Like many, Amy Wu, now head of ventures and commercial at massive cryptocurrency exchange FTX, first got into crypto during the 2017 bull run. But it wasn’t until the pandemic that she started investing heavily in the industry for Lightspeed, the venture firm where she served as partner at the time.
“It was the next bull market for crypto, and I felt we were going to miss out on a multi-trillion dollar industry if we didn’t start studying and participating in crypto deeply,” she said. She and her Lightspeed partners started taking “five to 10 crypto meetings a day,” learning a lot at, well, lightning speed.
One of Wu’s most pivotal investments through Lightspeed was in FTX, where she became an “active member” of the advisory board. She got to talking regularly with the company’s co-founder and CEO, Sam Bankman-Fried, whom she met in early 2021 and felt “inspired” by.
“As longtime venture investors, we are looking for generational CEOs,” she said. “It was so obvious that Sam was extraordinary.” Wu was impressed by his natural ability to explain complex crypto concepts without using any jargon – like the way Ray Dalio effortlessly explains credit to laypeople. Bankman-Fried’s knack for this, and his ability to operate effectively as a CEO, convinced Wu to join FTX full time at the beginning of this year.
Now based in the Bahamas at the company’s headquarters, Wu leads FTX’s $2 billion venture capital fund, FTX Ventures, as well as initiatives for the company in gaming, the commercial space, and mergers and acquisitions. When CoinDesk caught up with her, she was preparing for Crypto Bahamas, a roughly 1,800-person conference put on by FTX and SALT, an events platform, with the goal of bringing together crypto industry natives and key players in traditional finance and entertainment to foster “interdisciplinary conversation,” she said.
“We’re all going a little bananas right now,” she adds before our call. Still, she takes the time to tell CoinDesk how she responds to traditional finance workers’ qualms about crypto, why gaming companies are so bullish on Web 3 and what a tokenized dating app might look like.
When you’re talking to traditional finance people who are really averse to crypto, what are some of the concerns they bring up about crypto and blockchain?
The questions that I get all the time are, ‘What are the real use cases? Are people using crypto for things other than trading or as a store of value?’ I also get, ‘There's so many hacks and vulnerabilities in the space. What is it going to take to reduce that?’ Then, of course, the number one question I get is, ‘What's the regulatory environment for crypto?’
How do you answer those questions?
On the regulatory side, we’ve decided to be a very active participant. Sam spends most of his time talking to regulators in D.C. He plays an active role working with them and discussing what the right regulations might look like, that are fair and protect consumers, but also drive the right incentives. FTX was founded on the assumption that we were going to be a completely regulated industry.
As for all the use cases, the reality is that this year, we’re seeing that some of the strongest teams in traditional industries are moving into and building in and learning about crypto. I'm really hoping in the next 18 to 24 months, we'll actually start seeing these killer app use cases come out. There's a lot in gaming, but dating apps, social networks and utility consumer apps are also going to bake in incentivization with Web 3 elements. That's what I'm most excited about seeing.
The third question people ask about hacks – this is a problem. There was literally a [$625 million] hack on Axie Infinity’s Ronin bridge last month. People don't feel safe in crypto. That needs to be solved. There needs to be more security software and different tooling to really help fix that issue. It's one of the biggest areas that we're looking at investing in right now.
You mentioned a blockchain dating app as an opportunity for a killer app use case. What would that look like?
I haven't seen one yet. However, it'd be pretty fun to utilize the incentive mechanisms of a token in a dating app format. I can imagine that maybe there's a date referral program where it's like, okay, if I refer a lot of great dates that turn into great third or fourth dates, then I get rewarded more tokens, or something like that – trying to improve the dating funnel and also driving user adoption for the app.
You also mentioned Sam going to D.C. to help develop the “right” regulations for the crypto industry. What would the right regulations look like to you?
One set of regulations where you're essentially balancing the consumer protections with incentivizing the right behaviors – you don't want to create regulations that, for example, only benefit large incumbents, making it hard to compete if you're a new company. Some of the GDPR data regulations in Europe, for example, are just benefiting Google and Facebook, and smaller players can’t compete.
There’s an element of that in crypto also. Lawmakers need to have a level of understanding in order to start thinking about, ‘How do I tax this? How do I regulate this?’ Otherwise, it just creates a lot of friction, and doesn't have the intended effects of consumer protections.
FTX reported a user base growth of 60% between October 2021 and January 2022, with daily trading volume rising to $14 billion on average. To what do you attribute FTX’s massive growth in such a short time?
It was a combination of Sam running the company very distinctly, and also just being in the right place at the right time. There was tremendous product market fit because there essentially wasn't an exchange at the time that was built around a more hardcore use case of trading. At the time, a lot of exchanges were tailored for retail users. FTX was built for traders by traders. The feel of our FTX Pro app was designed for a more professional use case.
We then acquired Blockfolio, which has this great retail experience – a lot easier to use UX. But FTX’s growth is the combination of a lot of things, including a blistering pace that Sam has set. The culture of execution within FTX has really contributed to the success of the business. There are virtually no titles within the company. Many of us have external titles that we use, so that external parties can understand our role, but internally, it's an extremely flat organization.
The decision making is both very centralized and also decentralized at the same time. The number of employees is very small – we only have about 300 people. For the size, revenue base and trading volumes that we have, most of our peer exchanges have 10 times the number of employees. But we think we're operating and executing in aggregate faster because when you're lean, you can move faster.
Also, Sam is basically online working 24/7. He has this uncanny ability to have a grasp on everything that's happening around the company. He's able to very quickly provide guidance, but allow any employee within the company to feel a lot of empowerment, to take hold of any project. They feel a lot of excitement about that.
I know one of your big focuses at FTX is gaming. What big gaming companies in the Web 2 world are spinning off Web 3 divisions right now?
You can count on one hand the number of large gaming companies that are not doing that. Virtually all of them are. That’s because a large gaming company is, essentially, a collection of dozens of IPs. They know that it's a portfolio management strategy. You can't predict how big one of your games is going to be, unless it's a beloved franchise like Halo.
Therefore, they launch a number of games, and they see what really resonates with gamers. Most gaming companies feel that they can't miss out on Web 3. We already know that Axie Infinity has attracted over 2 million daily active users. There is definitely an audience out there that's super excited about it. Basically, Web 3 is something that almost no gaming company can afford not to experiment in.
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