After "graduating" from Ant, they flock to Web3

Two technology revolutions that are highly anticipated in the tech world are AI and Web3. AI is expected to reshape productivity, while Web3 is anticipated to reshape production relationships.

In the tech world of 2023, there is significant news almost every day; it is the year of generative AI and also the year of deep bear market for Web3.

In 2023, the total financing for Web3 was only $3.6 billion, a decrease of 78% compared to nearly $16 billion in 2022. Meanwhile, the financing in the AI sector reached $25 billion in the first half of the year. One of the largest venture capital firms in crypto, Paradigm, is undergoing a paradigm shift, stating that it will no longer focus solely on cryptocurrency and the Web3 space, but will begin to expand its focus to AI.

Those who once believed that "Web3 is the new sexy" now feel that "Web3 is no longer sexy" and have turned to AI.

But it must also be acknowledged that this deep bear market in Web3 seems to be livelier than before. Even in a bear market, some people are still discussing compliance, ZKP (Zero-Knowledge Proof), and Bitcoin ETFs. There are also those who choose to enter the market at this moment.

"When I communicate with colleagues at Ant, I often draw parallels between AI and Web3, as their development trajectories are quite similar." Jerry Li analogizes that over the past sixty years, there have been three waves of artificial intelligence, each time with billions to tens of billions in funding, with peaks and troughs constantly alternating, until OpenAI emerged. "This new large-scale technological revolution requires going through one cycle after another to truly bring about leapfrog development."

Jerry Li has had several prominent labels: former chief architect of AntChain, former director of R&D for Apple China, top scorer in the college entrance examination in Shanxi Province, and now he has added another one------a newcomer in Web3.

Of course, strictly speaking, Jerry is not a newcomer to Web3. After graduating from Tsinghua University, Jerry worked in Silicon Valley for more than 10 years, and then returned to Shanghai in 2015 to establish Apple's Asia-Pacific R&D center. In 2017, Jerry joined "Ant Blockchain", which had not yet been upgraded to "Ant Chain", at the P10 level.

"The industry is still too early; compared to AI, it hasn't even reached the previous round of development. Currently, the total market value of the entire cryptocurrency market is less than half of that of Apple alone." Jerry compared to his former company believes that the Web3 cake still seems too small.

Of course, compared to the AI that has surpassed fifty years, Web3 seems to be in its adolescence.

The concept of Web3 was first proposed in 2014, with its predecessors "cryptocurrency" and "blockchain" concepts being introduced in 2008 through Satoshi Nakamoto's "Bitcoin White Paper", which is only 15 years ago.

Rebellious and unstable, the growing pains Web3 is experiencing have left "parents" shaking their heads. Following the collapse of FTX, which had a market value of $32 billion last November, regulators around the world have begun to impose strict regulations on this "troublesome child."

At this juncture, at the end of 2022, Jerry left AntChain and officially went all in on Web3, starting the public chain project Artela. He stated that he would not consider doing anything else in the short term. When discussing the reason, Jerry quoted a famous saying from Ant: "Because I believe, I see."

The Artela team has chosen the public chain track, which belongs to the infrastructure of Web3, also known as the "highway" of Web3, where there is a road, everything can be transported.

In the public chain track, there are long-established Web3 Genesis projects, such as Ethereum, which have already built their own moat with the "network effect" of their ecosystem, and there are also several all-star projects that come from a golden key background.

Now choosing a relatively crowded track, "WSJ." chatted with Jerry about his views on "first mover advantage."

"Although there is a lot of competition in the public chain market, it is still very imperfect and there is still a lot of room for improvement." Recently, Jerry has been attending meetings around the world, which is his first step in adapting to his new identity. After running a circuit, he gained a lot. "After communicating with many projects, our confidence has actually increased."

The biggest difference between Artela and other chains lies not in the current "involution" of Scalability (performance scalability), but in Extensibility (functional scalability), and it is compatible with EVM (Ethereum Virtual Machine), allowing developers to transfer applications with one click.

This is to prepare for the future of Mass Adoption.

Mass Adoption is a term frequently mentioned in the context of Web3. In other contexts, it can also be described as the "iPhone moment of the industry" and the "last mile," but in fact, the core issue is quite clear: how can we enable ordinary people to use Web3?

The "Ant Gang" in the internet era is the architect of Mass Adoption. In their context, Mass Adoption is more about building another "Alipay" in Web3.

Of course, it is filled with experience. Artela's CTO Qiu Honglin (alias: CP) has previously provided underlying architectural support for Ant Group's digital collectibles platform, Whale Explore. He stated that Whale Explore had already achieved over 100 million daily active users through its New Year’s event of collecting blessings. "At that time, it had already achieved stable on-chain transactions at the billion level, while Ethereum was only in the millions. From a certain perspective, it can be said that Ant Chain has truly reached Mass Adoption."

CP was once an OG of the Ant Chain team. He joined the initial form of Ant Chain in 2015, when it was still an interest incubation group.

"They say that if someone in Ant Group wants to talk about blockchain, by the time they ask the second person, my name is definitely mentioned." CP has slightly curly hair and speaks with a hint of a Cantonese accent, making it seem like a casual chat, but upon closer listening, the content is very professional and detailed. Ant Chain holds the highest number of patents globally, and CP alone possesses hundreds of blockchain patents.

Regarding Extensibility, CP gives an example: "In games, besides the player inputs on the front end, there are also back-end elements, such as map refreshes, time and weather, or when a big boss is defeated, the small monsters next door will also be eliminated, etc. In blockchain, there are no back-end tasks because all executions in blockchain must be interacted with by the users."

In the future, running Fully On-Chain Games on Artela may become "the Earth keeps turning without you," meaning players design the rules, and the system runs automatically.

For blockchain, which currently finds it a bit difficult to play board games, achieving smooth interaction requires higher demands on the computing layer. "We want to achieve a hundred times that of EVM." Thanks to the experience accumulated on AntChain, CP added, "In fact, current test data shows that we are already able to approach two orders of magnitude at the computing level."

But they do not want to replace Ethereum; projects on the Ethereum chain can be transferred to Artela with one click. CP "abstraction" summarizes the features of Artela: "Simply put, if we liken the EVM to the CPU of the blockchain, we are adding a GPU to the blockchain." More simply, large games can be played on the blockchain in the future.

"The loan products like Jiebei and Huabei in the era of Internet finance are innovations that go from 0 to 1. Our group of people has experienced the process of transforming a vague concept into a concrete commercial product, understanding the complexity behind it." CP believes that taking the same path again in the era of public chains presents many challenges, but fortunately, there are experienced references.

Most of Artela's team members come from Ant Group. "A team of a dozen people works almost as well as a team of twenty." Established only for a few months, Artela has secured $6 million in seed funding, led by Shima Capital, with participation from A&T Capital, Big Brain Holdings, SevenX Ventures, Dispersion Capital, Amino Capital, and others.

Artela's testnet was launched in September, and currently, ecological partners are invited on a selective basis. Defi and Fully On-chain Games might both be key focus areas in the future. CP stated that Artela does not intend to engage in the typical airdrops and regular combo moves associated with public chains, but rather wants to explore innovation with ecological applications. They will be dedicating the next few months to development, with a formal public test expected around December.

It can steadily achieve over 100 million daily active users. There is no doubt that Ant Chain has already reached the ceiling in certain areas of Web3. However, their activity is somewhat subtly isolated from Web3.

As the decentralized nature of Web3 brings about "open source" rather than "patents." Compared to the mainstream public chains in foreign technology directions, the non-token blockchain, also known as consortium chain, which is more suited to the domestic context, also has a bit of "incompatibility". Ant Chain aims to pave a different path for Web3 in China, an open consortium chain, industrial Web3.

As early as 2017, Ant had already believed in the future of blockchain. At that time, although the industry was not yet formed, Ant had regarded blockchain as a core strategic focus. "At that time, Ant said it would invest heavily, but actually, not many people understood it; we were a very small team. After looking at a lot of foreign literature and reports, I felt that this thing still had a lot of potential, especially in the context of globalization, having financial applications, I think is particularly valuable."

Jerry, who serves as the Chief Architect, has started studying the white papers of Bitcoin and Ethereum. As his research deepens, he becomes increasingly convinced that blockchain is the next stage of "serving finance with technology."

In the same year, Jiang Guofei, the "big brother" of Ant Chain, joined Ant Financial as Vice President and President of the Financial Technology Business Line, overseeing Ant Blockchain. The strategic level of Ant Chain within the group continues to rise. Ant Chain is gaining momentum, with applications in cross-border remittances, supply chain finance, electronic invoices, judicial evidence storage... In a short time, applications based on the industrial end have fully blossomed.

In 2018, Alipay Hong Kong launched a blockchain-based cross-border remittance feature, allowing over 180,000 Filipino domestic workers to send their salaries home without having to wait for several days and paying relatively high cross-border fees. Inclusive finance, Ant Group achieved a successful case very early on.

CP also once became the company's internet celebrity engineer. Jack Ma mentioned CP during the second World Intelligence Congress, along with his widely circulated matchmaking anecdote.

"We have an engineer at Ant Financial who wrote on his dating profile that he is an 'engineer', a code-writing programmer, but no one clicked on his profile and the girls were not interested in him. Later, he changed his profile to say he is a 'blockchain engineer' and received over two hundred love letters."

In 2020, Ant Blockchain announced a brand upgrade to Ant Chain, and company executives stated that the decision "is no less significant than the decision to establish Alipay."

However, three years have passed, and Ant Chain, which is deeply engaged in the Web3 industry, has not welcomed a truly "Alipay" level of application.

Taking cross-border remittances as an example, an Ant Group representative told the WSJ that there are no technical barriers to cross-border remittances, but the level of support for this technology varies by country’s policies and regulations, making such projects more customized. "At that time, we collaborated with Standard Chartered Bank, which has always been our long-term partner."

Even during the Spring Festival, Whale Exploration, which has over 100 million daily active users, faces the problem of unsold collectibles and difficulty in breaking into new circles. The digital collectibles previously launched by Whale Exploration are mostly cultural and artistic products, which are hard for young people to find trendy. "But my dad really likes it; this is the only product I've made that he has consistently used." The work content of CP is highly regarded by family members, and Whale Exploration may be the easiest product to understand among them.

"Although Ant Group is very advanced in financial technology, the domestic regulatory framework mainly revolves around consortium chains. This actually removes the essence of blockchain, which is to use digital assets as their value representation. I believe that in the future we still need to pursue the path of public chains, but currently there is no soil for public chains in the domestic market." Jerry is more optimistic about the future of public chains.

The consortium chain that strips away the concept of digital assets makes it impossible to talk about rights confirmation incentives. "The consortium chain only undertakes data-level matters. To truly reconstruct production relations, I believe we are still far from that stage."

"To truly run a commercialized scenario, having a blockchain is not enough; many technical supports in various stages are still not in place, and it needs to run end-to-end.