Interview: Micky, PANews

Author: Joy, PANews

Recently, during Token2049 in Singapore, PANews interviewed Willy, the Chief Operating Officer of WOO. In the face of fierce competition in the crypto market, WOO has chosen a path of differentiation through innovation, particularly with its newly launched social trading product, Social Trading, which introduces unique features such as reverse copy trading, aimed at providing users with more flexible risk management and profit distribution options. Additionally, WOO has demonstrated its commitment to promoting healthy market development through adjustments to its token economic model and improvements in liquidity solutions.

In the interview, Willy emphasized the importance of simplifying DeFi operations by integrating AI technology, making it more user-friendly and enhancing the user experience. He believes that the fusion of AI and cryptocurrency should not remain merely a conceptual hype but should become one of the driving forces for industry advancement. However, he also pointed out that the balance between centralization and decentralization when combining AI with the crypto world will be a significant challenge in the future.

Here are the main points of the interview:

PANews: First, could you briefly introduce yourself and WOO's business layout?

Willy: I am Willy, the COO at WOO. WOO has two products, WOO X and WOOFi, which are a centralized and decentralized exchange, respectively. Together, they have a daily trading volume of around $700 million to $1 billion.

WOO X focuses on social trading, targeting professional traders. WOOFi specializes in cross-chain swaps and currently supports 11 EVM chains, with support for Solana coming soon. Besides swaps, our decentralized contract trading has performed well in the past six months, currently holding about 3% market share. We also have the WOO token, which has been live for just over three years and is listed on almost all major exchanges.

I personally come from a Web2 background, having founded two companies, one of which I sold. After that, I entered the crypto space. The founder of WOO is a friend of a friend, and after we started collaborating, I gradually began managing the entire WOO product and business. I have been with WOO for about two and a half years now.

PANews: You just mentioned that WOO X recently launched the social trading product, Social Trading. What was the reason for launching this feature? Compared to other centralized exchanges that have already launched similar features, what unique characteristics and advantages does your product have to attract users and traders?

Willy: When we develop products, we don't want to replicate our competitors. Given the resources, scale, and brand of the larger centralized exchanges, we don't have an advantage there. So, in seeking differentiation, we looked at user pain points. Social Trading is a bilateral platform with both copy traders and lead traders, and we identified a significant pain point on the lead trader's side. Many traders have good trading skills, but when they lead trades, they feel immense pressure because they are expected to maintain a good PNL and sharp ratio 24/7, regardless of market conditions. The expectations are that they must perform well! This creates a lot of pressure on lead traders, leading to a situation where good traders are reluctant to lead trades, leaving it to those who are more willing to "show off."

The second pain point comes from the copy traders. Our platform's vision is to provide all tools that can improve the win rate to traders. On some platforms, lead traders can go long or short, but copy traders have no choice but to follow. So, based on this pain point, we introduced the "reverse copy trading" feature.

We believe that reverse copy trading may not generate a massive trading volume, but it acts like a nuclear deterrent, significantly impacting the psychology of both copy traders and lead traders. For example, copy traders now know that they can trade based on their own strategies, and if they perform poorly, they can reverse copy. This alleviates the pressure on lead traders to perform well 24/7. Copy traders can also adjust their strategies based on market conditions, such as interest rate cuts or elections, allowing them to make judgments based on their understanding of the lead trader. So, we identified this user pain point and developed this product, which has received very positive feedback so far.

PANews: As you mentioned, many exchanges have similar products. What do you see as your competitive advantages? How do Social Trading and Copy Trading differ?

Willy: I think the first point is our reverse copy trading capability, which is our biggest differentiator from other major trading platforms. The second point is our risk management. For example, when users copy trades, they can choose to adjust each of their positions. They might like the lead trader's BTC long but not their memecoin trades, so users can make their own adjustments. We also allow for stop-loss settings, which help copy traders control their risks and avoid significant volatility if they want to reduce it.

The third point is our profit-sharing mechanism. Some platforms seem to distribute profits based on a lead trader's performance at a given moment, but our strategy compares the lead trader's last PNL with the next one, and we take an average value to distribute profits. This ensures that copy traders don't end up in a situation where a lead trader makes a lot of money one moment and then loses it the next.

The differentiation between Social Trading and Copy Trading is quite subtle. I understand Copy Trading as simply following a lead trader, while Social Trading involves a group of people working towards a common goal, which happens within a community. It can become a social game. For instance, during the pandemic, the GameStop incident saw many young people following the "Roaring Kitty" and buying based on his positions, willing to profit or lose alongside him, even if it wasn't necessarily a good thing. Social Trading inherently includes social elements, which go beyond rational analysis of the market and order book, incorporating some non-rational elements related to KOLs, lead traders, and traders. However, whether this leads to profit or loss remains to be seen in future practice.

PANews: We noticed that recently WOO locked about 20% of the WOO token supply in the treasury. What was the reason for this? How do you view the current situation where the token inflation cycle cannot match project development?

Willy: In the current market, many new tokens have high fully diluted market caps but low circulation rates, leading to significant selling pressure, especially from VC projects. WOO has not faced this issue because we started relatively early, over three and a half years ago. We believe the market is currently polarized; on one side, there are meme tokens that ideally should have no connection to fundamentals, while on the other side, there are tokens with solid fundamentals, revenue, and healthy economic models, backed by stable teams, which have significant upside potential. We want to position ourselves on the side with fundamentals. So when we observed this situation, we felt the need to make some adjustments to our economic model. First, we aim to reduce the inflation rate again, targeting below 4% by 2025. Secondly, we want the community to see our intentions; we have locked a large number of tokens in our wallet, and we have set up several smart contracts. These tokens will only be released when the FDV reaches a certain level. This is also to communicate to the community that our goal is to move in that direction.

So how do we get there? For example, as I mentioned, focusing on fundamentals and revenue is our initial motivation for this adjustment, and we want everyone to know that we care deeply about fundamentals.

PANews: Besides adjustments to the economic model, what measures has WOO implemented to address the current liquidity challenges in the crypto market?

Willy: In terms of liquidity, we have over half of the top 15 market makers on WOO X. We have a DMM Program that works well for both large and small tokens and contracts, but I think we still have room for improvement. In my view, I would rate our performance at about 80%. On WOOFi, we have made many technical optimizations for liquidity. For example, SPMM supports multiple chains. WOOFiPRO works closely with Orderly, which has excellent liquidity and technical infrastructure, and we rely on them to provide better services.

Ultimately, I believe that our social trading can bring better growth to our liquidity. To be honest, the flow from social trading is still quite good for market makers. This is the direction and curve I see for liquidity development.

PANews: What sectors do you see as promising for development, and what will be WOO's business focus and direction?

Willy: Personally, I still see three promising sectors: DeFi, AI, and Social. DeFi goes without saying, as we are actively involved in it. Regarding AI, I believe the greatest potential of AI is not just to hype new tokens but to make crypto easier to navigate. Currently, the entry barrier is too high; discussing DeFi with someone outside the industry can be quite challenging. However, the integration of AI with crypto is crucial for simplifying various processes, such as onboarding, trading, cross-chain interactions, and standardizing different assets.

There may be a strong debate emerging here. For AI to perform well, many aspects need to be centralized, so we will face a debate about the centralization and decentralization of AI integration. I believe AI could provide us with the next potential growth point.

As for social, I think Web2 social platforms have already done very well. Rebuilding it in Web3 has little significance, even with the addition of SocialFi. I believe the form of social interaction is evolving from human-to-human interaction to human-to-machine interaction and then to machine-to-machine interaction, which is somewhat related to AI. In the future, individuals will have many of their own agents. Currently, Web2 has projects like character AI. However, it has been found that the retention rate for such companion AIs is particularly low because there isn't a clear positive feedback mechanism for users.

I think the next step is for agents to have their own wallets and trading capabilities, for example, having their own missions within a blockchain environment. A person can have many AI agents, and these agents will interact with other AI agents, leading to a lot of positive or negative feedback based on previous interactions. At that time, there will also be social situations arising from the interactions between AI and AI. For instance, my interactions with you may not only involve financial transactions but could also include working together towards a common goal, thus forming a community.

I believe the next generation of social interaction may grow from this concept. It’s not just about scrolling through images or videos; it’s more about machine interactions that create new forms of socialization, involving both financial and social feedback. This is my personal vision.

PANews: What are WOO's plans moving forward? How do you view the upcoming market trends, and when do you think the market turning point will appear?

Willy: We will continue to deepen and enhance social trading. Additionally, we will improve the DeFi trading experience, onboarding experience, and cross-chain capabilities. Finally, we will leverage AI capabilities in our trading products to simplify DeFi, using AI to create market intelligence and provide data to traders. We have already started working on this, and you will soon see some products.

The market is the most challenging aspect; I really can’t predict the trends because if I could, that would be incredible. However, one thing we are paying attention to is that whether the market is good or bad, especially in crypto, ultimately depends on technological innovation. If we do not see continuous technological innovation and product experience innovation, I believe the market will not perform well. If we can find technological and experiential innovations, then I think the market will grow higher. We are very focused on this; if it happens, I would be very bullish. But right now, I think there is a positive aspect in the market, which is the so-called "homogeneous competition," that will force everyone to differentiate and optimize. If there are technological and experiential innovations, I believe we can see growth, but ultimately, the fundamentals are still the most important.

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