Dongzhu is honored to have an exclusive interview with Zhu Su, founder of Three Arrows Capital, a major promoter of the last bull market. In addition to talking about the impact of the Bitcoin halving market, the development of Layer 2 technology and the trend of the re-staking track, the interview also provides in-depth analysis From the decentralized algorithm stablecoin USDe.
(Recap:The market value of USDe exceeded 1.57 billion Mg, ranking among the fifth largest stablecoins! Zhu Su: Exchanges may conspire against Ethena)
(Background supplement:Zhu Su from Three Arrows Capital fell in love with Singapore Prison: Three meals plus fruit will give you the best sleep in your life)
existDuring the Hong Kong Web3 Carnival,Dongqu District is honored to invite Zhu Su, the founder of Three Arrows Capital, a major promoter of the last bull market, for an exclusive interview.Zhu Su shared with readers his life in prison and his views on the cryptocurrency market after being released from prison, and commented on SBF, the founder of FTX, and Do Kwon, the founder of Luna.
In the interview, Zhu Su not only talked about the impact of the Bitcoin halving market, the development of Layer 2 technology and the trend of the re-staking track, but also deeply analyzed the transformation from the decentralized algorithm stable currency USDe to the project OPNX he once assisted. It also introduced the latest developments of decentralized exchange OX.FUN to readers.
Further reading:The market value of USDe exceeded 1.57 billion Mg, ranking among the fifth largest stablecoins! Zhu Su: Exchanges may conspire against Ethena
Changes in mood after release from prison
Zhu Su, who was arrested at Singapore Changi Airport in late September last year and had been imprisoned for 4 months, appeared at the Hong Kong Web3 Carnival. Dongzhong first asked Zhu Su what his current state of mind was after experiencing many turmoils.
I think it’s not bad. In fact, I gained a lot of experience and I’m quite happy. I’ve seen both high and low (states).
The previous wave was mainly about investment and trading, and then I got to know many entrepreneurs through this process. Now this wave of entrepreneurship is more interesting, and currently it is mainly about the OX.FUN project.It’s what I’ve done the most.
It’s also more interesting to look at things from the perspective of creating projects. You can get to know some people, and you can also look at some investments, but this time I mainly want to build.
After Three Arrows Capital declared bankruptcy, Zhu Su became the “big bad guy” in the eyes of many people. Media reports portrayed him traveling the world and living a lavish lifestyle after the incident, which was very different from the image of a criminal. Although Zhu Su later publicly talked about this past, the public focus seemed to be blurred by the judicial progress of SBF and Do Kwon. He shared with us his change of heart in the past two years.
Three Arrows Capital started in 2012, and I did it for a total of ten years, starting with foreign exchange.Totally a currency circleafter the three arrows stopped, I took a rest for a while. I haven’t had such a good rest for a long time, and actually after the rest, I still want to do things in the currency circle again.I still believe itBitcoin, because the blockchain has given everyone a lot of new sunshine and direction.
Zhu Su was arrested at Singapore Changi Airport. According to a report by Bloomberg, the reason for the arrest was that he failed to comply with a court order, cooperate with the liquidation investigation and attempted to flee. Zhu su shared with us the actual situation at that time,
At that time, 3AC basically said,Without putting a liquidation document in the legal framework,Actually, going to jail for two months is fine, just to clarify things.After that process, some previous investors contacted them and said that they would have opportunities after being released from prison, so that they could cooperate and build together.
So I feel quite happy,Just finish all the previous things.
Further reading:News》Zhu Su was arrested in Singapore!He was jailed for 4 months for not cooperating with the liquidation of Sanjian Capital.
Real prison life in Singapore
In a podcast recorded with Kyle, Zhu Su once described prison life in Singapore as “a very pleasant experience”. The real prison experience in Singapore and other prisons and what a full day’s life is like also made the prison area very curious.
It’s better than I thought,Because it’s certainly not very comfortable,Because I have three arrows (ten years),Basically no timeVacation, rest,It feels like talking on the phone and using the computer non-stop every daylook at Tradingview or something, very compact.
But after you go to prison, you can’t access the Internet.No phone, no computer,This would make me feel a lot more relaxed.
I slept well in it,Just turn off the lights at half past nine.Turn on the lights at half past five in the morning,No caffeine or alcohol,You won’t have anything else to do,You will fall asleep naturally.
Although the bed is just the floor, it is hard and there is no quilt.But it’s still very comfortable,It feels less care-free,It’s like entering a “temple”, II probably spend the whole day reading, and I can go for a walk for an hour every day.Otherwise, I would just watch TV in the lobby or something like that, in prisonWhatever you need will be given to you.
Comments on Do know: He didn’t mean it
In early May 2022, the algorithmic stablecoin UST issued by Terra’s infrastructure Anchor was severely pegged to the U.S. dollar, triggering a death spiral in the cryptocurrency market. Just weeks after the collapse of UST, Three Arrows Capital was also severely affected by this. collapsed due to impact. As one of Luna’s largest investors, Zhu Su shared his views on this incident.
It can be said that Do Kwon’s project has grown and developed too fast, but it can also be said that the currency circle has invested funds and supported it very quickly because they also want to make this money.Sometimes this is the fluctuation of capital society. For example, at that time, if you didn’t follow what he did and he did it bigger and bigger, you would feel that you were at a disadvantage, right? ?
Yes, so I want to tell you that if we see some risks in the next wave, although we guess that the other party may not make any big moves yet,But when there is a possibility (possibility of collapse), you can first reduce your exposure.
He didn’t do anything on purpose, but everyone always supported him. He always felt that any problem could be solved. This was the biggest problem.
Players in the currency circle are killing each other
In January last year, Zhu Su https://twitter.com/zhusu/status/1610093549651136512 DCG once conspired with FTX to attack LUNA and stETH. Regarding this, we also asked him about the whole incident.Interpretation?would thinkyes Is Alameda teaming up with Wall Street guys to attack Three Arrows?
This part of Luna is for sure, even if it doesn’t explode now, it will explode later.
No one rescued Luna at that time because no one wanted or dared to save her.
But if you think deeply, it is everyone who made Luna become so big, so UST should be saved. If it falls to $0.15, someone should save it, but no one feels the need to save it, or dare not save it.
At that time, many people took the opportunity to attack 3AC. In fact, it was LFG (Luna Foudnation Guard) who bought a lot of Bitcoin at that time. We (3AC) also bought BTC and ETH, which means short sellers smelled that if we wanted to sell, the selling pressure would be Very big, I think this is the same as Ethena.
Although everyone says that Luna will definitely explode, if Bitcoin later rises to 100,000,Then Luna will not explode, so many things are right in hindsight, but you have seen many times that Tether is about to explode.But he didn’t explode either, so there is a lot of this logic in the currency circle.
Sanjian is the largest user of FTX. What I didn’t expect was that FTX & Alameda would be so ruthless…
I think they should be able to anticipate the end resultso many times, players in the currency circle do not have the concept of a “group”, and they cannot see each other when to unite and cooperate, and when to compete. For normal competition, for example, capital needs to lead investment projects or participate in Seed Round… Wait, this makes sense.
However, what happened next to Sanjian was that the big players in the market were fighting each other. Just like big birds, but big birds will not eat big birds of the same size. They will fight and they will not eat each other. FTX operation is equivalent to a big bird eating a big bird.
SBF doesn’t feel that he is wrong at all
After 3AC went bankrupt, Zhu Su and SBF blamed each other on After making a profit, SBF was sentenced to 25 years in prison at the end of last month. What does Zhu Su think of this news?
What he did very badly was that users put their money on the exchange, thinking it was theirs, andThe terms of service FTX also states that user funds cannot be misappropriated.SBF uses the money to buy food, drink, and even housing money from the users.
You have to at least tell others that these are high risks. People will not put all their funds on it, but only 20% or 30% at most. Then users may be able to accept that you have problems.
He actually doesn’t quite understand the fundamentals of the so-called Effected Altruism (altruism). This theory is that if you know more than others, then you are planning to use other people’s money however you want to use it, and then in the end When you have a lot of money, you can make the world and society a better place.He has been brainwashed by this theory since he was a child. Even on the day he was sentenced, he still didn’t understand it. He felt that he was not wrong because he knew better at that time and was just unlucky.
Bitcoin halving altcoin market
Starting from the middle half of the interview, DongZu began to have an in-depth understanding of the market trends with Zhu Su. We first asked Zhu Su how he views this wave.Bitcoin’s halving market, what does he think of the halving market?How should readers expect the effect of boosting altcoins?
There will definitely be an upward trend. This wave of Solana letting everyone play this kind of MemeCoin is in line withThe last wave is different, because the previous wave was mainly about NFT, Ethereum and these EVMs and Multiple EVMs.Although Solana has increased a lot, there are not that many projects on it.
On Solana Ecosystem,It’s mainly the kind of coins issued by SBF, and then it goes straight up and then goes down. This wave is actually the other way around.This is where the currency circle is different from traditional finance.Although Alemeda sold a lot of Solana, retail investors took over and then increased a lot. This is actuallyCycle, Solana’s MemeCoin, is quite awesome. in addition,The new Infra, it will always Outperform (outperform the market)
So there are many coins like Sui, Aptos, and Cosmos that are not bad. The theories of these halvings are similar to the previous wave, but the gameplay is different every time.
In terms of the Ethereum ecosystem, Zhu Su pointed out that Layer 2 solutions have become relatively common, especially with the rise of services such as “Roll up as a service”. Such technology is easy to generalize, resulting in relatively low differentiation. .
He believes that the main challenge of the L2 platform is the liquidity management of funds, that is, how to effectively move funds from one place to another, especially through liquidity bridges. Furthermore, he observed that this flow of funds is already starting to materialize in applications such as perpetual contracts (Perp) and decentralized exchanges (Dex).
Analysis of the ETH re-staking track
In the past, Three Arrows Capital was very optimistic about the re-pledge track and conducted a large number of arbitrage operations through Lido. With the emergence of various re-pledge protocols, Dongzhu discussed this with Zhu Su, founder of Three Arrows Capital, to understand what he thinks are the significant differences between the risk and reward structure of this track compared with native staking. Views and evaluations of these changes.
As for the Ethereum chain, I think if the re-staking ratio is too high, there will still be great risks in the consensus part.but so far so good, you can think of it as a Launchpool, allowing everyone to put ether in together, and then make profits together.
If we have done this for 3 to 9 months, it will be like POW. We have spent time and patience.Come and wait for this coin, the points or coins should be worth something, very similar to Launchpool.So I think the first wave is pretty good, because it’s relatively early, and those in the future will gain points.you still need someone to buy the coin in the end.
If you look back, it looks very much like Defi Summer. This kind of Pool 1 and Pool 2 game is equivalent toYou have two normal coins in pool one, and then you mine a new coin in the second pool. Then the APY of this new coin in pool one may be 50%, and the APY in pool two may be 10,000%, but you need to buy this Use new coins to mine the second one,The points are very similar to this now. I won’t tell you how much the mined items will be worth in the future.So you can dream by yourself, and then there is no way to short-sell the coin, and no one will smash the coin.
Some websites also think that OTC can be used to trade points. In fact, no one knows how many people want to buy at this price.For example, he asked for $500,000, and he said he wanted to buy my points for such a high price, but in fact no one came to sell them.So you see that the score of Blast is starting to fall now, that is, everyone is starting to think that in the end we mined that coin.No one is buying this thing.
Data Availability narrative in RestakingIt’s very fashionable now,
But we still can’t escape the DeFi model.
Looking at the development of stablecoins for USDe
After the Bitcoin halving, Zhu Su believes that the “stable currency market” will be the next big narrative in the crypto field. Currently, if investors hold USDT, it is difficult to get interest. If in Ethena’s model, by combining physical assets ( RWA) and diversified investment methods, transferring returns to the blockchain, increasing returns.
Zhu Su pointed out that Ethena’s strategy involves using funds to purchase Ethereum and short-selling contracts, and then returning interest to users. Although this approach is complicated, it can attract more investors to the stablecoin market. In addition to Ethena, other projects such as MakerDAO are also innovating in this field, promoting the expansion of the functionality and influence of stablecoins.
Further reading:Ethena integrates Binance, Bybit, OKX and Bitget exchange Web3 wallets!Lock USDe reward bonus, $ENA exceeds 1.5 mg
It is worth mentioning that Sanjian Capital has been hurt by a large amount of mortgaged UST in the past, but Zhu Su said in the Podcast that USDe will be used as collateral for OX.FUN, and believes that the market is right to remember the lesson of Luna, but Ethena The cycle of is still very early, and this passage has far-reaching significance…
Why is Zhu Su both optimistic about Ethena and convinced that there is a cycle? What is the difference between UST and USDe?
There is a big difference between UST and USDe. Stable coins like UST rely on Luna to maintain their value, which may lead to problems like Bank run situation, the most feared situationJust everyone suddenly running together.
The risks of the USDe stablecoin are similar to those faced by investors in Sanjian. For example, when investors use Bitcoin as collateral to lend U.S. dollars, they usually do not expect Bitcoin to fall significantly and therefore are not worried about the risk. However, if the price of Bitcoin suddenly drops sharply, they face losses because there will be a liquidation price for these loans.
For Ethena, although it uses short selling to protect itself from liquidation, it still relies on the cooperation of centralized exchanges. Under extreme market conditions, Ethena may be subject to an automatic deleveraging (ADL), where exchanges abruptly terminate its short selling contracts.
Zhu Su MemoriesIn 2018, especially during the BCH fork, the market experienced significant volatility, leading to a severe automatic deleveraging (ADL) event, which at the time Alameda and Amber suffer huge losses.
He said that at that time, the price of BCHABC plummeted from US$400 to US$200 in one day. Many investors bought spot and then hedged through contracts. However, suddenly exchanges such as OKX canceled all related contract trading pairs, resulting in traders even There may have been profits from short selling, but these profits were not actually realized, and the price later fell to $100.
Therefore, if Ethena repeats the same mistakes and happens on the more mainstream Ethereum, the impact will be more profound and may trigger wider market turmoil. In addition, if there are technical loopholes (such as Restaking bugs) and a large number of transactions are concentrated on centralized exchanges, the market may fall quickly and sharply. Regarding how to combat exchanges, Zhu Su’s views are:
It just depends on how Ethena wants to play.Because if Ethena wants to play with, say, stablecoins, andThere is no competitive relationship with the exchange.There’s no big risk in that.
However, if Ethena becomes big in the future,For example, Ethena said:If you don’t give me 50% of your exchange’s handling fee,I won’t do it for you,I did it for another exchange.itIt can indeed be doneRelatively awesome,But it dares to be so awesome,Others would dare to hit it like that.
Because you want now,ENA’s FDV is already US$12 billion,If he increases it by four times, it will already beIt’s the same as many exchanges.
Further reading:The market value of USDe exceeded 1.57 billion Mg, ranking among the fifth largest stablecoins! Zhu Su: Exchanges may conspire against Ethena
Strongly recommend OX.FUN platform
At the end of the interview, Dongzhu chatted with Zhu Su OPNX exchange follows OX.FUN future plans, he said that at the beginning The main reason for OPNX’s suspension of operations is not due to the regulations and restrictions of the Dubai government. These regulations only limit marketing activities in Dubai, and he himself is only serving as a consultant on this project.
In fact, OPNX mainly wants to develop a debt claims business similar to FTX, but FTX-related products and markets are no longer attractive. Zhu Su further explained that after he was released from prison this year, he discussed with investors how to adjust strategies because he believed that the market environment has changed and more creative and diverse methods are needed to attract users, so he is now committed to OX.FUN this project.
The biggest difference between OX.FUN isUse platform currency as your profit and loss on the platform,The advantage of this is thatHe is actually like Bitmex,But convert BTC to platform currency,So you can use this platform currency to buy and sell BTC vs.Contracts for other currencies,Then you can also use other coins, butYou are like borrowing OX,And then do it with it,So in this case,I can use a lot of MemecoinWhen Collateral.
Then I felt thisThis is the biggest feature of OX.Just use OX as the native token.Go trade all coins on Trade.
Looking further, the dynamic area asked Zhu Su Why did he choose to build a decentralized exchange in an era when centralized exchanges were already very saturated? He said that it was because after the collapse of FTX, there was a lack of perpetual contract decentralized exchanges in the market that could accept multiple cryptocurrencies as margins. (Perp Dex), primarily due to the risk of selling certain cryptocurrencies into U.S. dollars.
I think exchanging FTT or Solana for USD can be problematic during times of rapid market volatility, but if you want to exchange Memecoin for OX, it’s a relatively simple operation because the platform can buy back Memecoin. This means that converting USD to the platform currency can avoid problems when the market falls. However, if the value of OX rises, then as a user you will need to be careful to maintain enough OX or a modest margin lest your other cryptocurrencies be automatically converted into OX.
From a broader perspective, the platform is designed to ensure that there are always enough platform coins available to pay users, regardless of market conditions. If you make money on the platform, you will get platform coins. Likewise, if Market Maker loses money, these losses will be transferred to you in the form of platform coins, thus making you a profit.
If most customers make money, the supply of platform coins will increase, leading to inflation; if most customers lose money, platform coins will be recycled, leading to deflation. This mechanism provides investors with a unique dynamic environment to not only make profits but also manage potential market risks.
“One day in the currency circle lasts ten years in the world.” This saying may have become cliché, but in this exclusive interview, in addition to understanding the rapid changes in the cryptocurrency market from Zhu Su, Dongzhu also saw an OG in the currency circle’s views on Crypto With his enthusiasm and the direction he adheres to, he hopes to use this interview to encourage readers to find their own place in this field full of variables!
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