Does YZi Labs have a dream?

Author: Gu Yu, ChainCatcher

On August 26th, YZi Labs announced the finalists for the fourth quarter of its EASY Residency program. All 24 early-stage projects will receive up to $500,000 in investment, totaling approximately $12 million for the quarter.

From the perspective of project focus, this round of investments is significantly different from the traditional impression of YZi Labs. The 24 projects are concentrated in areas such as stablecoin payments, cross-border settlements, on-chain foreign exchange, credit, digital banking, institutional liquidity, AI agents, and on-chain asset management. YZi Labs even listed "global payments" as a key investment theme for this quarter.

In a market where the primary crypto market remains highly concentrated and the environment for early-stage project financing is not favorable, the continuous hosting of residency programs and the substantial financial investment in early-stage teams undoubtedly sends a positive signal to entrepreneurs. However, for YZi Labs, the question may not be "whether they dare to invest," but rather a more difficult one: as an investment institution managing over $1 billion, backed by the founder of Binance, and possessing global exchange-level resources, is YZi Labs truly a top-tier VC? Looking at the number of investments alone, the answer seems straightforward. According to RootData, YZi Labs has completed 34 investment rounds in the past year, second only to Coinbase Venture. However, if the metrics are changed from "how much was invested in" to "what was invested in, why was it successful, and whether it can define the next round of industry opportunities," YZi Labs' answer is not so appealing. Looking at the most popular prediction markets and payment sectors in the past year, apart from a few BNB Chain ecosystem projects, YZi Labs has achieved virtually nothing in these two areas, missing out on star projects like Polymarket, Kalshi, Rain, KAST, BVNK, and RedotPay. On the surface, it is one of the most diligent buyers in the market; looking deeper, it is more like an institution that has not yet defined itself—wanting to be an independent family office, yet unable to escape the gravitational pull of the Binance ecosystem, with inherent deficiencies in investment style and scope. YZi Labs' most unique feature has never been its capital size (claiming to be over $10 billion), but rather that it once had the world's largest cryptocurrency exchange as its "backing." As a continuation of its predecessor Binance Labs, YZi Labs' early-stage investments naturally possess capabilities that are difficult for traditional VCs to replicate: the ability to connect exchange users and liquidity, the ability to participate in the ecosystem building of BNB Chain, and the ability to leverage Binance's brand and global network of entrepreneurs to acquire projects. Therefore, for many early-stage projects, receiving investment from Binance Labs inherently means potential liquidity, market exposure, and ecosystem resources. This also explains a noteworthy statistic: according to RootData's previous statistics, of YZi Labs' 229 investments, 154 projects issued tokens, of which 150 were listed on at least one exchange, and 95 eventually landed on Binance. This figure, of course, cannot simply prove that "investment equals listing," nor can it be used to infer the existence of a direct "investment-listing" channel. However, it at least illustrates one fact: a significant portion of YZi Labs' historical investment logic naturally overlaps with Binance's ecosystem capabilities. This is also the biggest difference between YZi Labs and independent crypto VCs like a16z, Paradigm, and Pantera. Although YZi Labs transformed into a family office in early 2025, operating independently from Binance and currently primarily managing the funds of Changpeng Zhao and a few early Binance executives, it fundamentally maintains an inseparable connection with Binance in terms of interests and team ties. In fact, YZi Labs' investment style is quite distinct: it prefers projects with existing real demand, those that can be integrated into the existing ecosystem, and those that can be rapidly scaled up using platform resources. In the past, this style was mainly reflected in investments around BNB Chain in DeFi, trading, wallets, and infrastructure; in the last two years, it has expanded to stablecoin payments, RWA, prediction markets, and AI. For example, in the payments sector, YZi Labs invested in Better Payment Network this year, betting on multi-stablecoin payments, cross-border settlements, and on-chain FX; in the prediction market sector, it has entered the market through projects such as Predict.fun and Probable. EASY Residency is now prioritizing stablecoin payments, institutional settlements, and on-chain FX. The core of this logic isn't "creating a market," but rather finding the next layer of infrastructure and growth opportunities after the market has been validated. This is highly effective for exchange-backed capital: Binance possesses a massive user base, liquidity, and entrepreneur network, while YZi Labs can quickly capture trends and leverage existing resources to help projects grow. However, this also limits its capabilities. One of the rarest abilities of top VCs is identifying opportunities before market consensus is formed. In contrast, YZi Labs excels at quickly betting on trends after they emerge and further amplifying certainty using its ecosystem resources. Therefore, the problem isn't that it "missed out on Polymarket, Kalshi, or payment star projects," but rather that it often only makes larger-scale deployments after consensus has been formed. Sometimes, rushing to "follow the trend" can inadvertently lead to serious mistakes. For example, in July 2025, facing the booming wave of crypto treasury company IPOs, YZi Labs publicly announced its support for 10X Capital's BNB Treasury Company project, planning to list on Nasdaq through a reverse merger with CEA Industries, creating a publicly traded asset for direct allocation of BNB assets in the US stock market. The two parties signed an agreement whereby 10X would act as the BNC asset manager to implement the BNB Treasury strategy, and YZi Labs, as the main investor, would provide approximately $100 million and corresponding ecosystem support. However, six months later, YZi Labs publicly accused 10X Capital of mismanagement, delayed information disclosure, and governance deficiencies, and threatened to abandon its promised BNB vault strategy and instead invest in other crypto assets (such as SOL), a move that was seriously inconsistent with its strategic statements during the PIPE funding round in July. The two sides then engaged in a protracted dispute for several months, with no public resolution to date. II. Limitations Arising from Team Characteristics A VC firm's investment style is essentially a reflection of the core team's understanding and aesthetics. For YZi Labs, its investment style is also reflected in the characteristics of its team. YZi's core team is highly homogeneous: Chinese, graduates from prestigious universities, and those with backgrounds in traditional finance or consulting who have entered the crypto space. Ella Zhang comes from KPCB and Stanford; publicly available information on investment partners and directors includes numerous resumes from Goldman Sachs, Barclays, consulting firms, and Stanford Business School; recent additions such as Haley Huang and Ricky Wang also primarily come from exchange growth, Asian Web3 projects, and networks of Chinese founders. This configuration excels at: understanding business plans, handling cross-border transaction documents, quickly conducting due diligence within Asian founder circles, and connecting projects to BNB or Binance resource interfaces. It also excels at things that are equally unclear. The reach of founders in Europe and America tends to be relatively short. Prediction markets, compliant payments, and companies engaging in US regulatory arbitrage typically operate within the early circles of New York, Chicago, London, and the Bay Area. Information flow relies on the same group of angel investors, law firms, and congressional lobbying connections. YZi might be able to squeeze in later rounds with money, but he's unlikely to be the first person these founders call. Companies like Rain and Kalshi need more than just capital; they need partners who can translate for them in Washington and on Wall Street. On-chain product intuition is also weak. The aesthetic honed by TradFi tends to overestimate "licenses, channels, and brands" while underestimating "whether the mechanism can survive in a public mempool." This results in a portfolio with many seemingly correct infrastructures but few bizarre products that seamlessly integrate trading, social interaction, speculation, and financial primitives. Polymarket in its early days didn't resemble a polished financial institution business plan; it was more like a market growing wildly in the cracks of regulation. Missing out on it wasn't necessarily due to insufficient research, but rather because you didn't like what you saw. Externally, YZi rarely produces consistently insightful research. a16z crypto, Pantera, and Variant use research as a tool to expand influence; YZi is more like an execution-oriented organization—issuing announcements, setting up offices, writing checks, and adding names to lists. In the primary market, silent buyers gradually become buyers who "have money but no opinions." Founders can take its money, but they won't use its judgments as a compass. Since 2025, Changpeng Zhao has replaced He Yi as one of YZi's most important decision-makers, and he also rarely speaks publicly about investments. Furthermore, Changpeng Zhao frankly stated that the company only began using on-chain AMM products and perpetual contract products in 2025, reflecting that its long-term reliance on the successful path of CEXs has become a burden in the new cycle. These limitations in vision and understanding will inevitably constrain YZi Labs' investment performance to a great extent. III. Conclusion YZi Labs currently does not lack funds, projects, or ecosystem resources. On the contrary, it possesses many advantages that are difficult for ordinary VCs to replicate: billions of dollars in assets under management, a vast investment portfolio, the BNB Chain ecosystem, and Binance's long-accumulated global network. However, these are more of an advantage of scale. What it truly needs to build is a cognitive advantage independent of Binance. Therefore, what's truly worth observing in the next phase for YZi Labs isn't how many companies it can invest in each year, nor how many of those projects will eventually land on Binance, but rather its ability to place bets before the market reaches a consensus. In the past, YZi Labs excelled at amplifying opportunities after trends emerged; in the future, it needs to prove it can see opportunities before trends appear. EASY Residency is becoming a crucial tool for this transformation. If YZi Labs can continue to identify companies that weren't popular at the time but will become core infrastructure for new sectors a few years later, then it will have truly completed its transformation from a "Binance ecosystem capital" to a "top-tier independent VC." If YZi Labs still has dreams, it must complete this transformation. Otherwise, it will remain a very powerful capital institution, but this power will come more from its platform and ecosystem than from unique investment judgment.