After "graduating" from Ant, they flock to Web3

The two technology revolutions that are highly anticipated in the tech industry 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 are almost heavyweight news 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. In contrast, the funding in the AI sector reached $25 billion in the first half of the year. One of the largest crypto venture capital firms, Paradigm, is undergoing a paradigm shift, stating that it will no longer focus solely on cryptocurrency and the Web3 field, but will begin to expand its focus to include 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 admitted 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 people also choose to enter the market at this moment.

"When I communicate with colleagues at Ant, I often draw comparisons between AI and Web3, as their development trajectories are quite similar." Jerry Li likened it, stating that over the past sixty years, there have been three waves of artificial intelligence, each with investments ranging from billions to tens of billions, with peaks and troughs occurring continuously, until OpenAI emerged. "This new wave of technological revolution requires going through one cycle after another to truly achieve leapfrog development."

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

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

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

Of course, compared to AI that 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 introduced in 2008 through Satoshi Nakamoto's "Bitcoin White Paper," which was only 15 years ago.

Rebellious and unstable, the growing pains that Web3 is experiencing make the "parents" shake their heads in disapproval. After the collapse of FTX, which had a market value of $32 billion last November, regulators around the world began to impose restrictions on this "naughty child."

At this juncture, at 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 asked about the reason, Jerry quoted a famous saying from Ant: "Because we believe, we see."

The Artela team has chosen the public chain track, which is part of the infrastructure of Web3, also known as the "highway" of Web3. Only with roads can everything be transported.

In the public chain arena, there are established Web3 pioneer projects like Ethereum, which has already built its own moat through the "network effect" of its ecosystem, and there are also several all-star projects that come with golden keys.

Now choosing a relatively crowded track, "WSJ." talks with Jerry about his views on the "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 long way to go." Recently, Jerry has been meeting around the world, which is the first step for him to adapt to his new identity. After running a circle, he gained a lot. "Actually, after communicating with many projects, our confidence has been strengthened."

The biggest difference between Artela and other chains is not in the current "involution" of Scalability, but in Extensibility, 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 also be described as the "iPhone moment for the industry" and the "last mile." However, the core issue is very clear: how can we enable ordinary people to use Web3?

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

Of course, it is full of experience. Artela's CTO Qiu Honglin (alias: CP) once provided underlying architecture support for Ant Group's digital collectibles platform Whale Exploration. He stated that Whale Exploration had already achieved over 100 million daily active users through the New Year’s "Collecting the Five Blessings" event. "At that time, we 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, having 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's hair is slightly curly, and when he speaks, there's a hint of a Cantonese accent. His tone seems to be half-smiling, making it feel like a casual chat, but upon closer listening, the content he expresses is very professional and detailed. AntChain holds the highest number of patents globally, and CP alone holds hundreds of blockchain patents.

Regarding Extensibility, CP gives an example: "In games, besides the player input 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 background tasks because all execution in blockchain must go through user interaction."

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 operates automatically.

For blockchain, which is currently somewhat challenging for playing 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 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 "abstract" summarizes the features of Artela: "Simply put, if we compare the EVM to the CPU of the blockchain, we have added a GPU to the blockchain." More simply, large-scale games can be played on the blockchain in the future.

"In the era of internet finance, products like Jiebei and Huabei are innovations that have transitioned from 0 to 1. We have all experienced the process of evolving from a vague concept into a concrete commercial product, and we understand the complexity behind it." CP believes that taking the same path again in the era of public chains presents many challenges, but fortunately, there is experience to draw from.

Most of the team members at Artela come from Ant Group. "A cohesive team of more than a dozen people has progress similar to that of a team of over twenty people." Established for only a few months, Artela has raised $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 went live in September, adopting a targeted invitation system for its current ecosystem partners. Defi and Fully On-chain Games may both be potential focal points for the future. CP mentioned that Artela does not intend to engage in the typical airdrops and routine combinations associated with public chains, but rather aims to explore innovation with ecosystem applications. They will focus on development in the coming months and plan to officially launch the public test around December.

It can consistently achieve hundreds of millions of daily active users. Without a doubt, Ant Chain has already reached the ceiling in certain areas of Web3. However, their activity seems to be somewhat isolated from Web3.

Just as the decentralized nature of Web3 brings about "open source" rather than "patents". Compared to the mainstream public chains in foreign technology, there is also some "disparity" with the non-token blockchain more suitable for the domestic context, also known as consortium chains. Ant Chain aims to pave a different path for Web3 in China, focusing on open consortium chains and industrial Web3.

As early as 2017, Ant had already believed in the future of blockchain. At that time, the industry had not yet taken shape, but Ant had regarded blockchain as a core strategic initiative. "Back then, Ant said it would focus its investment, but in fact, 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 great potential, especially in the context of globalization, with financial applications; I think it is particularly valuable."

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

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 continued to rise. Ant Chain was gaining momentum, with cross-border remittances, supply chain finance, electronic invoices, judicial evidence... In a moment, applications based on the industrial end were fully launched 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 salaries home without having to wait for several days or pay relatively high cross-border fees. Inclusive finance, Ant Group had already achieved successful case solutions early on.

CP also became a popular engineer for the company. 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 on his dating resume that he is an 'engineer', a code-writing techie, but no one clicked on his resume and the girls were not interested in him. Later, he changed his resume 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 the company's executives stated that the decision "is no less than the decision to establish Alipay."

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

Taking cross-border remittances as an example, an Ant Group executive told the WSJ that there are no technical barriers to cross-border remittances, but the level of support for this technology varies by country in terms of policies and regulations, making such projects more customized. "At that time, we were collaborating with a certain bank, which was already our long-term partner."

Even during the Spring Festival, the popular Whale Exploration, with daily active users exceeding one hundred million, faces the problem of unsold collectibles and difficulty in breaking through its niche. The digital collectibles previously launched by Whale Exploration are mostly cultural and artistic, making it hard for young people to find them trendy. "But my dad really likes it; it's the only product I've worked on that he has consistently used." The work content of CP is closely watched by family members, and Whale Exploration might be the most easily understood product among them.

"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 a representation of value. 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 cannot talk about rights and incentives. "The consortium chain only takes on data-level responsibilities; to truly reconstruct production relations,