Deng Tong, Jinse Finance
In 2025, AI Agents and stablecoins have sparked widespread discussion, and recent fluctuations in the crypto market have again drawn widespread attention. To this end, Jinse Finance invited Han Feng, an independent researcher at Harvard University, a corresponding member of the National Academy of AI, and the first angel investor of ELA, for an exclusive interview. Han Feng discussed the differences between this crypto cycle and previous ones, which sector's crypto narrative will explode in the future, discussed market trends, and introduced the Bitcoin stablecoin BTCD.
Han Feng pointed out:
This cycle is substantially different from previous cycles. BTC has truly entered the ranks of mainstream assets, showing the rise and fall patterns of mainstream assets.
I am more optimistic about the future narrative of AI Agents. Only when crypto assets are combined with AI intelligent agents will they truly realize the value that the economy created by Satoshi Nakamoto should have.
A true stablecoin should be like BTC, independent of the traditional financial system.
I don't think the crypto market has turned bearish. I believe the more chaotic the situation, the greater the development potential for digital assets, represented by BTC.
Golden Finance: As a crypto OG with many years of experience, you've also experienced multiple crypto cycles. What's your biggest takeaway from this cycle?
Han Feng:This cycle is substantially different from previous cycles. First, this bull market was driven by the entry of large US funds. Previous bull-bear market transitions stemmed from internal crypto market dynamics, directly related to large-scale retail investor liquidity: increased liquidity meant a bull market, with various assets rising. Especially in 2017, even various worthless tokens were rising. However, liquidity can dry up due to industry-wide collapses. For example, the theft of approximately 850,000 BTC from Mt.gox in 2014; the FTX collapse in 2022, directly shaking market confidence, and liquidity depletion led to a bear market.
The starting point of this bull market was the approval of the BTC ETF.
Subsequently, Trump returned to the White House and introduced a series of policies, providing sustained momentum for this bull market. The entry of mainstream financial forces into the crypto space is an undeniable fact, and their entry has prevented BTC from experiencing wild price swings. Even with the recent overall market downturn, BTC has only fallen by about 20%, whereas previously the drop might have been as high as 50%. Perhaps in another 40 days, BTC could reach a new all-time high. While BTC is not yet as stable as gold, it is much more stable than before. Secondly, the factors determining this bull market are much more complex than before. Previously, it was only necessary to look at the liquidity of the crypto market, but now it is necessary to pay attention to the Federal Reserve's attitude towards crypto assets; the attitudes of listed companies and mainstream funds towards crypto assets; and even international situations. BTC has truly entered the ranks of mainstream assets, exhibiting the price fluctuation patterns of mainstream assets. Therefore, I believe this bull market will be relatively long, and the bear market will arrive relatively slowly; crypto assets have entered a completely new stage of development. Jinse Finance: Crypto narratives are constantly changing, from ICOs, ETH Killers, DeFi, GameFi, Memecoins, L2, BTCFi, stablecoins, RWA, DAT, and many others, many of which have been proven false. What are your views on these various crypto narratives? Which ones are you optimistic about? Han Feng: The crypto world has had meme attributes since its inception. Take BTC as an example: traditional investors generally considered it a Ponzi scheme with no real value to back it up. In the early days of the crypto world, liquidity and market sentiment were the main factors influencing prices. This explains why investors flocked to many projects even if they were false propositions. But now, BTC has entered the US national strategic asset reserve level, completely emerging from its primitive era. Although many propositions in the industry have had meme attributes, the practical experience is extremely valuable. I am more optimistic about the future narrative of AI Agents and believe that future AI will have self-awareness. Several years from now, the behavior of AI may not necessarily be controlled by humans, but it will certainly be open and transparent. We can view BTC as a simple example of an intelligent agent economy. The BTC network itself relies on BTC to purchase computing power, miners' bookkeeping, and the overall operation and maintenance of the network. This gives the BTC network features such as tamper resistance. Although the BTC network consumes more energy than many countries and has been criticized, it has created over $2 trillion in value, exceeding the GDP of most countries globally. Clearly, it has even greater potential for growth. A fraud-free, automatically operating, and highly efficient economy will eventually surpass humanity's current GDP of $105 trillion. Satoshi Nakamoto's Bitcoin white paper explains how to create a globally free economic model. Only when combined with AI intelligent agents will the true value of the economy created by Satoshi Nakamoto be realized. Although it is still under development and has experienced failures, it will ultimately succeed. This is my most basic view on the future development prospects of the crypto field. Our BTC-based stablecoin issued at Harvard will further provide the foundation for the large-scale development of the AI intelligent agent economy. Golden Finance: You recently proposed the Bitcoin stablecoin BTCD. Could you explain its specific mechanisms and use cases? How is it different from common stablecoins like USDT? Han Feng: USDT was created to allow liquidity in the cryptocurrency market to be directly reflected on the blockchain. Currently, liquidity on major exchanges is mainly reflected in traditional stablecoins like USDT and USDC. Therefore, the advent of stablecoins is extremely significant for the entire crypto industry. However, the revolution sparked by USDT and USDC only scratches the surface. In fact, compared to traditional currencies, there is no technological innovation, only conceptual innovation. According to Satoshi Nakamoto's fundamentalism, a true stablecoin should be like BTC, independent of the traditional financial system. This idea I proposed received widespread recognition from Harvard, leading to a project incubation application at the Harvard Innovation Center, initiating the exploration of NBW (New Bretton Woods). Under the original Bretton Woods system, the US dollar was pegged to gold, which can be understood as the US dollar being the earliest stablecoin of gold. The US dollar made significant contributions to the first round of trade globalization, and its strong performance led everyone to trust the dollar. However, in 1971, the two were decoupled, which later led to a global debt crisis. The new Bretton Woods system we proposed is a free global monetary system pegged to true hard currency, with no arbitrary over-issuance. We unanimously believe that BTC is the only choice. It is clearly no longer just a financial experiment; its size is already larger than most listed companies and countries, and its future development prospects will surpass gold, becoming a hard currency. Stablecoins based on BTC are completely decentralized financial assets that do not rely on the existing banking system. There are several challenges: First, the BTC mainnet lacks smart contracts. Stablecoins, including MakerDAO's DAI, Circle's USDC, and Tether's USDT, all require smart contracts. In 2023, we hoped to build a Layer 2 on BTC, that is, to implement smart contracts through BTC Layer 2, but it seemed very difficult because BTC and ETH smart contracts are incompatible. Therefore, starting last year, we decided to abandon the concept of smart contracts and focus primarily on the BTC mainnet. We observed that the BTC mainnet has timestamps, allowing BTC to be locked. This creates a prerequisite for pegging. Therefore, we first had BTC locked on the mainnet via a protocol, and then used zero-knowledge proofs to demonstrate the locked state to other on-chain smart contracts, equivalent to pledging assets in other contracts. Secondly, stablecoins issued through smart contracts, similar to MakerDAO, all have liquidation mechanisms. MakerDAO was the first to implement this; its logic is simple: once the cryptocurrency falls below a certain price, a brute-force liquidation mechanism is triggered. Although its stablecoin was eventually accepted, the brute-force liquidation mechanism is extremely user-unfriendly. Furthermore, because the BTC mainnet lacks smart contracts, brute-force liquidation is impossible. Therefore, when designing BTCD, I was the first to propose abandoning the concept of brute-force liquidation. As an alternative to the liquidation mechanism, we proposed the idea of buying hedging contracts in advance. Based on our observations, BTC has not experienced a 50% drop within 90 days in the past three years. With the BTC price now relatively stable, I buy 50% of the options, collecting a 1%-2% insurance premium upfront. Even if BTC were to halve in value, I could still profit from the hedged BTC futures securities. This can replace traditional violent liquidation methods. If a de-pegging occurs, this money can be used to repurchase stablecoins. Under this concept, we use BTC futures to replace the violent liquidation mechanism. After the massive crash of October 11th, BTCD is still operating smoothly. Golden Finance: Since October 11th, the crypto market has been continuously declining, and many people believe that the crypto market has turned bearish. What is your opinion as an OG? Han Feng: I don't think the crypto market has turned bearish. If judged by traditional crypto indicators, a liquidity crunch will lead to a bear market, and it does seem like we are entering a bear market now. But now we need to consider not only crypto liquidity and market sentiment, but also international situations and other issues. The reason for this round of decline in the crypto market is the chaotic international situation. I believe the more chaotic the situation, the greater the development space for digital assets represented by BTC. Jinse Finance: Besides narrative and technology-driven factors, the crypto market is also affected by macroeconomic factors such as regulation and the Federal Reserve's monetary policy. What are your views on the current global regulatory environment and macroeconomic factors? Han Feng: Due to the entry of mainstream funds, events such as the Federal Reserve's interest rate cuts will have an increasingly significant impact on the crypto market. Although regulations in some regions remain very strict, "the green hills cannot block the eastward flow of the river." In the current chaotic international situation, stablecoins issued based on BTC will play an important role: traditional USDC and USDT are based on the US dollar, and once the US launches financial sanctions, they cannot be used normally, but stablecoins based on BTC can be unrestricted.
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