Exclusive Interview with He Yi: Which Web3 Projects Does Binance Labs Prefer?

Written by: TIMMY SHEN

Compiled by: TechFlow

Original article: Binance’s US$7.5 billion woman sees plenty of promise in bear markets

Yi He, who manages a multi-billion dollar portfolio at Binance Labs, is seeking investments in Web3 projects ranging from infrastructure and applications to data, analytics, and security.

Yi He, who co-founded the Binance cryptocurrency exchange with Changpeng Zhao in 2017, now oversees the company's venture capital arm. She believes that downturns and tough economic conditions are precisely the right time to seek out promising investment opportunities.

In an interview with Forkast, Ms. He—appointed last month as head of Binance Labs, the incubator and investment division under the world’s largest crypto exchange managing $7.5 billion and overseeing more than 200 projects—said she has positive plans for the business.

The 35-year-old said she is looking for early-stage projects that bring long-term benefits to the industry. While she sees current bear market conditions as once-in-a-lifetime opportunities, she declined to provide specifics. She added that it's essential to filter out “copycat” projects chasing trends solely to make quick profits. Such projects lack solid business models and won’t last, she said.

Last month, Binance Labs reported a 2,100% return since its inception in 2018. Its portfolio includes notable investments such as Axie Infinity, Polygon, The Sandbox, and STEPN.

In June, Binance Labs announced the closing of a $500 million fund, backed by internet investment firm DST Global Partners, Breyer Capital, private equity funds, several family offices, and corporate investors.

Below is an edited transcript of the interview for brevity.

Timmy Shen: What is your investment strategy? How does it differ from how venture capitalists (VCs) invest in the internet or Web 2.0 space?

Yi He: We all know that bear markets present excellent investment opportunities because many teams just trying to make a quick buck will be forced out of the industry. Now is the perfect time to support those who genuinely want to build sustainably and believe in this space.

One key difference between fundraising in Web3 and Web2 is that Web3 projects don't necessarily need to raise money through VCs—they can issue tokens directly and sell them to users instead.

Under these circumstances, rather than just providing capital, VCs add greater value by offering guidance—on technology, security, tokenomics, for example. This is important because users and their communities are central to any Web3 project.

Timmy Shen: You mentioned this is a good time to invest. I’m curious—how do bull or bear markets affect your venture investments?

Yi He: Generally speaking, whether in a bull or bear market, we must first clarify what we truly want. In a bear market, I think we should be more proactive in investing—but not invest for the sake of investing.

Trend-chasing is common in the investment world. Many funds worry they might miss a four- or five-year investment cycle. Some of our LPs have even suggested increasing the number of investments and speeding up deployment. But I’ve told them: don’t rush.

Timmy Shen: What types of projects are you most interested in investing in?

Yi He: We focus on three types of projects:

The first type builds infrastructure.

The industry is still in its early stages. In the future, I envision people being able to use blockchain-native products almost everywhere, much like how we now take office software and social media for granted. However, technical bottlenecks remain. That’s why infrastructure remains a core area for our investment—whether it’s Layer 1 or cross-chain protocols.

The second type runs various blockchain-based applications.

We’re seeing more and more projects with large user bases, such as those using P2E or M2E models. We’re particularly watching products with innovative use cases.

For these projects, we ask questions similar to those we’d pose to a Web2 company: What’s your business model? What problems do you solve? Where’s the innovation? These are standard but crucial questions.

The third type provides blockchain-related services that support broader industry growth, such as data and security.

It’s rare to see major Web2 companies hacked, yet security breaches happen constantly in Web3.

For years, people in the Web3 space have repeated: “Code is law.” If your code isn’t secure, you’re responsible when things go wrong. I agree—but if we want mass adoption, our products must also be easy to use and accessible to more people.

Besides, I prefer projects with original approaches over mere imitators.

If you tell me you’re just copying a hot project and targeting a similar user base to quickly cash in, I’m not interested.

Binance doesn’t invest to chase short-term gains—we believe in "long-termism."

There are still founders and entrepreneurs who think raising funds in Web3 is easy and then decide to coast.

These entrepreneurs fail to realize that once you, as a founder, make promises to users, you must deliver. You can’t just pocket users’ money, declare yourself financially free, and then quit.

Still, many in the industry are exploring different paths to success. We aim to find those who value long-term building over short-term profits.

Timmy Shen: Before you took over Binance Labs, it invested in X-to-earn projects like Axie Infinity and STEPN. What’s your view on the X-to-earn model?

Yi He: Projects running X-to-earn models must understand that the key isn’t “earn,” but “X.”

A classic example is P2E games. If users join only to earn money, once the earning phase ends, the game essentially dies—user numbers drop, and token prices fall.

The fundamental question is: Without the income component, is the game still attractive? Would enough people still pay to play?

Timmy Shen: In February, Binance said it would invest $200 million in Forbes, but CEO Changpeng Zhao said in June that this might change after the SPAC deal failed. Can you update us on the latest status and your media investment strategy?

Yi He: We’re still monitoring the Forbes investment. It was tied to a SPAC IPO, but there seem to be some difficulties, so adjustments are underway. Perhaps some of their shareholders want to dilute their stakes.

Regarding media investments, when Elon Musk said he wanted to acquire Twitter, we saw it as a great opportunity—Twitter has a massive user base and could benefit Web3 education.

Right now, we’re not actively targeting media as a specific investment category, but if we come across strong opportunities, we’ll certainly pay attention.