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Felix Xu, Co-Founder of ARPA & Bella Protocol – Interview Series

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Felix Xu is Co-Founder and CEO of ARPA, and Bella Protocol. Felix graduated with Finance, Information Systems degrees from New York University, which is known for its Computer Science and AI research. For the past 6 years Felix have been working on venture capital investment in Fintech, big data and AI startups. Most recently he led blockchain sector research and early stage investment at Fosun Group, one of the largest conglomerates in China.

ARPA is a blockchain-based layer 2 solution for privacy-preserving computation, enabled by Multi-Party Computation (“MPC”). Founded in April 2018, the goal of ARPA is to separate data utility from ownership, and enable data renting. ARPA’s MPC protocol creates ways for multiple entities to collaboratively analyze data and extract data synergies, while keeping each party’s data input private and secure.

Bella Protocol is an aggregated user interface for existing Decentralized Finance (DeFi) protocols. Built by the ARPA project team, Bella Protocol aims to simplify the user experience of existing DeFi protocols, and to allow users to deploy their assets and earn yield with ease.

You first came across blockchain as an investor at Fosun Group. Could you share what you saw and what made you realize it was so transformative? 

It was in 2016 that I joined Fosun Group — a Fortune 500 company dealing in diverse sectors, including pharmaceuticals, real estate, and consumer products. I was working with the group’s venture capital division, which required me to focus on Fintech innovators and companies. And it was during this time that I came to know of blockchain technology. Upon diving deeper into the subject and by exploring its potential, I soon realized how blockchains were revolutionizing payments, locally and internationally. Above all, it solved the woes that came along with traditional cross-border payments: high fees, long processing times, and poor conversion rates.

The more I researched about blockchain, the fonder I got of the technology. This inspired me to conduct a thorough analysis of the industry’s trends to uncover the scope of cryptocurrencies in general and Blockchain-as-a-Service (BaaS). And then in 2017, I presented my findings to Fosun’s management. However, back in the day, they believed SaaS for logistics, finance, and international trade to be blockchain technology’s future, and therefore invested in enterprise-grade solutions like Hyperchain and Onchain.

But my position was on the contrary, as I preferred cryptocurrencies for their vision of decentralization and permissionless interactions. In my opinion, crypto was (and still is) a technology for the people, while blockchain is the potential foundation for infrastructures that could make society more equitable in terms of value generation and distribution. So in 2017, I began my crypto journey by stacking bitcoins and ether.

Could you share the genesis story behind ARPA?

I have always been a believer of freedom. Fascinated by Bitcoin and Ethereum’s vision, in early 2018, I decided to create a new blockchain protocol that focuses on data privacy.

From the very beginning, ARPA’s mission has been to separate data utility from ownership, thus enabling data renting. On this journey, our team has contributed to the development of Multi-Party Computation (MPC), which is arguably among the most cutting-edge cryptographic algorithms to date.

ARPA’s MPC protocol paves the way for multiple entities to collaboratively analyze data and extract synergies while keeping each party’s data input private and secure. Over the years, we helped set up the international standard of privacy-preserving computation, namely IEEE, and have raised substantial awareness on individual data privacy.

Moreover, we found that cryptographic algorithms can have many promising by-products, such as the verifiable random number generator. Now, we no longer limit ourselves to privacy, but explore the full spectrum of cryptographic applications in blockchain.

ARPA is described as a secure computation network of Multi-party Computation (MPC). Could you elaborate on what this means specifically?

ARPA is a blockchain-based, layer-2 solution for privacy-preserving computation, leveraging cryptographic Multi-Party Computation (MPC). At present, the ARPA token runs on the Ethereum network. But developers can build custom privacy-preserving dApps on other blockchains compatible with ARPA.

Against this backdrop, we are now entering the NFT space with a brand new verifiable randomness generator called ARPA Randcast. Our team started building this decentralized RNG in early 2021. We are expecting to go live with the Alpha version of our product by early next year.

What are some use cases for ARPA?

ARPA’s privacy-preserving computation can enable many immediate use-cases, including credit anti-fraud, secure data analysis, precision marketing, joint AI model training, and key management systems. Moreover, crypto-based custodian services are increasingly adopting MPC threshold signatures.

On the other hand, ARPA Randcast can have diverse applications in blockchain-based games, lottery, NFT minting, and so on. And because Randcast is blockchain agnostic and a part of the infrastructure offering, it is considerably cheaper than its peers, like Chainlink VRF.

In early 2020, you founded Bella Protocol whose mission was to increase the penetration rate of decentralized digital asset management. Why did you feel it was the right time to launch Bella Protocol? 

I am a big fan of DeFi. An early adopter, one could say. I have been using Uniswap ever since its first version. Likewise, I use Synthetix, Maker, and so on. But the reason behind all this is quite straightforward. By enabling lending and trading via smart contracts, instead of using blockchains for exclusive assets, we can build the entire financial system on-chain and get rid of black boxes such as Centralized Exchange (CEX) platforms. And I clearly remember how DeFi’s TVL was a mere $400 million in January 2020, when we decided to incubate Bella Protocol.

Could you describe what the Bella Defi suite is?

Bella Protocol​ is a suite of open finance products aiming for the mass adoption of decentralized asset management. Bella’s first yield product, Flex Savings v2, is currently live on Ethereum, with a TVL of $50 million.

Moreover, the core team is creating Bella Virtuoso — a permissionless strategy platform that connects investors with the best LP strategies on Uniswap V3. The product comes with built-in backtesting tools and data infrastructure ‘Tuner’ for strategy builders.

Tuner, a programmatic Uniswap V3 simulator allows strategy builders to backtest their strategies with mainnet data. It runs independently with high-fidelity, completely reproducing the intricate design and implementation of Uniswap V3, on a transaction-by-transaction basis, without EVM.

Tuner is live: https://github.com/Bella-DeFinTech/uniswap-v3-simulator

The Bella Eco Fund was recently announced, what will be the size and focus of this fund?

It is an ecosystem fund worth $20 million, which the Bella Foundation will use to support crypto-based metaverses and other DeFi projects. As such, our investment endeavors began in 2019 and there are many names in our current portfolio: My Neighbor Alice, Litentry, Kylin, Dora Factory, Dodo, Suterusu, MonoSwap, Chronicle, Maverick, Parami, CryptoArt, LunarCrush, UFit, Structure Finance, Mars Finance, Solv, Sypool, Corite, Raiinmaker, Tamago, and many more.

What do you personally look for in an entrepreneur when debating making an investment?

We would love to support entrepreneurs who are genuinely passionate about crypto, share our long-term vision, and are willing to join the struggle for transforming finance. In general, though, I tend to look for the following aspects:

  • Is the team enough crypto native? Do they live and breathe in crypto? Is the protocol permissionless, decentralized, transparent, community-driven, and rule-based?
  • How well does the product address current issues? Does it solve existing problems? Or better still, does it create new demand?
  • Does the protocol have a long-term goal? If so, then who set its narrative and why? Can the narrative adapt to the changing landscape? Is the team open-minded enough to delegate to the community?

Thank you for the great interview, readers who are interested to learn more can visit ARPA or visit Bella Protocol.

Antoine Tardif is the founding partner of Securities.io, the CEO of BlockVentures.com, and has invested in over 50 blockchain & AI projects. He is the founder of Unite.AI a news website for AI and Robotics. He is also a member of the Forbes Technology Council.

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