Author: Colin Wu

In this episode of the Wu Says podcast, Colin Wu converses with Zhu Junwei, the founder of Xiayan Capital. Zhu Junwei transitioned from a young analyst from Malaysia to a senior executive at UBS, completing over 150 IPOs and more than 300 equity, equity-linked, and debt transactions, raising a total of over $250 billion for issuers. On September 18, Helius (NASDAQ: HSDT, soon to be renamed Solana Company) completed a private equity investment placement and will establish a SOL treasury, led by Xiayan Capital and Pantera Capital. Zhu Junwei will serve as the executive chairman of Helius's board, leading the company's strategic development direction in the next phase.

In this podcast, Zhu Junwei elaborates on how he transitioned from traditional sectors to Web3 and blockchain, and his personal involvement in creating a publicly listed company for the SOL treasury. Zhu Junwei advises young people to go all in on the Web3 wave as early as possible, unless they are in the AI and robotics industry.

The audio transcription was completed by GPT and may contain errors. Please listen to the complete podcast on Xiaoyuzhou, YT, and the author's views do not represent those of Wu Says. Readers are advised to strictly adhere to the laws and regulations of their location.

Zhu Junwei's Background and Career Experience

Colin: Welcome everyone to this episode of the Wu Says podcast. Recently, you may have seen some news about DAT, and Mr. Zhu and his founded Xiayan Capital have also been involved. Some friends in the crypto circle may not be very familiar with Xiayan Capital, but in the traditional industry, both Xiayan Capital and Mr. Zhu have a significant reputation and influence, so everyone is very interested in Mr. Zhu and his capital and strategy, especially regarding the recent involvement in the crypto space. Thank you, Mr. Zhu, for taking the time to communicate with everyone.

First, Mr. Zhu, could you briefly introduce your background? Some people in the crypto industry may not know you well. I found some information and discovered that your career is quite legendary. I heard you are a Malaysian Chinese, starting as a data analyst and gradually rising to the position of President of UBS Asia, participating in major IPO projects like PetroChina. Could you share your past experiences?

Zhu Junwei: Thank you, let me briefly introduce myself. I am a native of Malaysia and went to the United States at the age of 17. I initially studied mechanical engineering and then worked for a while in an American company before going to NYU for my MBA. I was fortunate to successfully interview for a position at Citigroup on Wall Street. I spent a few years at Citigroup, working on some major mergers and IPO projects. Later, I wanted to return to Asia and joined UBS around 2000. I was lucky to join UBS just as several major projects in Hong Kong were starting.

By the end of 2004 and early 2005, my boss finally agreed to let me take charge of the Chinese equity capital markets. I particularly remember that the Beijing office had only a few people at that time; I could count them on one hand.

At that time, China's budget was only $20 million. Starting from 2005, after completing the first H-share listing, our revenue in the equity capital markets reached $260 million in 2006, and in 2007 it exceeded $500 million, continuing to grow thereafter. Indeed, I caught the opportunity of the Chinese market's rise. Sometimes, we would do seven IPOs in a week.

When I was young, I thought these things were normal, but looking back now, it was truly a rare opportunity, and such chances are hard to come by again. The financial crisis in 2008 paused things for a bit, but the market started to recover in the second half of 2008 and continued until 2011 or 2012 before slowing down. After that, companies from various industries in China began to gradually internationalize. Starting in 2014, we began a large number of overseas acquisition projects, helping companies like Wanda, Fuxing, and HNA with global acquisitions. There were many large projects at that time. In 2017, I resigned from UBS, and when I left, I counted that I had worked on over 400 projects, more than 150 of which were IPOs, and over 300 equity-related financing projects, totaling over $250 billion, helping many companies in China and the Asia-Pacific region.

Indeed, I was fortunate to be in a very good position at that time, and the experiences I had in investment banking are vastly different from today's situation. Later, I decided to start my own business. To be honest, I witnessed the rise of the internet bubble in the 1990s in the U.S., with a major bubble from 1998 to 2000, and after the market bottomed out in 2003, the internet began to see new development.

I have witnessed many industry changes, from inception to prosperity, and then to global capital's pursuit. In the early days, many internet companies in the early 2000s couldn't even find banks willing to open accounts for them; no one wanted to do business with them. Many companies were just burning money, with no revenue, only users and data.

This is also why banks like Silicon Valley Bank emerged, specifically serving this new industry.

Similarly, having seen these processes, I have many reflections, and I have benefited greatly from them, learned a lot, and helped many people, making many friends. But the only regret is that I did not participate more deeply; I only provided services to these companies from an investment banking perspective. Looking back, I feel I missed many opportunities.

So, after deciding to start my own business in 2017, I had an idea in mind: to start with investment learning, with the ultimate goal of fully committing to a company and growing it. I believe the transition from investment banking to corporate management is a significant leap. In investment banking, we pursue how to minimize risks and raise funds, while in corporate investment, we need to consider how to take on risks, when to take risks, and when not to. The thinking patterns of the two are completely different.

When investing, it is important to look forward and move towards the goal. For me, investing is not just about minimizing risks but also about taking responsibility in the process of corporate development, reaching the destination of corporate growth. Therefore, investing is a good transition from investment banking to corporate management.

Thus, I decided to start raising funds for investment in 2017, and we began investing in the blockchain field in 2017 and 2018. We were one of the earliest licensed fund companies in Asia to enter this field. Initially, we were quite conservative, not investing in tokens, ICOs, Memecoins, and NFTs, but instead choosing to invest in some infrastructure and equity of substantial companies.

By 2021, we became more certain about the sustainability of blockchain development, believing that this sector, both in terms of scale and technology, could not be eliminated and would continue to thrive. So, after 2021, we truly began to increase our investment efforts and made significant bets, closely following the development of this field. I personally also invested a lot of time alongside my partners.

Currently, the members of the blockchain team are very knowledgeable and active partners in the crypto space; they are actually my teachers.

Now, I have basically handed over the investment management of other fund companies to the team and focused on the blockchain field.

Blockchain as an Iteration of the Internet and Gradual Industry Recognition

Colin: I find your experience quite distinctive. Why did you transition from working in the traditional IPO field to the blockchain sector? It seems that you are now fully immersed in Web3 enterprises. Is this change due to your deepening recognition of the blockchain industry, or are there other reasons?

Zhu Junwei: I believe blockchain is an iteration of the internet. You can see that the attitudes towards blockchain companies and technology development in recent years, especially people's views on it, are similar to the situations faced by early internet companies.

In the past, many people held prejudices against internet companies and did not understand their true value. Blockchain is similar; even two or three years ago, when people mentioned cryptocurrencies, many thought they were tools for crime and money laundering. This was the simplest view, and even now, I believe that more than half of the world's population still holds this view, and they do not understand what practical benefits blockchain technology can bring us.

Until about a few months ago, I felt that people at least began to understand the benefits that stablecoins can bring. The emergence of stablecoins has also drawn attention to this field. As blockchain technology matures, it has received increasing attention, especially from publicly listed companies and the market. Over time, I have found that the whole world, including Wall Street, is intensifying its study of blockchain and beginning to realize that its development is unstoppable.

I think this year can be called the inaugural year for blockchain policy and legislation, as well as the first year that the public truly began to accept this new technology. Now, people's understanding of cryptocurrencies is becoming more open, no longer viewing them with the same discriminatory lens as before.

Investing in Blockchain and the Transformation of Traditional Financial Institutions

Colin: I noticed that your capital has also invested in some relatively large companies. You just mentioned investments in Swiss digital banks and larger groups like Bitmain and Animoca. What are your views on these investments? How have their returns been?

Zhu Junwei: These investments are very important to me because if I hadn't invested in these companies and learned about them, I probably wouldn't have made the decision to do more investments. These investments are part of my learning process; each investment is an important learning milestone for me. From 2017 to 2018, we invested in Bitmain, and at that time, we began to truly understand the Bitcoin mining process and how this industry operates. This is just part of it; later we began to focus on the financial services sector, especially exchanges.

We believed that blockchain would definitely play a huge role in the financial sector. The global financial assets are about $500 trillion, and this area is still very backward in terms of reform. Many systems in banks, investment banks, and exchanges have existed for two or three decades without significant innovation or reform. There are two reasons for this: first, people feel that these outdated systems are fine, and second, various stakeholders do not want to change the status quo.

When I was making investments, I saw many areas within the banking system that urgently needed improvement. Blockchain technology can quickly address these issues and bring new possibilities. Especially in 2017 and 2018, I realized the excessive regulation in the financial industry, particularly after the 2008 financial crisis, when global financial institutions faced very strict regulations that almost limited the development of many financial institutions. Many banks and securities firms have lost certain services they used to provide, and customer needs have not been well met because the primary task of banks is to protect their own interests.

What I observed is that blockchain can provide solutions for these financial institutions. It can not only provide real-name information but, more importantly, it can change the way asset ownership is managed. Currently, the global financial system faces many risks, such as assets being confiscated or lost due to extreme situations. Blockchain can ensure asset ownership, allowing users to maintain complete control over their assets at any time.

At that time, I also believed that many inefficiencies in the traditional financial industry could be improved through blockchain. Therefore, we began investing and established Amina Bank, a Swiss licensed and compliant bank, even though some friends in the crypto space thought traditional banks were no longer needed and believed they could handle everything with just a wallet. In fact, we have experienced multiple cycles in the crypto space and witnessed the rise and maturation of the industry. Just like in the internet era, some inevitable regulatory issues always exist. Now it has been proven that banks are very important for the continued development of the crypto space.

In the past two or three years, even five years ago, there was opposition to regulation, but now more and more people are willing to accept it. With these changes, banks have become one of the most important bridges for blockchain to connect a large amount of traditional world capital. Amina Bank is now operating smoothly, with rapid asset growth and very good operational performance.

Looking back at several past investment projects, I feel that each has its own characteristics. These investments are not solely my personal achievements; they are more the result of the team's efforts, as these projects were all found by the team. I only review and make investment decisions. For me, each project is a learning opportunity, which gives me confidence to invest my time, energy, and funds in this field in the future.

The Establishment of the DAT Project and Investment Model

Colin: Mr. Zhu, could you tell us more about your new venture, Helius—a treasury company based on Solana? I understand that you are one of the key leaders of this project, along with Li Lin's family office. Can you tell us when you started discussing and launching this project? What was the whole process like?

Zhu Junwei: To be honest, the concept of DAT was officially proposed around May. Before that, people didn’t refer to it as DAT. At that time, the idea was still to create a financial advisory company, and people might have only thought of companies like MicroStrategy. It wasn't until around April and May that some pure companies began to emerge, focusing solely on storing Bitcoin. Previously, some companies would hoard Bitcoin, and some treated Bitcoin as part of their ancillary business, but these were quite mixed. The truly focused DAT companies only began to rise around April and May of this year.

The earliest pure DAT in Asia was likely led by the BTC Magazine team, which established DAT companies early on in Hong Kong, Japan, and the United States. To be frank, I initially didn’t understand it and wasn’t interested, thinking it was just a matter of a listed company buying Bitcoin. It wasn’t until May and June that I began to delve deeper into some DAT companies that had emerged in the U.S. After hearing their investment proposals during project reviews, I gradually realized that DAT actually provides a better way for large funds on Wall Street and retail investors in the global market to gain exposure to cryptocurrency investments.

Many times, you might ask, why not just buy Bitcoin directly? In fact, if you buy Bitcoin directly, its price fluctuations are directly linked. You could also choose to invest in ETFs, using leverage to amplify returns, which are also good options. But DAT has a unique advantage; it not only allows investors to gain exposure to Bitcoin purchases but also acquires cheap capital through a more flexible model, capturing market windows, operating efficiently, and providing higher returns and more convenient investment products for investors.

I later came to understand the core advantages of DAT deeply, and I believe it is more attractive than directly buying Bitcoin or investing in ETFs. First, the design of DAT products allows them to provide investment opportunities for more large funds, truly driving the underlying coins' price up and increasing liquidity. The most abundant capital globally is in the large funds on Wall Street. Quite a few funds are already at the trillion-dollar level, with countless fund managers underneath. For these fund managers, they do not want to manage wallets themselves and do not wish to bear the operational and security risks involved in buying Bitcoin and trading. DAT provides a simpler and safer way for them to access the cryptocurrency market while avoiding these risks.

I have close ties with several major virtual currency funds on Wall Street, and after in-depth research, we decided that the best way was to first invest through a small company to purchase cryptocurrencies, and then, once the stock appreciates, to start raising funds to continue buying cryptocurrencies, forming a virtuous cycle of capital. This process is very efficient for the company and maximizes returns for investors. It took me about a month to fully understand the entire model. As for why we chose Solana, after I finished the board meeting of Amina Bank in Switzerland in June, I met with senior executives of the Solana Foundation to discuss the rise of DAT companies and attempted to persuade them to formally support the Solana DAT project. I believe this is a very good tool to help promote the Solana ecosystem to the world, clarify the story, and provide the best investment channel for Wall Street investors.

At that time, their thinking was somewhat neutral, believing they should not support either side. However, I thought that if they did not support these projects, once these projects performed poorly, the Solana brand would also be adversely affected. So, I continued to push this matter, and ultimately reached a consensus in mid to late July.

In fact, I had also discussed with the team early on whether we should consider starting with Ethereum. At that time, Ethereum was less recognized on Wall Street compared to Bitcoin, and its price had not shown much momentum. But just a few days after I raised this idea, the market saw the emergence of Joseph Lubin's Sharplink, and after the project announcement, the stock price surged, clearly indicating that we had missed that opportunity.

I remember after I arrived in the U.S., I saw that Tom Lee's BMNR also announced, and the stock price experienced explosive growth, raising tens of billions of dollars at that time, with related stocks skyrocketing. In those two months, many cryptocurrency funds made a lot of money. SoftBank and Tether also launched the largest Bitcoin SPAC at that time, and once the announcement was made, the SPAC price immediately tripled. During that period, the global stock market's understanding of cryptocurrencies reached a new height.

I realized that Wall Street capital actually wants to enter the cryptocurrency market through efficient means; they just don’t know how to operate and urgently need an effective channel. As I mentioned earlier, directly buying Bitcoin or investing through ETFs is not convenient; the DAT approach is more efficient, especially when the company has liquidity and the stock price performs well, allowing for the accumulation of more crypto assets at a lower cost, which is more efficient than purchasing directly with cash.

After that, we began to focus on Solana. I have always believed that although Solana was affected by various issues with FTX, it remains one of the most efficient, profitable, and cost-effective technologies among all blockchain platforms. Its high-tech attributes make me believe that Solana is the most worthy L1 cryptocurrency to invest in. So, we approached Pantera, the largest pure cryptocurrency fund company in the U.S., to start promoting the Solana project. Pantera is very optimistic about Solana, which has already become their largest position, but they also want to quickly increase their investment. Ultimately, the Solana Foundation agreed to our joint proposal.

July 25 was our first meeting regarding the Solana DAT plan, and around August 10, we confirmed the joint launch with the foundation and successfully completed the issuance on September 15. This process was very rapid; the entire issuance took only a month from initiation to announcement, making it the fastest among all DAT projects. Throughout this process, I learned a lot, especially in designing the project's scale, structure, and strategy. We noted that the scale of DAT should not be too large, as it would affect the returns of the first batch of investors and the market's liquidity. We balanced scale and investment goals to ensure the project could grow steadily while maintaining flexibility. The project's issuance was very successful, and I am currently managing the company as the executive chairman. As the company develops in the future, new board and management members will join to participate in the company's operations.

Views on the Future of Successful Blockchain Enterprises and Competitive Landscape

Colin: Although DAT is very popular at this stage, historically, it seems that successful enterprises are only companies like MicroStrategy. What do you think about the future? Will there be more similar successful enterprises? Is it possible to replicate MicroStrategy's model? Additionally, many people believe that in certain cryptocurrency fields, there may ultimately only be one winner, such as the largest cryptocurrency becoming the dominant presence throughout the cycle. What are your thoughts on these issues?

Zhu Junwei: For the first question, I see it this way: the current stage is somewhat like the early 2000s when foreign investors began investing in the Chinese market. At that time, investors had just arrived in China, facing Chinese enterprises like China Mobile, China Telecom, and PetroChina, where information was not fully transparent, and government policies and regulations were not clearly defined. At that time, investors didn’t know what to invest in, and much information was incomplete. If you said PetroChina was the best company in China with no rivals, that judgment would likely be incorrect.

Now, blockchain is also in a similar stage. When people first heard about crypto and blockchain, they started by buying some Bitcoin to see what it was. After a while, they began to understand what Bitcoin is, and then they moved on to understand Ethereum, Solana, and others. We are now in an exploratory phase, and as technology and the market gradually mature, I believe there will not be just one successful enterprise. Bitcoin and Ethereum represent different values. Bitcoin is like digital gold, representing stored value, and its value is more about long-term investment. Ethereum, on the other hand, represents a vast ecosystem where people can build their own applications and ecosystems.

In the future, more capital will enter this field, seeking various ways and targets to participate. There will be a continuous stream of large blockchain projects representing different market demands and industry applications for investors to choose from. Therefore, I do not believe there will be only one winner in the future. Multiple successful projects will emerge in the blockchain space, which is a natural differentiation process.

Additionally, while MicroStrategy is the most well-known enterprise, it will not be the only representative. Globally, financial centers like the U.S., China, Singapore, Switzerland, and the U.K. have their own characteristics. Investors in different regions will be more inclined to invest in markets, projects, and management teams they trust. So, I believe that in the future, there will not only be MicroStrategy as a successful Bitcoin DAT company, but also other successful Bitcoin DAT companies.

As for Bitcoin, while it is currently the most representative cryptocurrency, I believe that in the future, more large cryptocurrencies and tokens will emerge, and even some large companies may issue their own tokens to participate in the crypto economy. Therefore, the number of DATs will continue to increase, and the world of blockchain is just beginning.

Many people ask if this means that blockchain is over. I believe this is just the beginning.

Views on Future Token Investments and Current Company Focus

Colin: Will you and your capital participate in other token DAT projects in the future, or will you focus on the current company and do well in the existing business?

Zhu Junwei: I am currently the executive chairman, and I will definitely put in my utmost effort to make the Solana DAT project successful. After all, this is a highly competitive field, and there are several companies of similar scale around us. We believe our advantage lies in the transformation from a traditional financial background, especially since many professionals from Wall Street are on our team. Our partner Pantera also has a strong background; their founder and owner came from Tiger Global and started investing in cryptocurrencies in 2013, with their first Bitcoin fund purchasing Bitcoin at an average price of $65.

Having worked on Wall Street for many years, we believe we are more capable than other companies in communicating with the market, maintaining a high premium, and utilizing this premium to finance through various tools in the market, thereby earning the maximum return for shareholders at the lowest cost.

In the long run, as long as we can maintain this ability to acquire funds at a low cost and operate efficiently, we should become a leader in the industry, becoming the "MicroStrategy" of this sector.

As for investments in other tokens, we will not completely rule them out. We feel that the current focus is to do well with the Solana project, which is already a significant undertaking, and we will concentrate on making it bigger and stronger in the coming years.

Competitive Advantages of the Solana DAT Project

Colin: So, could you elaborate on how you think your Solana DAT differs from other companies in the competition? There are quite a few Solana DATs competing in the market now; what characteristics or advantages do you believe you have compared to them?

Zhu Junwei: In fact, in the Solana DAT project, our premium is relatively the highest. This also proves that our cost of financing through stock is the lowest. Currently, our performance has also been recognized by the market. There are many key factors in our structural design that people may not have noticed. First, the scale we designed is already very mature. Secondly, during the issuance process, despite unfavorable market conditions, we still successfully oversubscribed and achieved our goals.

Most of our investors are institutional investors, especially many traditional Wall Street funds supporting us. The support from traditional funds is very important to us because their backing for the later market and long-term capital investment is more secure than that of some virtual currency funds. Therefore, the quality of investors in our issuance structure is very high.

During the issuance process, you may not have noticed that from day one, we promoted through major media. Our news started spreading among investors and fund managers across the U.S. during the 8 PM slot on CNBC. This made our trading very smooth on the first day. In the following days, major media channels like Bloomberg also began reporting on us, clearly pointing out our differences from other competitors.

This also garnered significant attention from major Wall Street media. From day one, we received important exposure from these media, indicating that our project has gained widespread recognition. Therefore, we believe that in the future, Wall Street media and global media will continue to support us.

From the perspective of stock trading liquidity and premium, we are confident that this advantage can be sustained. At the same time, we have some strategic plans and initiatives, but it is not convenient to disclose those details at the moment. However, it is certain that in the future, we will demonstrate more advantages and competitiveness, and everyone will see the specific measures we are taking.

Thoughts on RWA and Blockchain

Colin: I noticed that you have been very focused on RWA (Real World Assets) in the past few years, especially as it has recently become very popular in Hong Kong and mainland China. Do you have any new thoughts or changes regarding RWA now? If investors want to participate, do you think there are suitable opportunities now?

Zhu Junwei: I believe the relationship between DAT and RWA is mutual. DAT provides a channel for traditional Wall Street investors to enter the cryptocurrency field, while RWA provides a channel for cryptocurrency investors to enter the traditional financial world. Through RWA, we can transform some important assets from the traditional world into tradable digital currencies, and the potential and imagination in this area are vast.

I have always believed that the RWA field has enormous potential, which is also something I often feel regretful about. In the blockchain and cryptocurrency field, most of the leaders are quite young; they move quickly, know a lot, and have ample resources. Meanwhile, we older individuals, despite having some experience, have been a bit slow in this area.

However, I think the RWA field is still a place where we "old folks" can play a role. RWA involves physical assets from the traditional world, which are closely related to laws, regulations, and custody—areas where we with traditional financial experience excel. While the technical aspects, especially the integration with data centers, electricity, and the internet, are strengths of blockchain, we can also contribute our experience and strength in this field while learning and growing from it.

Zhu Junwei's Advice to Young Entrepreneurs

Colin: Finally, I would like to ask you a question. You have experienced starting from the grassroots level, worked hard in traditional industries, joined the cryptocurrency industry, and now you bear an important corporate responsibility. Do you have any advice for today's young people or young entrepreneurs based on your life experience?

Zhu Junwei: For me, my advice to young people is that if you are not currently involved in AI, automation, robotics, or some high-tech industries, then you should consider going all in on the blockchain field. The development of blockchain is very rapid now, and it is an important direction for the future. I saw many opportunities at that time, but due to a lack of decisiveness, I missed many chances. Therefore, I think young people today should take that step sooner rather than hesitate.

Colin: Thank you very much, Mr. Zhu, for taking the time to share with us. We look forward to more new developments from your company in the future and hope to communicate with everyone again. Thank you, Mr. Zhu.

Zhu Junwei: Thank you all, and I wish everyone all the best.

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