Does YZi Labs have dreams?

Author: Gu Yu, ChainCatcher

On August 26, [YZi Labs](https://www.rootdata.com/zh/Investors/detail/YZi Labs?k=MjI5) announced the final shortlist for the EASY Residency in the fourth quarter, with 24 early-stage projects eligible for a maximum investment of $500,000 each, totaling approximately $12 million for the quarter.

From the perspective of project direction, this batch of investments is clearly different from the traditional impression of YZi Labs. The 24 projects focus on stablecoin payments, cross-border settlements, on-chain foreign exchange, credit, digital banking, institutional liquidity, AI agents, on-chain asset management, and more. YZi Labs even directly listed "global payments" as a key investment theme for this season.

In the context of a highly concentrated crypto primary market and a challenging financing environment for early-stage projects, the continuous hosting of the Residency and substantial investments in numerous early teams undoubtedly sends a positive signal to entrepreneurs.

However, for YZi Labs, the question may not be "whether to invest," but rather a more difficult question: as an investment institution managing over $1 billion, backed by the founder of Binance and possessing global exchange-level resources, does YZi Labs truly qualify as a top-tier VC?

Looking solely at the number of investments, the answer seems straightforward. According to RootData, YZi Labs made 34 investment rounds in the past year, second only to Coinbase Ventures. But if the criteria shift from "how much was invested" to "what was invested, why it was successful, and whether it can define the next round of industry opportunities," YZi Labs' answer becomes less impressive.

Source: RootData

Focusing on the hottest prediction markets and payment sectors in the past year, apart from a few BNB Chain ecosystem projects, YZi Labs has virtually nothing to show in these two areas, missing out on track stars like Polymarket, Kalshi, Rain, KAST, BVNK, and RedotPay.

On the surface, it appears to be one of the most diligent buyers in the market; looking deeper, it resembles an institution that has yet to complete its self-definition—wanting to act as an independent family office while being unable to escape the gravitational pull of the Binance ecosystem, resulting in inherent deficiencies in investment style and scope.

I. Follow-on Investment and Capability Boundaries

The most unique aspect of YZi Labs has never been its capital scale (claimed to exceed $10 billion), but rather that it once had the world's largest crypto exchange as its "backing."

As a continuation of its predecessor Binance Labs, YZi Labs' early investments naturally possess some capabilities that traditional VCs find hard to replicate: the ability to connect exchange users with liquidity, participate in the ecological construction of BNB Chain, and leverage Binance's brand and global entrepreneur network to acquire projects.

Therefore, for many early-stage projects, securing investment from Binance Labs itself signifies potential liquidity, market exposure, and ecological resources.

This also explains a noteworthy statistic: RootData previously reported that out of YZi Labs' 229 investments, 154 projects issued tokens, with 150 having launched on at least one exchange, and 95 ultimately landing on Binance.

This figure certainly cannot simply prove that "investment equals token listing," nor can it be inferred that there exists a direct channel of "investment to listing," but it at least indicates a fact: a significant portion of YZi Labs' historical investment logic overlaps naturally with Binance's ecological capabilities.

This is also the biggest difference between YZi Labs and independent crypto VCs like a16z, Paradigm, and Pantera. Although in early 2025, YZi Labs transitioned to a family office, operating independently from Binance, primarily managing funds for Zhao Changpeng and a few early Binance executives, fundamentally, YZi Labs remains closely tied to Binance in terms of interests and team connections.

In fact, YZi Labs' investment style is quite distinct: it prefers projects that have demonstrated real demand, can be integrated into existing ecosystems, and can rapidly scale using platform resources.

In the past, this style was mainly reflected in investments in DeFi, trading, wallets, and infrastructure around BNB Chain; in recent years, it has expanded to stablecoin payments, RWA, prediction markets, and AI.

For example, in the payment sector, YZi Labs invested in [Better Payment Network](https://www.rootdata.com/zh/Projects/detail/Better Payment Network?k=MjE4OTE= "Payment Network") this year, betting on multi-stablecoin payments, cross-border settlements, and on-chain FX; in the prediction market sector, it entered through projects like Predict.fun and Probable. Now, EASY Residency has also listed stablecoin payments, institutional settlements, and on-chain FX as key directions.

The core of this logic is not "to create a market," but to seek the next layer of infrastructure and growth opportunities once the market has been validated.

This is very effective for exchange-backed capital: Binance has a vast user base, liquidity, and entrepreneur network, allowing YZi Labs to quickly capture trends and then utilize existing resources to help projects grow.

But this also defines its capability boundaries. One of the rarest abilities of top VCs is to discover opportunities before a market consensus forms. In contrast, YZi Labs is more adept at quickly betting once a trend emerges and further amplifying certainty using ecological resources.

Therefore, the issue is not that it "missed Polymarket, Kalshi, or payment star projects," but rather that it often makes larger-scale layouts only after consensus has formed.

Sometimes, the eagerness to "follow the trend" can lead to serious mistakes. For instance, in July 2025, facing the booming wave of crypto treasury companies going public, YZi Labs publicly announced its support for 10X Capital's BNB Treasury Company project, planning to go public via a reverse merger with CEA Industries to create a public target for direct allocation of BNB assets in the US stock market. The two parties signed an agreement for 10X to act as the asset manager for BNC, implementing the BNB treasury strategy, with YZi Labs as the main investor providing approximately $100 million and corresponding ecological support.

However, six months later, YZi Labs publicly accused 10X Capital of mismanagement, delayed information disclosure, and governance deficiencies, threatening to abandon the originally promised BNB treasury strategy and shift to investing in other crypto assets (such as SOL), which was in stark contrast to the strategic statements made during the July PIPE financing. Subsequently, both parties became embroiled in prolonged disputes, with no public resolution to date.

II. Limitations Brought by Team Characteristics

The investment style of a VC institution essentially reflects the core team's cognition and aesthetics. For YZi Labs, its investment style can similarly be reflected in the characteristics of its team.

The core team of YZi is highly homogeneous: Chinese, prestigious schools, and traditional finance or consulting entering crypto. Ella Zhang comes from KPCB and Stanford; the investment partners and directors listed in public information frequently have backgrounds from Goldman Sachs, Barclays, consulting firms, and Stanford Business School; recent additions like Haley Huang and Ricky Wang also primarily come from exchange growth, Asian Web3 projects, and the Chinese founder network.

This configuration excels at specific tasks: understanding business plans, handling cross-border transaction documents, quickly completing due diligence within the Asian founder circle, and connecting projects to BNB or Binance resource interfaces.

What it does not excel at is equally clear.

The coverage radius for European and American founders is relatively short. Prediction markets, compliant payments, and US regulatory arbitrage companies have early circles in New York, Chicago, London, and the Bay Area, with information flow relying on the same batch of angels, the same batch of law firms, and the same batch of congressional lobbying relationships. YZi can squeeze in with money in later rounds, but it is difficult to become the first call for these founders. Companies like Rain and Kalshi need not only capital but also partners who can help translate in Washington and Wall Street.

The intuition for on-chain products is also relatively weak. The aesthetics trained by TradFi tend to overestimate "licenses, channels, and brands," while underestimating "whether mechanisms can survive in the public mempool." As a result, the portfolio may contain many seemingly correct infrastructures but lacks quirky products that integrate trading, social interaction, speculation, and financial vernacular. Polymarket did not initially resemble a polished financial institution BP; it more closely resembled a market growing wildly in regulatory gaps. Missing it may not necessarily be due to insufficient research, but rather because it was seen and not liked.

Externally, YZi rarely produces sharp research continuously. a16z crypto, Pantera, and Variant treat research as a tool for expanding influence; YZi resembles an execution-oriented institution—issuing announcements, hosting residencies, signing checks, and making lists. In the primary market, silent buyers gradually become "wealthy but opinionless" buyers. Founders can take its money but will not use its judgment as a compass.

Since 2025, Zhao Changpeng has replaced He Yi as one of the most important decision-making shadows at YZi, and he too rarely speaks publicly about investments. Moreover, Zhao has openly stated that he only used on-chain AMM products and perpetual contract products for the first time in 2025, reflecting a long-term reliance on the successful path of CEX, which has now become a burden in the new cycle. These limitations in vision and cognition will inevitably significantly constrain YZi Labs' investment performance.

III. Conclusion

YZi Labs currently does not lack funds, projects, or ecological resources. On the contrary, it possesses many advantages that ordinary VCs find hard to replicate: managing assets in the tens of billions, a vast investment portfolio, the BNB Chain ecosystem, and the global network accumulated by Binance over the long term.

However, these advantages are more about scale. What it truly needs to establish is a cognitive advantage independent of Binance.

Therefore, the next phase of YZi Labs that is truly worth observing is not how many companies it can invest in within a year, nor how many of those projects ultimately land on Binance, but whether it can make early bets before market consensus forms.

In the past, YZi Labs excelled at enlarging opportunities after trends emerged; in the future, it needs to prove that it can see opportunities before trends appear.

EASY Residency is becoming an important tool for it to complete this transformation. If YZi Labs can continue to filter out those companies that are not popular at the time but become core infrastructure in new tracks years later, then it will have truly completed its transformation from "Binance ecosystem capital" to "top independent VC."

If YZi Labs still has dreams, it must complete this metamorphosis and transformation. Otherwise, it will remain a very powerful capital institution, but this power will stem more from the platform and ecosystem rather than from unique investment judgments.