypto world with a good currency that transcends national boundaries and is issued by everyone, and to provide a good infrastructure for the DeFi ecosystem.

The most basic infrastructure of a financial system is currency. Without a good basic currency, decentralized finance can only be a building on the beach. Good currency can provide a sustainable development soil for the future development of decentralized economy. From the perspective of infrastructure, we will first solve the problems of currency and transaction performance, and then in the next stage, we will solve the cross-chain problem.

Kiki

Did the team encounter any difficulties when working on the Meter project?

Zhu Xiaohan

The main factor is the overall market situation of cryptocurrency. Cryptocurrency is a highly liquid market, and the focus and direction of the market change every few months. However, the technical development of a project takes time and cannot be achieved overnight. Therefore, there are high requirements for the team's belief, cohesion and product development capabilities. In this process, we also withstood a lot of pressure and temptation, persisted for 2 years, and finally delivered a very complex mainnet.

In this process, we also see that the development efficiency and capabilities in the field of cryptocurrency are still difficult to scale at this stage. Having more resources and more people does not necessarily mean that better and more stable products can be developed. Many well-known projects that have raised a lot of money have repeatedly missed their deadlines, and the things they finally produced are embarrassing. Our small team's focus on operations can actually keep up with the times. At the beginning of the year, ICO Analytics published a list of all well-known projects in the market that have opened incentive test networks. Meter started relatively late and was the only one that did not do private financing. Instead, it was the first project to launch a fully functional mainnet.

Kiki

What major plans does Meter have recently?

Zhu Xiaohan

We will release the Meter mainnet in June 2020. After the mainnet is online and stable, we will go online on the exchange as planned to allow more people to participate. In this way, a large number of miners and nodes can join the Meter ecosystem, and Meter's economic model can start to operate.

We have many community members and meter.io project followers participating in the current testing phase. On our testnet, more than 90 verification nodes on the PoS chain have participated in maintaining the security of the network, and 15P of computing power on the PoW chain has participated in network testing. The meter.io community's support for our project is huge.

This means that developers in the DeFi field, including ourselves, can start developing products on the Meter public chain. Since we are compatible with Ethereum's EVM in terms of technology, developers who previously developed products on Ethereum and other public chains can directly develop on the Meter public chain without having to learn new technologies. However, they can use Meter's native stablecoin MTR to design many new products. At the same time, they can enjoy high performance, low latency, and instantly confirmed transaction experience. These are also some of the basic functions of our new generation of DeFi public chain infrastructure.

Kiki

What is Meter’s future strategic layout?

Zhu Xiaohan

Strategically, it is divided into several major nodes.

The first node is the mainnet launch. The mainnet launch is just the beginning for us. After the mainnet launch, we will first focus on optimizing network stability, performance and decentralization.

The second node is to bring the currency function of MTR (Meter PoW-issued stablecoin) into play. As we all know, the biggest resistance Libra encounters is the compliance pressure from the government. One of the important reasons for this is that Libra needs to use the legal currency provided by users as collateral and issue currency as a centralized entity. The issuance of MTR is generated by mining in a completely decentralized way. In the world of Meter, everyone is a central bank and can issue currency. It is not bound to legal currency, and there is no collateral fund pool. As the developer of the project, we have not pre-mined MTR. Therefore, MTR has a huge natural advantage in compliance, and regulators in various countries do not have many reasons to restrict the use of MTR. MTR can not only be promoted in developing countries, but also in developed countries without worrying about compliance risks such as securities. In addition to the United States and China, we have many users in South Africa, Eastern Europe, Latin America, and Southeast Asia. They pay attention to Meter completely because of MTR's truly borderless world currency. They hope that Meter will assume the function of currency in their lives, so that they don't have to bear the disadvantages of their existing legal currency.

The fourth node is to develop the DeFi product ecosystem based on the Meter public chain. MTR and MTRG themselves will have a lot of trading and mortgage needs. We will also introduce more assets in various ways and improve Meter's cross-chain capabilities. meter.io can use the side chain and parallel chain structure to make DeFi ecological products not limited to a public chain ecosystem. In the future, our underlying foundation will be connected with Bitcoin, Ethereum, Cosmos, Polkadot, etc. to realize the real scale of DeFi's decentralized business.

Kiki

Compared with other well-known public chains in the world, what are the core advantages of Meter?

Zhu Xiaohan

Meter's core advantage is that it has a reliable base currency MTR that transcends national boundaries and everyone has the right to issue currency. The issuance of MTR relies on miners to invest in mining machines, electricity and other costs. Through mining, the value of MTR can be bound to the competitive electricity price globally. The value of the physical world is truly transferred to the crypto world.

It provides a completely decentralized and stable monetary foundation for the DeFi ecosystem and the crypto world. Only on a reliable monetary foundation can a sound economic system, financial products and decentralized financial ecosystem grow.

The logic of most public chains is 2B or to developers. Meter's primary goal is not to build a public chain to attract developers, but to attract users with end-to-end experience and decentralized low-volatility value storage, or 2C. The reason why we start from the bottom is that all current public chains cannot meet the needs of decentralized finance in terms of economic model or architectural design. After Meter's mainnet is launched and a certain amount of users are accumulated, it will naturally provide enough value to developers. Only when developers can continue to make money can it truly attract developers' investment.