- Yubo Ruan is the founding father of Parallel Finance, a decentralized lending and staking protocol.
- Through his VC fund, the 25-year-old invested early into high altcoins similar to solana and polkadot.
- He shares how to determine profitable protocols and the way he plans to carry DeFi to a billion individuals.
At 25 years previous, Yubo Ruan has in all probability achieved greater than his friends may think about.
In highschool, Ruan began his first firm Alisimba Technologies in Beijing, China whereas profitable 13 invention awards and 5 patents. In school, he arrange his first enterprise capital fund Skylight Investment to spend money on disruptive applied sciences. In 2017, he launched his second VC fund 8 Decimal Capital to concentrate on blockchain and crypto corporations.
Now, the serial entrepreneur is attempting to accomplish his loftiest objective but — to carry decentralized finance to a billion individuals by way of his lending startup Parallel Finance.
Built on the polkadot ecosystem, Parallel Finance is backed by distinguished VC traders together with Sequoia Capital, billionaire Peter Thiel’s Founders Fund, Polychain Capital, Pantera Capital, Lightspeed Ventures, and extra. The startup was valued at $150 million after elevating $22 million in a Series A funding spherical in August.
Ruan discovered about crypto in early 2014. While engaged on his first firm within the well-known Garage Café in Beijing, which used to settle for bitcoin as fee, he met a bunch of bitcoin and ethereum miners who would later grow to be a few of the largest crypto gamers in China.
That expertise taught him the significance of being early. In 2019, whereas operating the $60 million VC fund at 8 Decimal Capital, he made a six-figure funding in solana (SOL) at round 30 to 33 cents and poured over $1 million into polkadot (DOT) at under $1, in accordance to Ruan.
The early bets have paid off handsomely. As of noon Friday, solana, the fifth-largest cryptocurrency by
, was buying and selling at round $148, whereas polkadot, the Tenth-largest token, was altering arms at $27, in accordance to CoinGecko pricing.
How to determine profitable crypto initiatives early
When attempting to determine initiatives with long-term potential, he focuses on three components: (1) community results, (2) affordable as an alternative of low cost valuation, and (3) the standard of the founder.
A reasonably acquainted idea in tech and crypto, a community impact refers to the concept that the higher the variety of customers who be part of a community, the extra worth it accrues. Social media platforms together with Facebook, Instagram, and TikTookay illustrate the facility of community results, whereas main cryptocurrencies similar to bitcoin and ethereum have additionally grow to be extra invaluable as extra individuals be part of the networks.
Contrary to standard knowledge, Ruan likes to spend money on initiatives with valuations that may appear costly. Rather than specializing in low cost property, he believes that larger, although not unreasonable, valuations may sign that the initiatives have gained higher consensus and extra investor belief.
“When we invested in solana, regardless that it was like 33 cents, it was at a pair hundred million greenback valuation,” he recalled. “It was fairly insane at that point as a result of it is fairly costly for a community that had by no means launched something.”
It was an analogous story with polkadot, which he invested at under $1 however with an over $1 billion valuation, Ruan mentioned.
The valuations additionally made sense to him due to the monitor report of the founders. Polkadot’s founder Gavin Wood additionally co-launched ethereum the place nearly all of the DeFi and NFT actions happen at present.
“I put at least 40% of the burden in the direction of evaluating who’s the founder and what they’ve accomplished earlier than,” he added. “We really assume that the entrepreneurs who’ve accomplished nice creation earlier than would probably proceed to create higher merchandise in the long run.”
Right now, Ruan likes StarkWare, an ethereum layer-two scaling community. The Israel-based firm just lately achieved a $2 billion valuation after elevating $50 million in a funding spherical led by Sequoia Capital. To make certain, Parallel Finance is constructing on high of one among StarkWare’s merchandise StarkNet.
Building the ‘Apple of finance’
These days, Ruan is now not actively investing in crypto initiatives. With the objective of bringing DeFi to a billion individuals, he’s 100% targeted on constructing Parallel Finance into the “Apple or Google of Finance.”
The younger founder has lots to show although.
DeFi, which refers to monetary companies actions automated by software program, is notoriously troublesome and sophisticated to navigate. Meanwhile, scams and frauds have mushroomed as merchants flock to high-yielding DeFi methods like yield farming. According to a Chainalysis report, traders lost $2.8 billion to DeFi rug pulls in 2021.
With about $700 million in complete worth locked, Parallel Finance has a distinct segment market dominance as the most important third-party program on polkadot, in accordance to DeFi Llama.
To develop its 100,000 world customers to a billion, Ruan mentioned he plans to construct a one-stop ecosystem the place customers can conduct all types of economic companies actions associated to their DOT token holdings, whether or not it is crowd loans, buying and selling, staking, or minting stablecoins.
The firm may also construct a permissioned app retailer to root out frauds and scams.
“We will choose what sort of purposes can run on our chain in order that we will do away with the scams and problematic protocols,” he mentioned.
Eventually, Parallel Finance will broaden onto different chains moreover polkadot. For now, he’s targeted on making the platform easy-to-use, environment friendly, scalable, and compliant with regulatory necessities.
“We are actually fascinated by constructing a holistic ecosystem the place when customers log in with their wallets, they’ll simply do all the pieces from funds to incomes yield to buying and selling derivatives with one click on,” he mentioned. “The solely method that it really works for 1 billion individuals is to simplify the method as an alternative of letting customers go to 10 completely different web sites to do 10 various things.”