Host: Blair Zhu, Mint Ventures
Special Guest: Lydia Chiu, VP of Business Development of Ava Labs
Youtube: WEB3 Founders Real Talk with Ava Labs
Podcast: WEB3 Founders Real Talk with Ava Labs
Blair: Hi everyone, welcome back to Web3 Founders Real Talk. We’re here to bring you very captivating conversations with the movers and shakers of Web3 industries. Today we are thrilled to have Lydia, the VP of Business Development of Ava Labs, on our show today. Welcome to our show, Lydia.
Lydia: Thanks, Blair. Very excited to be here and talk about what we will talk about today.
Contents
Introduction of Lydia Chui
Blair: Thank you so much for coming. Would you mind telling us a little bit about yourself? How did you land in this crypto space and also your project?
Lydia: Yeah, absolutely. So I started my career on Wall Street, like a lot of people who end up in Web3. I started at Credit Suisse, a large investment bank that, as of last year, I guess is no more. But I was on the buy side for 10 years and I invested in Internet, Fintech, SaaS, and video game companies. So, a lot of actually what I’m focused on now, but we’ll get to that. And after, it was in my course covering the Internet sector that I kind of discovered Bitcoin in 2013. And a bit of that, at that time, it was really being regarded as an alternative payments network, a virtual, literally a currency for payment. It was not really viewed as a store of value just yet. And it was decentralized. That was kind of the whole story then. So even though I started my career on Wall Street in 2007, right before the global recession, It was kind of revolutionary to think of, hey, maybe there is an avenue here. I didn’t make the shift into crypto at that point, but I definitely took notice. It was definitely in 2015 when Ethereum with the white paper and the pre-mine and all of that introduced programmability to assets on the chain, I guess, programmability to assets and value. That was really exciting for me because that was the moment it clicked where if you have these automated programs to execute transactions, you can transfer value without having a lot of the human oversight that you currently need in the traditional financial markets. So, at that moment, I was like, okay, this is much more interesting than what I’m doing. I started deep-diving into the sector. I was still working and spent a lot of time reading white papers. I didn’t really make my jump into crypto what I call Web2.5 until 2018. I joined a secondary marketplace. They’re no longer there. They were called SharesPost, but they were acquired by Forge Global. At that time, we just had the ICO bubble in 2017 and all these fundraisers, and the question kind of was, are these securities? And the goal of the digital assets unit that was spun up at SharesPost was to one, build a compliant marketplace with the existing broker-dealer and the ATS registration that they had. So their alternative trading system was basically like the regulatory assignment of an exchange that wasn’t an exchange. The second thing was to build up this global settlement network, which would connect a lot of broker-dealers globally and their equivalents to allow cross-border trade settlement. And we’re gonna build that network on Ethereum at the time too. That was also another interesting story. But it was in 2019 that I think I just kind of understood all of the work that had to happen on the regulatory front with kind of updating the registrations and getting regulators comfortable with the idea of holding digital assets. It became clear that I didn’t really want to do that for much longer. Then the opportunity came to join Ava Labs. I jumped right on that. It was much more interesting to me to work on the actual blockchain layer, Layer1. As I said, we were trying to build out this global settlement network on Ethereum and we kind of identified a lot of obstacles that were coming with the technology of Ethereum that was available at that point in time. But we can kind of talk through that a little bit. That was a long intro.
Introduction of Ava Labs
Blair: Wow, I love your story, especially from how you landed in this crypto space and how you find the concept is actually really promising. I’ve heard a lot of stories around, but I love your version of it. As we all know, Ava Labs is actually one of the pretty well-established projects, I think everyone is eager to know some backstage stories around it. So how did you find this? How did you establish this project? Can you maybe tell us a little bit about how did your funding team establish this project in the first place? What’s the thought process?
Lydia: Yeah, so I wasn’t around in the super, super early days. I joined in early 2020 and it was still a relatively small team. We’re working out of this co-working space in Brooklyn. It was even before COVID. It was a group of us working out of this co-working space Monday through Friday, coming in, leaving, and just working in person. It was actually kind of crazy now that we think about where we are now. But I think going back to the thinking and since I wasn’t physically present for early-on conversations, I can kind of go by what I know now and everything that we’ve talked about. The mission of Avalanche is to digitize the world’s assets. Given where our founder, Emin Gün Sirer, and obviously our COO, their backgrounds in distributed computing and where they were at the time, I think it was a bit of a personal endeavor to build out a network that can handle the kind of activity and the load that digitizing the world’s assets would require. So we need something fast, something lower cost, and obviously safer, more secure, and a lot more decentralized while being fault-tolerant. So kind of with the combination of the Avalanche consensus that was being innovated on at the time, then came the idea to like, OK, let’s actually build the network that uses Avalanche consensus. That was kind of like the impetus of it. We’re still working to digitize all the world’s assets, but we’re getting there slowly, one asset at a time.
Challenges & Pushbacks
Blair: Yeah, I can tell the whole Layer1 space can be really competitive. Well, I would say the whole Web3 crypto landscape could be really dynamic and fast-paced. So basically, we’ve been seeing different emerging narratives and trends over weeks, over months. We would like to know how you effectively manage and lead all those trends, especially as a pioneer in space. Have you faced any sort of challenges, pushbacks, or even headwinds throughout the journey?
Lydia: You know the Avalanche launched in September 2020, And here we are sitting three years later, pretty much almost to the anniversary of the launch of the main net actually. A lot has happened since then, we’ve seen a lot of different things. And just outside of Avalanche, there have been a ton of Layer1s. Now we have a great shift in Ethereum from proof of work to proof of stake. Now we have a lot of Layer2s, and a lot of new technologies have hit the market. I think from our perspective, we consistently strive to accomplish our mission. We consistently try to innovate and deliver tooling and technology on Avalanche, which is meant to really make tokenizing and writing smart contracts for any and all applications and assets. Though, as far as all the narratives go, it’s tribal, but my sense and a lot of the people here at Ava Labs are like, the pie is still really small. I think it can be very competitive, but let’s grow the pie bigger before we start fighting over all the slices. That’s kind of the one thing that I keep trying to push myself. Personally, it’s just like, how many people are there in the world? How many users of the Internet are there? And yet, Web3 can kind of feel like an echo chamber sometimes.
Primary Focus of Ava Labs
Blair: Yeah, I’m feeling the same. I feel like it’s still very nascent. Maybe let’s just give it more time. Once we have more technology and more applications, maybe we will have even mainstream adoption, but we’re not at that time yet. Also, can you share some of your current primary focus within Avalanche, Ava Labs? What’s your major focus right now? You keep saying that your mission is digitalizing the world’s assets, and it seems like you want to bring more assets on chain. Just tell us more about what’s the focus right now.
Lydia: Yeah. There are so many different types of assets in the world. We’re not just talking about financial assets or what people have labeled like real-world assets or on-chain assets. Very broadly, we think the ability of subnets to address many different use cases is kind of what brings the world assets on chain. So that includes gaming, obviously, institutional and traditional finance. There is also a use for consumer use cases in terms of loyalty systems or loyalty platforms. There’s also obviously, the ability to put payments on chain with different currencies, stablecoins, etc. So a long way of saying we are focused on all of those things. But if we go up one level, what we’re really focused on is allowing anyone who wants to build their application or build out their use case, to be able to use it on Avalanche and provide the tooling and also the architecture necessary to support those applications. You know, kind of specifically, the use of subnets as a way for the Avalanche network to scale, as well as create these custom modular networks for developers to build on. I think that’s a very nice confluence of ideas where it’s like, you don’t have to be beholden to the main chain or the main permissionless network in terms of competing for block space or even transaction ordering or anything like that. You can create your own environment where you have your own block space, or there’s an environment for different use cases. Like there was the movement team just announced their fundraise. What they’re bringing is a move-based ecosystem and really just pushing the growth of the move-VM and the language. Their first step will also include building out the M1, not L1, the M1 on Avalanche. It’ll be powered by the Avalanche consensus. It’s a subnet. And part of the appeal of that is that not every developer in the world will or knows how to code in Solidity or in order that they want to. Our sense is, we just want to meet developers where they are. We want to give them the option and the flexibility to build what they need securely and faster and cheaper than their current alternatives, be it like Web2 or whatever they’re using already. That’s kind of like one way of thinking. With that said, we are also working on a lot of different things for the Avalanche platform itself. There’s been a bit of news around the Hyper SDK, which is an SDK to help people build either custom VMs or whatever their app or use case is on a subnet. But also the focus of Hyper SDK is on performance. It’s on throughput. So that really prioritizes giving people a lot more TPS or transaction per second than what coding and Solidity or EVM can do. So that’s a bit of what we’re focused on, from a technological standpoint. Then on kind of like a business or strategy roadmap, it’s really still to help our partners understand how to best use Avalanche and how to best build their applications, be it on subnets or be it on the C chain or whatever permissionless environment they need. There are a lot of different programs that we’ve been helping partners take advantage of as well. So we kind of talked about all those, but it’s a lot, I know.
Blizzard Ecosystem Fund & Its Assessment Criteria
Blair: Yeah, I saw all those tweets and it’s very impressive because it seems like you guys are having really amazing progressive developments with all those partners. Like you said, let’s just grow the pie first. That’s the way we make the pie bigger. And also you talk a lot about developers, like how we lower the barrier for developers, and how can we ensure we’re going to have more comprehensive communities with all those kinds of applications even developers don’t have to really know how to code properly. Even the transaction costs could be a lot lower. That’s really impressive. Also, I know you guys introduced your own investment and grants program. Is there any sort of preferred sector you guys are currently focusing on? Can you elaborate on projects or sectors that you would personally prefer? As we have mentioned, there are a lot of emerging trends, and narratives, like real-world assets, like even SocialFi with friend Tech hype. Would any of them be attractive to your team?
Lydia: Yeah. So the grants program has always been supportive of innovation generally. And there is no specific focus for the program. It’s really open to any developers, any projects who are bringing an interesting use case, building a really cool app. There are different reasons for why they need funding. The investment fund, which is the Blizzard ecosystem fund, its mandate is also to seed ecosystem growth on Avalanche. While the themes or the types of projects that the fund invests in shift from time to time, it still also has a very diverse portfolio of companies in different industries as well. And the thinking is like, we, Ava labs, and anyone at the fund are not trying to pick the winning verticals or the winning sectors that will go viral or take blockchain mainstream, but we do want to support everyone who is building in space so that whatever they build has the best chance of success however they define success, as mainstream adoption or virality or like 5 million users, 5 million wallets, whatever it is. I don’t think any of us feel like we are trying to pick or decide for the industry what will make it succeed. We’re just trying to grow the pie as best we can.
Blair: Yeah, that’s interesting because there are a lot of projects that probably would say, oh, we will feel really bullish on one sector, but it’s really amazing to hear that you guys just be really open-minded and that you want to see if there’s any valuable, like the secret recipe in your project and you will just go for it. But I’m assuming you guys probably will be doing a lot of due diligence, and also internal assessment of those projects. Can you maybe walk us through the process or like what kind of qualities or what kind of core competencies you would consider essential or a must-have for developers or builders within your ecosystem?
Lydia: Our team has, like we start from our team, right? Our business development team, as well as our Blizzard deal team, have both generalists and industry experts. We have six vertical leads within business development that span institutional, DeFi, gaming, and enterprise. Generally, we’re focused on helping the projects in those sectors with our team’s expertise. The diligence that they do will vary from person to person specifically, but I think, what’s in common is, who’s on the team, people. When you’re talking about projects that are this early, the biggest piece that we need to be sure of is the people and what experience they have. We evaluate a lot, especially when it comes to different industries. Like, do they have industry experience? And then we also have some pieces where we evaluate the soundness of the actual business model or the use case, like a very typical financial analysis or investment analysis before we get there. But primarily, we are most focused on deciding whether or not people are great builders, they know what they’re doing. Secondly, are they dedicated to growing the ecosystem? Are they aligned with their viewpoint and how they approach Web3? I think that’s another critical piece. I mean, we can kind of go from there, but as far as industry-specific expertise, we do have a very diverse team that can go deep in each vertical that they own, as opposed to having a bunch of generalists. But we have generalists too, to help us analyze the sectors where we don’t have those experts. Generally, our team is very diverse.
Insights on Web3 Applications & The Driving Force Ahead
Blair: Yeah, that’s really good to know. And also I’m siding with you on this 100%. I don’t know about other industries, but I feel like for Web3 and crypto space, team readiness would be the key. Sometimes, all those entrepreneurs and builders have to be really selective on trends and what kind of sectors they would like to work on. They probably get to encounter a lot of distractions along the way. That’s what we have been seeing. Well, since we talked about the developers and your mission, we also would like to know, how you assess or what’s your insights on the current growth of the Web3 applications and its broader impact on the development and evolution of the centralized web ecosystem as a whole. What about its future? Because we said it’s still nascent, it’s a very early stage. I guess my next question would be, what will be the primary catalyst or the driving force for the next cycle? There are two questions, and it could be really tricky.
Lydia: It’s been some kind of journey, especially in this market. The answer to the second question, even when I was covering tech, there was no clear, everyone was focused on trying to pick the next big winner, the next big innovator, or the next big disruptor, right? But it never came in the form of technology. It was always one specific viral app, that all of a sudden you had huge user growth, just like exponential growth in the very short term. And then you had a market that followed very quickly after. So I think that is also what’s going to happen in Web3, like what takes Web3 to the next level and gets real adoption. We need that one, probably won’t be just one, but for simplicity’s sake, that one huge app that people love using, and maybe they don’t even know it’s powered by blockchain, doesn’t even matter. But the user experience obviously has to be relatively easy to use. If people love this app so much, they may be willing to go through some obstacles to using it, but not so much that, like it stops them in the track from email onboarding. But the point is, I think it takes that one killer app. And where that is, I think your answer will change depending on what you’re asking. But I’m really psyched about this new game that’s coming. It’s called Off The Grid, built by Gunzilla Games. They are killing it with like the graphics, and the gameplay, they just put out a preview video of some huge gaming personalities who are actually playing, it looks amazing. But also I was a gamer, and I also invested in video game companies. So I have a bit of a bias and a lean in that direction.
Blair: Yeah, I’m kind of feeling the same as well, because I think there’s like one big pillar that we want to maybe tackle would be how we can make the whole Web3 world more seamless, easier to enter, because normally people like new beginners could find it really overwhelming because they have to master wallets, they have to master private keys. And also, they have to learn how to use every single application. And also even like, name it, all those DeFi protocols, there are tons of applications, and maybe every single Defi would have a very different UI UX. So it’s not really good for people to use it in their daily lives. Apparently, GameFi could be one of the promising sectors, because definitely there are a lot of Web2 gamers. If we can just, like you said, make the whole thing more visually appealing, and also with NFT, with other kinds of things. It could be a fun ride for them. I think we’d love to see it.
Lydia: Yeah, there are so many possible ways I can go but being a gamer myself, there’s also something that’s happening in the relatively near future. So I’m very excited about that. And also, because it’s going to launch on my consoles, to begin with. So that’s already easier for people to access. It’s not going to be in the browser. You don’t need to create a wallet with a C phrase to start playing, you can just start playing. That’s one of the things that you really need just easy onboarding to start and to try it. But I’m gonna say like, not every project has such an obvious product that they want to bring. And to the point where, sometimes Blockchain isn’t easy for developers to build on either. Let’s say you’re building a game, and there is a whole engine that you need to build around, like the graphics, the actual gameplay, and all of the interactions with the gameplay engine, Blockchain is the last thing you want to worry about and want to think about. So why don’t we also include or offer a service that makes it easier to build on blockchain? And so at Ava Labs, we also have Ava Studios, and AvaCloud, which is a managed subnet offering. It really allows teams that are obviously focused on a critical part of their application and the network infrastructure piece is like secondary, they know that they need Blockchain. But, if we’re really supporting projects and kind of helping them make a really good product, and build their own business, why not offer a service that also makes development easier? That’s kind of another thing that we are focused on and kind of growing the pie and making it easier for developers to focus on what they really care about, versus kind of like, trying to understand how to fetch data from the chain, like with APIs or whatever, building out their own dashboard, stuff like that.
Blair: Yeah, entrepreneurs should be brains free from technical aspects, they shouldn’t be really worried about, oh, what is blockchain technology? How am I going to do with it? And it seems like it’s gonna eat up their lot of time and effort on this. But it’s good to see that you guys have been committed to having a much more developer-friendly environment for them. And also, they get to focus on, oh, maybe we want to think about product market fit, what kind of sector do we want to work on? What’s our growth hacking strategy? I feel like that’s a really substantial pain point in the industry right now, especially, since I’ve been seeing a lot more developers on board right now. So that’s good to hear. And also, I do agree with you about the internet, people don’t have to know about blockchain technology as a user. Imagine just asking our parents, they don’t really know about internet technology, but you’re using internet technology every single day. So I think that’s the ideal scenario for Web3.
Lydia: Yeah, our parents don’t know about the big tables that are connecting servers underneath, like on the bottom of the ocean. And then on top of that, nobody knows that Uber and Lyft live on AWS.
The Support Direction of Ava Labs
Blair: Yeah, they don’t need to know these things. They just know, oh, it’s really easy to use. And also, it brings massive convenience to their lives. So that’s why they keep using it and they would like to pay for it. Thank you for all those interesting insights. I guess my next question is, it could be a little bit tricky as well because I know you guys are pretty open-minded, you don’t want to pick the winning sectors or even trends here. But what are your thoughts on the current trendy narratives? We’ve seen friend.tech, we’ve seen RWA, we have seen LSD, layer2, and even trading bot has been extremely popular these days. Can you maybe shed some light on, whether Ava Labs has plans to support all these types of projects or sectors within your ecosystem, or what’s your personal take on this?
Lydia: Given my experience and what I have invested in and where I spent my time, both on Wall Street and also in crypto, and Web3, there are a lot of reasons to use blockchain to innovate and make the existing traditional financial markets much more efficient. That is where tokenization comes into play. And, real-world assets are having a moment right now. Even though we aren’t necessarily like, “picking winners”, we do want to be supportive of the verticals that we focus on. So, a couple of examples of how we do that are, especially with RWAs, we launched Avalanche Vista, which is a 50 million program by the Avalanche Foundation to purchase assets tokenized on Avalanche. That was really to help bootstrap the RWA market or RWA flywheel. We’re working with a lot of buy-side firms to jumpstart it as well. Some of the feedback that we’ve gotten from issuers as well as investors is that once you tokenize something, there isn’t necessarily any liquidity for it once it’s on chain. So this is, those of us focus on institutions, we’re working with buy-side to help address that. Rather than focus on the supply side or the asset tokenization side, as a lot of other platforms have in the past, in order to get to that next step, there has to be liquidity, and there has to be demand and distribution. So we’re focused on that. And there are a couple of others. We’ve worked with artists as a part of the Avaissance program which is more focused on NFTs and bringing digital art into Web3. That’s something I think the community has been very fond of actually, because it also brings in engagement from existing artists and they are mentors. We have artists in residence. So they offer classes to the people who are accepted into the program. There’ll be a couple of cohorts, but the first cohort has ended its series of classes. That’s not just grant funding, or that’s not just investment, that is actually involving the community, engaging them, and then offering content and education to artists who may not have been aware that Web3 art or NFTs is a thing. And now they have an idea of how to create their own collection or portfolio on chain. There was also a focus on DeFi, as there always has been, and was actually one of the first initiatives that the foundation launched back in 2021. It was called Avalanche Rush. And so a couple of different initiatives on the gaming side, we have Avalanche Arcad3, which is really more of a collision of Web2 and Web3 gaming industry players. On the Web2 front, the first cohort included GREE, which is a Japanese gaming and content media company. And then it also includes the Shrapnel team as well on the Web3 side. They’re also building like triple-A shooter. That’s also something we’re very fit about, but maybe get a chance to talk about it today. There are a lot of different things that we’re working on here to push forward and try to accomplish our mission of digitizing the world’s assets as our tagline. So again, we can say that we’re picking those six sectors like where we want to spend our time. But we’re very supportive generally. We try to help our community and those who are new to the community really figure out what they want to do.
Blair: That’s really amazing, because rather than just picking winning sectors, you guys are doing a lot of things for those communities, developers, and overall. Thank you for sharing your valuable insights, your expertise has been really valuable, and also to all those developers and builders. We’re definitely eagerly looking forward to seeing more innovations and more good news from Ava Labs in the future. Thank you, Lydia.
Lydia: No, thanks for having me, Blair. Thanks for the great conversation.
Blair: Same here. Thank you.
