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Welcome to “Blockchain 100 Individuals.” This is a livestream program initiated by Binance Sq.. We hope to search out folks in the business who’ve really completed issues and pushed business improvement, and hearken to their tales. At the moment, we do not simply need to know what our visitor has completed — we need to know why they did it at the time.
At the moment’s visitor is Mr. Dashan. He began getting concerned with Bitcoin in 2011, and in 2013, throughout his PhD research, he constructed his personal mining rigs. In 2017, he resigned from HiSilicon (Huawei) to enter the business full-time and based Waterdrip Capital. Since then, he has invested in over 200 initiatives and managed a number of funds. In the previous two years, he has additionally served as Chairman of an AI firm, making use of the computing energy experience he gathered from early Bitcoin mining to AI information facilities.
From miner to VC to AI, what he continues to wager on is the foundational productiveness of the subsequent era of the digital world. At the moment, we need to focus on: Which selections have been proper, and the place did he step on landmines? How is the BTC Layer 2 ecosystem he closely invested in performing now? Is the crypto business nonetheless value staying in? Is AI a greater place to go? And if utilizing his personal cash, how would he view Bitcoin at this second?
From Discovering Bitcoin Whereas Finding out Overseas to Mining It Himself
Host Beca: You began mining Bitcoin in 2013. For many individuals coming into the business in the present day, that is already over a decade in the past. How did you first get into the house at the moment? How did you deal with the gear and electrical energy prices? And what occurred to the cash you mined early on?
Dashan: Throughout my PhD, I targeted on circuit simulation. A single simulation typically required ready ten, twenty, and even thirty minutes, leaving me with lots of idle time. I might browse varied web sites and magazines throughout these durations, which can be once I got here throughout Bitcoin.
I used to be finding out overseas at the time. For worldwide college students, a sensible ache level is learn how to switch cash from China to overseas with out relying totally on channels like Western Union. Again then, I believed Bitcoin was a wonderful cross-border cost automobile, so I began studying about it.
At the time, mining with an strange pc was already difficult, however the computer systems the college supplied to every pupil have been very highly effective as a result of we would have liked them for circuit simulation. I downloaded mining software program and did mine a bit of Bitcoin; nevertheless, it severely impacted my every day utilization, so I did not proceed. Later, I mined by means of pals in China by buying and internet hosting mining machines.
Really, I first noticed Bitcoin in 2012, treating it merely as a novelty with out doing a lot analysis. It wasn’t till late 2012 and early 2013, when Bitcoin began to rise, that I actually started shopping for. So the first batch of Bitcoin I held wasn’t totally mined — most of it was really bought.
Why Did You Resign from HiSilicon (Huawei) to Enter the Business Full-Time?
Host Beca: At the time, resigning out of your job at HiSilicon to go all-in on Bitcoin appeared virtually like “not having an actual job” to many. How did you make that call?
Dashan: This course of was fairly circuitous — it wasn’t a case of seeing Bitcoin as soon as and deciding to go all in.
I first encountered Bitcoin on-line, and later attended offline occasions, however sarcastically, I hesitated to actually enter the circle then. At the moment, I used to be in Montreal, Canada, and thought of Changpeng Zhao a half-alumnus. One night time, whereas wandering by means of the metropolis middle, I noticed a small store with dim lighting, flashing purple and inexperienced lights, and an indication studying “Bitcoin Embassy.”
I needed to go inside, however the doorman mentioned I wanted a “Passport” to enter — that means I needed to have a Bitcoin pockets. Whether or not it contained cash did not matter; the pockets itself was the ticket. I downloaded a pockets on the spot, transferred a bit of Bitcoin into it, and was then allowed in. The environment inside was very punk and wild — tattoos, nostril rings, stomach piercings — utterly totally different from my vibe. I took a glance and left.
Strictly talking, throughout my PhD, I wasn’t formally in the circle but — I used to be simply an fanatic. After graduating and returning to Shanghai, the business was nonetheless small, with some meetups already taking place, however the state of the folks in the circle did not appear very “respectable” to me at the time. So I nonetheless handled it as a distinct segment passion.
The actual determination to go full-time got here at the finish of 2016. Bitcoin had skilled one other rally, and I noticed that the Bitcoin I had mined and purchased in my early days had develop into fairly worthwhile, that means I would not have to rely totally on a job. Even so, I did not leap in suddenly; I steadily explored what I ought to do.
It wasn’t till the ICO craze in 2017, once I noticed Sequoia, IDG, and many gifted folks from Tsinghua and Peking College coming into the house, that I believed: if these individuals are coming in, then coming into this business may not be a mistaken transfer. That is once I really dedicated full-time. Earlier than that, I had been concerned in the business as an beginner for a number of years.
At the time, I hadn’t even disclosed to my household or my former social circle that I used to be working on blockchain. It wasn’t till national-level consideration on blockchain noticeably elevated that I formally “got here out.” So this wasn’t a legendary, impulsive determination, however moderately a course of of gradual understanding and affirmation.
How Was Waterdrip Capital Based? What Did You Make investments in Early On?
Host Beca: Waterdrip Capital was based in 2017. The place did the preliminary capital come from? What was the first funding?
Dashan: Earlier than Waterdrip was formally established in 2017, a number of companions had already made quite a few private investments, together with Ethereum, Cosmos, Polkadot, VeChain, and others. When Ethereum first got here to Shanghai for its roadshow, two of our companions purchased in when the worth was very low. The Chinese language identify “以太坊” (Yǐ Tài Fáng) was additionally decided by means of the efforts of one other companion, Most cancers, who participated in naming it and translating the whitepaper.
In 2017, with the ICO market heating up, a number of and even dozens of new initiatives emerged every day. We realized that relying solely on particular person efforts, we might not compete in this business, so we determined to type a staff. The preliminary funds got here from the companions pooling their very own cash, with everybody contributing the identical quantity and holding equal shares. Since I used to be the youngest at the time, everybody felt the younger man ought to do extra work, so that they made me CEO. That is how a really grassroots Token Fund was born.
In early 2018, Mars Finance held a blockchain convention in Chongqing and acknowledged the High 40 Token Funds, and we have been amongst them. At the moment, there was barely room to face on stage. In 2017, maybe two to 3 hundred comparable funds like ours emerged, however I estimate fewer than ten from that wave have survived to this present day.
As for the first official funding after the firm was based, I can not recall precisely who it went to. Since the companions already had a number of initiatives on hand earlier than Waterdrip was established, we’d typically add to positions or switch allocations into the fund, making it troublesome to pinpoint which mission obtained the first examine.
Nevertheless, I do keep in mind that solely three initiatives really delivered 100x returns upon full exit: Ethereum, Cosmos, and Polkadot. This does not embody Bitcoin, because it was a private funding moderately than a VC funding. There have been lots of initiatives with 10x+ returns, and many with paper positive factors of 100x and even 1,000x, however as soon as unlock schedules and precise exits have been full, 100x returns have been extraordinarily uncommon.
The place Do the Funds Invested in Partnership with CPIC Asset Administration Go?
Host Beca: The Pacific Waterdrip Fund, established in partnership with CPIC Asset Administration, has 4 sub-funds by 2025. What does every of them make investments in? Is Waterdrip’s capital nonetheless flowing into crypto, or has it shifted towards AI, US equities, and Pre-IPO alternatives?
Dashan: Our cooperation with CPIC started in 2022. From 2017 to 2021, Waterdrip was primarily based mostly in Shanghai. In 2021, as the regulatory surroundings tightened, partaking in crypto-related companies — together with funding — on the mainland confronted vital compliance restrictions. So we relocated the firm to Hong Kong and established the LPF compliance construction that was obtainable at the time.
Round late 2022, some Hong Kong firms, significantly these with state-owned enterprise backgrounds, might have anticipated earlier that Hong Kong would introduce new insurance policies supporting the crypto business. Mates from CPIC approached us, hoping to collaborate on coming into the business. Initially, I did not fairly imagine it: they’re a big establishment with SOE roots, whereas we’re a small, very grassroots staff. Why would they critically need to work with us? At our first assembly, I prompt an area dai pai dong (open-air meals stall), displaying up in flip-flops and shorts, whereas they arrived in fits with an entire entourage — fairly a scene.
Later, I noticed they have been genuinely severe. After attending Token2049, information broke that Hong Kong was signaling supportive insurance policies for the crypto business. I instantly flew to Hong Kong to advance the cooperation and signed a letter of intent that very same day. By 2023, the related funds have been steadily established.
There are 4 principal funds:
- One is an early-stage VC fund for initiatives, which has already been totally deployed, investing in roughly 40 initiatives;
- One is a secondary market fund targeted primarily on altcoins, which has already been liquidated;
- One is a pure Bitcoin fund, which has really been the greatest performer. It follows a macro-cycle technique: shopping for Bitcoin in bear markets and promoting in bull markets, with not more than two trades per 12 months;
- One other is an RWA fund, devoted particularly to RWA-related belongings.
We additionally tried a quantitative fund however stopped midway by means of. General, the digital asset funds in partnership with CPIC stay targeted on crypto and don’t make investments in different sectors.
Nevertheless, Waterdrip’s personal proprietary capital has certainly began taking note of alternatives past crypto over the previous two years. At the finish of 2024, we noticed that moreover Bitcoin, many altcoin sectors that relied on narratives with out actual implementation have been struggling to keep up liquidity. So we wrote a report titled “New Excessive-Grounds for Liquidity Past Crypto,” which centered on a dialogue of US equities.
At the time, we had many initiatives in our portfolio that hadn’t exited but, so we started advising them: if an organization has income and income, it does not need to insist on issuing a token — going public can be a viable possibility. As a local crypto establishment, we nonetheless imagine tokens provide many benefits, however that does not imply each mission should problem a token. In unregulated markets, when a founder points a token, they’re primarily tying their long-term repute to that coin. Issuing a token is not all the time the more sensible choice.
Ranging from late 2024, we started focusing on crypto-related shares and seized the subsequent DAT alternative. In the meantime, we pushed some of our portfolio firms to pivot towards AI. A minimum of two are progressing effectively, with one presently advancing towards a NASDAQ itemizing. These are all outcomes of our strategic positioning in 2024.
Why Did You Closely Make investments in BTC Layer 2 in 2024?
Host Beca: The BTC ecosystem was highly regarded in 2024, and Waterdrip was one of the most energetic establishments. Some additionally take into account you a significant driver behind that spherical of BTC Layer 2 momentum. What alternative did you see at the time?
Dashan: My views on X at the time have been very clear: I used to be very bullish on the Bitcoin ecosystem, however not a lot on inscriptions. Early inscriptions, like many Meme cash in the present day, lack real worth assist and rely primarily on hype and neighborhood. They are often performed with as a cultural phenomenon, however they should not be handled as severe investments.
Wanting again, I nonetheless stand by that judgment: the Bitcoin ecosystem has developed higher and higher, whereas not many inscriptions have survived. Bitcoin is the largest and most steady class of asset in the business, and its hole with different cash continues to widen. Whether or not it is Ethereum or some other coin, their worth efficiency relative to Bitcoin, most underperform Bitcoin over the long run. In each bull market, of course, a number of belongings will outperform, however repeatedly catching them isn’t straightforward.
For establishments, closely positioning in the Bitcoin ecosystem was additionally the proper alternative. Over the previous few years, many crypto VCs have struggled — many friends have develop into inactive and even disappeared. If Waterdrip had invested in the identical themes as everybody else, we’d have been in hazard too. It is exactly as a result of we closely positioned in the Bitcoin ecosystem that we achieved comparatively respectable returns.
In bear markets, altcoins usually carry out poorly, and not each mission in the BTC ecosystem performs effectively both. However when put next horizontally with narratives like Metaverse, NFT, ZK, and GameFi, the Bitcoin ecosystem has nonetheless been comparatively strong. Amongst the initiatives we invested in — River, Lorenzo, Particle, Merlin, Bsquare, and others — no less than a dozen are nonetheless creating effectively. They assist the NAV of our newest fund and permit us to ship outcomes to our LPs.
That mentioned, I do not imagine BTC Layer 2 itself is especially “nice” or irreplaceable. The context driving this path at the time was: Ethereum as soon as noticed a proliferation of extremely homogeneous Layer 2s, numbering maybe in the a whole bunch and even 1000’s, only a few of which survived. Bitcoin Layer 2, in complete, has solely a dozen to twenty-plus initiatives, and the survival price of initiatives inside that ecosystem is definitely comparatively greater. They nonetheless have to navigate by means of this bear market and, as Bitcoin’s market cap grows, discover capabilities which might be troublesome to attain in different ecosystems — together with Ethereum Layer 2 — to construct their very own moats.
“Actually Excessive-High quality Initiatives Ought to Skip Token Issuance and Go Public Instantly”
Host Beca: You as soon as mentioned, “Actually high-quality initiatives should not problem tokens; they need to go public straight.” This assertion went viral and was interpreted by some as throwing chilly water on the crypto business. Over a 12 months has handed — what number of initiatives have you ever efficiently persuaded?
Dashan: That assertion was incomplete on its personal. What I meant was: Actually high-quality initiatives have the choice to go public; if a mission can solely problem a token, it is probably not high-quality sufficient. However some initiatives can each go public and problem tokens — in that case, it relies upon on which market presents higher liquidity. When the crypto market has higher liquidity, they’ll problem tokens; when the inventory market has higher liquidity, they’ll go public. It is a company alternative.
If an organization has no room to decide on, then going by means of the regulated capital market is normally extra compliant and safer. However this does not imply the crypto business has no high-quality initiatives. BNB, Uniswap, and others are all high-quality, with income and enterprise capabilities that rival many listed firms. They may completely have each choices obtainable.
We’ve got certainly persuaded fairly a number of initiatives. In our portfolio, there are greater than 5 initiatives presently queued up for itemizing. In addition to the DAT-related firms, there are no less than 5 initiatives which might be genuinely going public based mostly on their precise enterprise.
Take Good Imaginative and prescient AI for example. It was initially a small firm that had thought of issuing a token. We noticed that it had actual income, so we suggested in opposition to forcing a token issuance throughout an altcoin bear market. As a substitute, we prompt investing extra capital, increasing the AI enterprise line, rising the income, and then pursuing the IPO path. Its income grew from $2-3 million in 2024 to roughly $7 million in 2025, and is predicted to succeed in round $70 million this 12 months. Underneath narratives like AI and computing infrastructure, going public turns into a extra rational alternative, whereas issuing a token would possibly introduce new regulatory points.
In fact, the regulatory panorama for token issuance and ICOs is dynamically evolving. The US can be discussing new ICO regulatory frameworks, the place totally different fundraising scales might correspond to totally different necessities. If such guidelines come into impact, ICOs or token issuance would possibly see new alternatives. Tokens are monetary devices that emerged later than shares — they don’t seem to be essentially inherently inferior; they may even be extra superior instruments. The secret is the prevailing market and regulatory surroundings at the time.
Does Steering Initiatives Towards IPOs Increase the Barrier to Entrepreneurship?
Host Beca: In any case, solely a minority of tech groups can really go public. Does your recommendation elevate the barrier to entrepreneurship? Goes public a lot more durable than issuing a token?
Dashan: You make a good level, however entrepreneurship should not have a low barrier to entry in the first place. In conventional industries, entrepreneurship is fraught with danger — 9 out of ten fail. If you happen to’re beginning a enterprise with your individual cash, you are shedding your individual financial savings or your mother and father’ cash. However when you elevate funds externally — particularly from unqualified buyers or neighborhood retail — you are harming extra households.
We lived by means of the ICO bubble of 2017-2018. Those that dared to do ICOs early on have been pioneers keen to take dangers, and most of their initiatives have been respectable — many are nonetheless alive in the present day, or no less than did not rug pull. However by late 2017 and early 2018, many realized they may elevate cash simply by telling a narrative, so that they began elevating funds and disappearing. This appeared to decrease the barrier to entrepreneurship, however in actuality, it attracted all types of dangerous actors, in the end driving out the good with the dangerous.
So, so long as
