Li Rongbin, the founding partner of SevenX Ventures, shared the investment logic, areas of focus, and personal views on the market.
Interviewee: Li Rongbin, Founding Partner of SevenX Ventures
At 7:30 on Wednesday evening, we invited Eraser, the founding partner of SevenX Ventures, to chat with you, talk about their investment logic, and by the way, talk about the recent market situation!
AMA session
Q1: Let us first briefly introduce SevenX, the areas of focus, your past portfolios, and your background!
Eraser : Hello everyone. I am Li Rongbin, the founding partner of SevenX Ventures. You can call me Eraser or Eraser. This is my nickname.
SevenX is a cutting-edge investment fund established last year, focusing on discovering early entrepreneurs and projects in the blockchain field, focusing on primary market investment and continuing to serve entrepreneurs. Although we are a new brand, all three of our founding partners and teams are veterans with more than 5 years of experience in this industry. Before founding SevenX, each of our founding partners had their own blockchain fund, and had also experienced several rounds of bull-bear conversion, and gained a grasp of market and technological innovation.
In investment, we insist on not being a follower, but through our unique theoretical model, as early as possible to discover non-consensus assets. And an excellent early-stage entrepreneurial team. And while providing financial assistance, as much as possible to help entrepreneurs at the strategic, business logic, token economic system design and marketing levels, and provide due value. We believe that in today’s blockchain entrepreneurship and investment environment, VCs that only provide capital and resource support will be gradually eliminated, especially in the context of the rise of community capital and the gradual growth of community power. Sushi is actually a good example.
Because the SevenX team has also experienced countless failures in the previous 5 years of investment experience. These failures are a valuable asset for us. We hope that we can pass on these wealth to entrepreneurs, so that entrepreneurs can avoid detours, and we can also accompany entrepreneurs and provide value while getting our own growth and progress.
We have been paying attention to the DeFi track since the beginning of last year, and we are also one of the first VCs in China to start DeFi investment. We are DODO’s angel investors and continue to raise in the second round. We are also cooperating with DODO in the process of economic system, strategy and marketing and other levels. We are also the first investor in Furucombo, angel investors in projects such as Opium, Shield, Kine, and InsureAce. We invested in Zerion strategically last year, and we are very happy that Zerion has played a very important Interface role in today’s DeFi field. DeFi is a direction we will continue to care about. We firmly believe that DeFi will bring considerable value to human society. The DeFi directions we will focus on next include decentralized derivatives, innovative lending protocols such as credit loans, innovative aggregators acting as traffic portals, wallets and other infrastructure. At the same time, they will continue to place bets on key DeFi components such as privacy, layer 2 networks, and oracles.
We are also one of the first VCs in China to invest and pay attention to NFTs. We have also carried out a matrix layout of the NFT ecology under our own logic system. Starting from the underlying technical system, we, Framework and Pantera jointly led the investment of Rangers Protocol, and they are committed to achieving the cross-chain and scalability of NFT. On top of this, we invested in Alchemy NFT, and they made interoperability between different NFTs. In the middle layer, which is the content and application layer, we invested in MintGate, BeeperDAO and Show Me. They all use NFT as Pass to enter social networks or different content. At the upper level is NFT+DeFi. We have invested in Taker and Niftypay. They act as representatives of NFT lending and help improve the financial ecology of NFT. The top traffic layer includes wallets and communities. Here we invested in Blocto, the most successful wallet in the Flow ecosystem, and YGG. On the left and right of the whole system are collectors and creators, respectively. We voted for Whaleshark, the world’s largest collector community, and MY NFT, which connects creators from the East and the West.
Other areas of our concern include Arweave ecology and AR-based storage computing paradigm. We have invested in 5 AR ecological projects. As well as cross-chain related solutions and new public chain ecology, they are mainly concentrated in Polkadot and NEAR.
I myself have a dual background in technology and business. I graduated from Nanjing University with a bachelor’s degree in computer science and technology and a minor in finance. The master’s degree at the University of Waterloo is biased towards business. After returning to China, I worked in the strategic consulting industry, and later joined a large central enterprise as a deputy general manager in charge of strategy and investment. I have worked in more than a dozen countries in Africa for nearly 6 years to implement the country’s One Belt One Road investment strategy. It was also at that time that I realized the fragility of the legal currency system and came into contact with the blockchain. Because of my technical background, I am relatively able to understand the body, and this has led to my beliefs.
Here is an interesting story to tell everyone. When I was working in Africa, I went to many countries, including Nigeria, Angola, Ethiopia, Chad and so on. The fiat currency systems in these countries are very unstable, and they often depreciate by 50% within a year. I experienced two very large currency devaluations in Nigeria and Angola. It’s very uncomfortable. At that time, I thought that if there was a decentralized monetary system that was not endorsed by the government, that would be fine, and there would be no such problem. At this time, I encountered the blockchain technology, so belief was born.
Q2: Your speech on the logic of NFT track investment at the “Cyber Beijing Digital Art Festival” was very wonderful. Can you share with you, from infrastructure to superstructure, your investment logic in the NFT field?
Eraser: Actually, in the answer just now, we have probably revealed our investment logic in the NFT field. We have established our own investment logic around the NFT ecosystem. We have established an architectural model for the entire NFT industry. From bottom to top, they are: a foundation composed of Layer 1, a metadata storage layer composed of decentralized storage solutions, and an interactive protocol composed of a combination of cross-chain protocols and smart contracts. And the content layer composed of various usage scenarios of IP and NFT. Above it is the financial layer that combines NFT and finance. The roof is the aggregation layer of the NFT, and the pearl on the roof is the traffic layer, that is, the community, which introduces traffic to all the layers below. On the left and right sides of this house are the collector community and creator platform respectively, which constitute the producers and consumers of this house.
We attach great importance to the establishment of logic in our investment, that is, the projects we invest in must find their place in this building and continue to collaborate with the upper and lower floors. We hope to build a relatively complete building through our Portfolio, allowing them to have strategic collaboration and value associations. This has been reflected in some of our investment projects. For example, Taker’s NFT lending can be combined with the creator platform we invest in to support their issued assets as collateral, and Whaleshark’s collector community provides buying power. And this closed loop can also be completed on the underlying facilities provided by Rangers, and store Metadata on AR through our invested Ardrive. And YGG can provide traffic assistance and community diversion for these projects (if play to earn).
Q3: Among them, you mentioned that games and social interactions are the basis of the Metaverse world. YGG is a very interesting project. Gabby also did an AMA with us some time ago. Let’s talk about the reasons why you invested in YGG.
Eraser: Actually, the foundation of Metaverse, we haven’t fully understood it yet, and we have completely determined it. But what we know is that the bottom layer must be an asset, whether it is land, space, or the basic NFT inside, including the ID itself, it can be the basic asset (the decentralized domain name system DAS we invested in). Various behaviors are aggregated on it. The creator economy is the most important economic activity in the meta universe, and the community and social interactions may be organizations in the meta universe in the future, even gangs and political parties.
When we invested in the first round of YGG, we realized that YGG is not simply a union organization, organizing players to play to earn production. And if it continues to develop, it will become the earliest gangster prototype in the meta universe. The gang here is not a derogatory term, but refers to a form of community organization. There is no centralized government and legal system in the meta universe, so community consensus will become the most important standard of behavior. Such an organization continues to extend through the genius SubDAO design plan, whether it is in terms of location, content, and SubDAO that continues to conquer the city in an authorized manner, then the power of YGG in the future is hard to imagine.
Many people are also questioning YGG’s valuation, but personally feel that as a new species, there is no way to use a traditional valuation method to give YGG a reasonable valuation system. I think there is a lot of room for imagination in the future, but we also need to pay attention to risks.
Q4: NFT is very popular recently, from pictures to music to txt, how do you see this wave of craze? We have CryptoPunks, Penguins, Loot and so on. Do you personally like any projects? (Do not make investment advice)
Eraser: I think the future of NFT is all-encompassing. We don’t actually invest in NFT as a track. The concept of NFT is very large. From finance, art, collectibles, games, entertainment, ID and even the future, it can be said that all objects in the real world can be abstractly expressed by NFT. We say that NFT is a racetrack just to make it easier for everyone to understand.
I personally actively participated in this NFT boom. Invested a lot of Art Blocks and Loot. I think the innovation of NFT is still very early. Although there is a huge bubble in this field, you can still participate in the front line to understand the logic, value and community of these NFT projects under the premise that personal risks can be taken. I am personally a fan of art collections, and I love generative art very much. My wife Reva is also a leading encryption artist in China, whose main creative direction is code generation art.
From the perspective of avatars, I personally feel that the main values are condensed in the consensus of the community. At present, the application scenarios of NFT are not sufficiently diversified and sufficient. We will participate in investment in all aspects from the perspective of NFT application to consolidate the value foundation of NFT. So if you have any suggestions, just buy what you like hahaha, even if you can’t sell it later, you won’t regret it.
Q5: The market volatility in the past two days is also very large, Eraser, do you think this is a sign of a bear market?
Eraser: I didn’t move my position. I think the bear market still depends on the macro economy, that is, whether the release of water will be recovered. In September, we should see whether QE will be tightened. I think next year may be less optimistic, after all, it won’t work to let the water go down like this. As the epidemic slowly became normal, the international economy slowly recovered. If printing money does not continue, I think a bear market may come. I personally think it will be before the New Year next year. Don’t make any predictions! Don’t make investment reference!
Q6: SevenX is a cutting-edge fund established in 2020. It has also invested in many star projects. In addition to financial support, what help will you provide to these projects?
Eraser: Because I came from the strategic consulting industry, I feel more in strategic analysis. In addition, the third partner will be more professional in marketing, so he will help the project to lay out the marketing perspective.
Another thing we are good at is economic system design. We will help many projects to design economic system-related things together. Work together to formulate the economic system, the distribution of tokens, how to use tokens, and how to deal with inflation or deflation in the macroeconomic system.
Mainly these are the above. Otherwise, it is to accompany entrepreneurs. Whether it is psychologically or emotionally. Everyone knows that starting a business is very difficult. Entrepreneurs often face a lot of pressure. As partners of entrepreneurs, we will always be with us, and enlighten us if we encounter pressure!
