After "graduating" from Ant, they flock to Web3

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

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

The total financing in Web3 for 2023 was only $3.6 billion, a decline of 78% compared to nearly $16 billion in 2022. Meanwhile, the AI sector saw financing reach $25 billion in the first half of the year. One of the largest venture capitals in crypto, Paradigm, is experiencing a paradigm shift, stating that it will no longer focus solely on the cryptocurrency and Web3 fields, but will expand its areas of focus to include AI.

People who once thought "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 more lively than before. In the bear market, there are still people discussing compliance, ZKP (Zero-Knowledge Proof), and Bitcoin ETFs. Some have also chosen to enter the market at this moment.

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

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

Of course, strictly speaking, Jerry is not a newcomer to Web3. After graduating from Tsinghua, Jerry worked in Silicon Valley for more than 10 years, and then returned to Shanghai in 2015, where he built Apple's Asia-Pacific R&D center. In 2017, Jerry joined "Ant Blockchain," which had not yet 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 Inc." Jerry feels that compared to his former employer, the Web3 pie still seems too small.

Of course, compared to AI which is over fifty years old, Web3 seems to still be in its adolescence.

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

Rebellion and instability, the growing pains that Web3 is experiencing, make the "parents" shake their heads. After the FTX crash with a market value of 32 billion dollars in November last year, regulators around the world began to impose strict regulations on this "little rascal".

At this juncture, by the end of 2022, Jerry left Ant Chain 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 reasons, Jerry quoted a famous saying from Ant: "Because we believe, we see."

The Artela team has chosen the public chain track, which belongs to the infrastructure of Web3 and is also known as the "highway" of Web3; without roads, nothing can be transported.

In the public chain sector, there are long-established Web3 genesis projects, such as Ethereum, which have already built their own moats through the "network effect" of their ecosystems. Additionally, there are several all-star projects that come with golden keys.

Now choosing a relatively crowded track, "WSJ." talks 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 has a long way to go." Recently, Jerry has been attending conferences around the world, which is the 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 often mentioned in the context of Web3. In other contexts, it can be described as the "iPhone moment for the industry" and the "last mile," but 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 (nickname: CP) once supported the underlying architecture of Ant Group's digital collectibles platform, Whale Scout. He stated that Whale Scout had already achieved over 100 million daily active users through the New Year’s activity of collecting five blessings. "At that time, it was already able to stably run billion-level transactions on-chain, while Ethereum was only at several million. 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 will definitely come up." CP's hair is slightly curly, and when he speaks, there's a hint of a Cantonese accent. He seems to be joking, which always gives people the feeling of casual conversation, but upon closer listening, the content he expresses is very professional and detailed. Ant Chain holds the largest number of patents in the world, and CP alone possesses hundreds of blockchain patents.

Regarding Extensibility, CP gives an example: "In games, besides the player input on the frontend, there are also backend elements, such as map refreshes, time and weather changes, or when a big boss is defeated, the small monsters next door will also be eliminated, etc. The blockchain does not have backend tasks, because all executions on the 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," where players design the rules and the system runs automatically.

For blockchain, which currently finds it somewhat 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 in AntChain, CP added, "In fact, current test data indicates that we are already able to approach two orders of magnitude on 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 EVM to the CPU of blockchain, we have added a GPU to the blockchain." In simpler terms, large games can be played on the blockchain in the future.

"In the era of Internet finance, services like Jiebei and Huabei are innovations that have gone from 0 to 1. We, as a group, have experienced the process of transforming a vague concept into a concrete commercial product, understanding the complexity behind it." CP believes that walking the same path again in the era of public chains presents many challenges, but fortunately, we have experienced references.

Most of the team members at Artela come from Ant Group. "A cohesive team of a dozen people makes progress similar to that of a team of twenty or so." Established only a few months ago, 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, and Amino Capital.

Artela's testnet launched in September, and currently the ecological partners are adopted through a targeted invitation system. Defi and Fully On-chain Games may both become future focal points. CP said that Artela does not intend to engage in the typical airdrop and regular combination punches that public chains do, but rather wants to explore innovations with ecological applications. They will focus on development in the coming months and officially launch a public test around December.

It can steadily run hundreds of millions of 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.

Just as the decentralized nature of Web3 should bring about "open source" rather than "patents". Compared to the mainstream public chain technology directions abroad, there is a certain "incompatibility" with the non-token blockchain, also known as the consortium blockchain, which is more suitable for the domestic context. Ant Chain aims to pave a different path for Web3 in China, focusing on open consortium blockchains and industrial Web3.

As early as 2017, Ant had already believed in the future of blockchain. At that time, the industry was not yet mature, but Ant had regarded blockchain as a core strategic focus. "At that time, Ant said it would invest heavily, but in reality, not many people understood it. We were a very small team. After reading a lot of foreign literature and reports, I felt that this thing still had great potential, especially in the context of globalization, where financial applications could be very valuable."

Jerry, who serves as the Chief Architect, has started to study the white papers of Bitcoin and Ethereum. As his research deepens, he increasingly believes that blockchain is the next stage of "using technology to serve finance."

In the same year, Jiang Guofei, the "brother" of Ant Chain, joined Ant Financial as Vice President and President of the Financial Technology Division, overseeing Ant Blockchain. The strategic level of Ant Chain within the group has been continuously elevated. Ant Chain is gaining momentum, with applications in cross-border remittances, supply chain finance, electronic invoices, judicial storage of evidence... For a time, applications based on the industrial end were fully implemented and flourishing.

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

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

"We have an engineer at Ant Financial who wrote 'Engineer' on his dating profile, describing himself as a coder, but no one clicked on his profile; the girls were not interested in him. Later, he changed his profile to '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 this decision "is no less 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 application.

Taking cross-border remittances as an example, a relevant person in charge from Ant Group told the WSJ that there are technically no barriers to cross-border remittances, but the support for this technology varies by the policies and regulations of each country, making such projects closer to customization. "At that time, we collaborated with Standard Chartered Bank, which has always been our long-term partner."

Even during the Spring Festival, Jingtan, which has over a hundred million daily active users, faces the problem of unsold collectibles and difficulty breaking into new circles. The digital collectibles previously launched by Jingtan were 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 of great interest to family members, and Jingtan may be the easiest product for them to understand.

"Although Ant Group is already 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 its 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 alliance chain, which strips away the concept of digital assets, has no basis for rights confirmation incentives. "The alliance chain only takes on data-level aspects; to truly reconstruct production relationships, I think we are still far from that stage."

"To truly run a commercialized scenario, having a blockchain is not enough; there are still many aspects of technical support that are not in place, and end-to-end operation is needed.