- Yubo Ruan is the founding father of Parallel Finance, a decentralized lending and staking protocol.
- By way of his VC fund, the 25-year-old invested early into high altcoins equivalent to solana and polkadot.
- He shares determine profitable protocols and the way he plans to carry DeFi to a billion folks.
At 25 years outdated, Yubo Ruan has in all probability achieved greater than his friends might think about.
In highschool, Ruan began his first firm Alisimba Applied sciences in Beijing, China whereas profitable 13 invention awards and 5 patents. In school, he arrange his first enterprise capital fund Skylight Funding to spend money on disruptive applied sciences. In 2017, he launched his second VC fund 8 Decimal Capital to deal with blockchain and crypto corporations.
Now, the serial entrepreneur is attempting to perform his loftiest objective but — to carry decentralized finance to a billion folks through his lending startup Parallel Finance.
Constructed on the polkadot ecosystem, Parallel Finance is backed by outstanding 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 Sequence A funding spherical in August.
Ruan discovered about crypto in early 2014. Whereas engaged on his first firm within the well-known Storage Café in Beijing, which used to simply accept bitcoin as cost, he met a gaggle of bitcoin and ethereum miners who would later change into a few of the greatest crypto gamers in China.
That have 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 beneath $1, based on 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, based on CoinGecko pricing.
Methods to determine profitable crypto tasks early
When attempting to determine tasks with long-term potential, he focuses on three components: (1) community results, (2) cheap as a substitute 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 the better the variety of customers who be a part of a community, the extra worth it accrues. Social media platforms together with Fb, Instagram, and TikTok illustrate the facility of community results, whereas main cryptocurrencies equivalent to bitcoin and ethereum have additionally change into extra invaluable as extra folks be a part of the networks.
Opposite to standard knowledge, Ruan likes to spend money on tasks with valuations that may appear costly. Reasonably than specializing in low cost property, he believes that greater, although not unreasonable, valuations might sign that the tasks have gained higher consensus and extra investor belief.
“Once we invested in solana, though it was like 33 cents, it was at a pair hundred million greenback valuation,” he recalled. “It was fairly insane at the moment as a result of it is fairly costly for a community that had by no means launched something.”
It was the same story with polkadot, which he invested at beneath $1 however with an over $1 billion valuation, Ruan stated.
The valuations additionally made sense to him due to the observe document of the founders. Polkadot’s founder Gavin Wooden additionally co-launched ethereum the place nearly all of the DeFi and NFT actions happen at this time.
“I put at the least 40% of the load in direction of evaluating who’s the founder and what they’ve completed earlier than,” he added. “We actually suppose that the entrepreneurs who’ve completed nice creation earlier than would probably proceed to create higher merchandise in the long run.”
Proper now, Ruan likes StarkWare, an ethereum layer-two scaling community. The Israel-based firm not too long ago achieved a $2 billion valuation after elevating $50 million in a funding spherical led by Sequoia Capital. To make sure, Parallel Finance is constructing on high of one among StarkWare’s merchandise StarkNet.
Constructing the ‘Apple of finance’
Lately, Ruan is now not actively investing in crypto tasks. With the objective of bringing DeFi to a billion folks, he’s 100% centered on constructing Parallel Finance into the “Apple or Google of Finance.”
The younger founder has quite a bit to show although.
DeFi, which refers to monetary companies actions automated by software program, is notoriously tough and complex to navigate. In the meantime, scams and frauds have mushroomed as merchants flock to high-yielding DeFi methods like yield farming. In keeping with 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 biggest third-party program on polkadot, based on DeFi Llama.
To develop its 100,000 world customers to a billion, Ruan stated he plans to construct a one-stop ecosystem the place customers can conduct all kinds of monetary companies actions associated to their DOT token holdings, whether or not it is crowd loans, buying and selling, staking, or minting stablecoins.
The corporate will even construct a permissioned app retailer to root out frauds and scams.
“We are going to choose what sort of purposes can run on our chain in order that we will eliminate the scams and problematic protocols,” he stated.
Finally, Parallel Finance will broaden onto different chains moreover polkadot. For now, he’s centered on making the platform easy-to-use, environment friendly, scalable, and compliant with regulatory necessities.
“We’re actually all for constructing a holistic ecosystem the place when customers log in with their wallets, they will simply do every thing from funds to incomes yield to buying and selling derivatives with one click on,” he stated. “The one approach that it really works for 1 billion folks is to simplify the method as a substitute of letting customers go to 10 completely different web sites to do 10 various things.”