- Yubo Ruan is the founding father of Parallel Finance, a decentralized lending and staking protocol.
- Via his VC fund, the 25-year-old invested early into prime altcoins corresponding to solana and polkadot.
- He shares methods to determine profitable protocols and the way he plans to deliver DeFi to a billion individuals.
At 25 years previous, Yubo Ruan has most likely achieved greater than his friends may 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 concentrate on blockchain and crypto corporations.
Now, the serial entrepreneur is attempting to perform his loftiest aim but — to deliver decentralized finance to a billion individuals by way of his lending startup Parallel Finance.
Constructed 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 Collection 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 just accept bitcoin as fee, he met a gaggle of bitcoin and ethereum miners who would later change into a number of the largest crypto gamers in China.
Parallel Finance
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 under $1, in response to Ruan.
The early bets have paid off handsomely. As of noon Friday, solana, the fifth-largest cryptocurrency by
market cap
, was buying and selling at round $148, whereas polkadot, the Tenth-largest token, was altering palms at $27, in response to CoinGecko pricing.
The best way to determine profitable crypto tasks early
Moreover the 2 clear winners, Ruan additionally participated within the early rounds of chia (XCH), chainlink (LINK), 0X (ZRX), and digital asset firm Securitize.
When attempting to determine tasks 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 the higher 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 ability of community results, whereas main cryptocurrencies corresponding to bitcoin and ethereum have additionally change into extra priceless as extra individuals 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 larger, although not unreasonable, valuations may 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 an analogous story with polkadot, which he invested at under $1 however with an over $1 billion valuation, Ruan stated.
The valuations additionally made sense to him due to the monitor file of the founders. Polkadot’s founder Gavin Wooden additionally co-launched ethereum the place the vast majority of the DeFi and NFT actions happen in the present day.
“I put no less than 40% of the burden in direction of evaluating who’s the founder and what they’ve carried out earlier than,” he added. “We actually suppose that the entrepreneurs who’ve carried out nice creation earlier than would seemingly 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 certain, Parallel Finance is constructing on prime of one in every of StarkWare’s merchandise StarkNet.
Constructing the ‘Apple of finance’
Lately, Ruan is now not actively investing in crypto tasks. With the aim 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 rather a lot to show although.
DeFi, which refers to monetary providers actions automated by software program, is notoriously tough and sophisticated to navigate. In the meantime, scams and frauds have mushroomed as merchants flock to high-yielding DeFi methods like yield farming. In line 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 most important third-party program on polkadot, in response to 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 providers actions associated to their DOT token holdings, whether or not it is crowd loans, buying and selling, staking, or minting stablecoins.
The corporate can even construct a permissioned app retailer to root out frauds and scams.
“We’ll choose what sort of purposes can run on our chain in order that we are able to do away with the scams and problematic protocols,” he stated.
Finally, Parallel Finance will develop onto different chains in addition to polkadot. For now, he’s targeted on making the platform easy-to-use, environment friendly, scalable, and compliant with regulatory necessities.
“We’re actually interested by constructing a holistic ecosystem the place when customers log in with their wallets, they’ll simply do every part from funds to incomes yield to buying and selling derivatives with one click on,” he stated. “The one manner that it really works for 1 billion individuals is to simplify the method as an alternative of letting customers go to 10 totally different web sites to do 10 various things.”
