BBW25 - Day 1 - Fireside Chat: Derek Yoo, CEO, Moonsong Labs

Thank you for inviting me here. I don't get up to Boston too much, but it's home for you, right, Derek?

It's been for a while. I'm not born here, but I've been here quite some time.

Yeah.

25 years, I think.

25 years. You've been This is actually where I wanted to start. So, perfect segue. You've been in the Boston tech scene. You've been building companies in and around the Boston tech scene, I think, since early 2000, right?

But you didn't start in crypto. You kind of started just in the I say trad is that a term? walk us through where you started and how you got into crypto.

Yes, I've been building software companies in Boston like my whole career. So that is since the late 90s. Um you know notably the Boston company people may know as a company called Fuse. I was one of the co-founders there that built up to be a you know pretty significant size company in the you know in the Boston area.

Is that a cloud communication

cloud cloud communication? So you know mostly like not blockchain like you know for most of my career but obviously starting in 2019 uh in the blockchain space um you know was founder of a project called Moon Beam uh which is a uh you know EVM compatible parachchain deployed on the polka dot network and uh from there you know a lot of other web3 related initiatives um that I've been working on.

Cool. When you think about web two and obviously working in constructing web 3 infrastructure now what are the biggest differences and I guess what are some of the can you bring initiatives that you learn from web 2 into building web 3 infrastructure there are anything that you can learn and sort of translate does anything translate

yeah of course of course I mean and it's changed over time right I mean I was reflecting on this earlier that you know we're in a moment now where I think a lot of just traditional company building ideas and and um kind of requirements are coming to the four again, right? But uh you know when it comes to basics of company building of you know having a you know doing a great job recruiting um you know in web 3 is always tended towards this tech heavy focus but I think we're in a moment now where that's shifting back people understand that you know you need to have a great company you know it's not enough to have just tech right you need you know great marketing great go to market and BD and so I think a lot of those lessons are ones that were quite helpful you know having been like a previous tech entrepreneur coming into web 3 you know to kind of have that that kind of outlook versus this hey build the tech and you know people will come.

Yeah. And then from comms or I guess like techcoms, how did you get into crypto specifically? I believe that you're a partner at Fuse was an early starter in Algarand. Am I correct?

That's right. So yeah, my co-ounder

you got the bug.

Yeah. So my co-founder from from uh Fuse, a guy named Steve Cookinos. Um uh so worked with him for many years and then he left to become the um the CEO of the original CEO of the uh the project Algarand which is one of the you know big Boston blockchain projects L1 and uh you know that's really what what got me interested initially. So that was back in 2018 or so is when that was happening 2017 2018

and then you started Moon Beam. Uh yeah so uh basically started working on the project Moon Beam and uh obviously that was a um you know diving into the pool like both you know both feet first because that was a L1 blockchain um you know uh building an Ethereum like implementation like using a novel technology substrate um uh you know you know then all the things that go along with like creating a project right so that's building a community understanding all these DeFi and other use cases and um you know there's quite quite a bit of like learning happened in that through that process And from a founders's perspective, when you're building these web3 infrastructures, what makes uh what makes a interface usable but also actually enjoyable for a user to use, right? I mean, I think a lot of the problem in web 3 has been sort of these user interface and how it's a bit clunky, maybe a little bit just difficult to to get comfortable with. How do you go about, you know, especially as someone who's who's been at the forefront of this, but also someone who, you know, comes from a tech background, who has seen, you know, the beginning and the end of this Yeah, I think it's a good question because usability I would say is is at the heart of adoption, right? People are always saying, "Well, I need more users.

Like, how do I get more users?" And a lot of it does come down to the UX and usability you're able to offer. And I think there's been, you know, historically a pretty big tension point in building web 3 products where kind of decentralization and usability can, you know, are sometimes like at odds with each other, right? So, you have a choice in the road. You're like, "Okay, well, if I do this, this is kind of making it maximally decentralized."

But maybe there's a trade-off against like usability. And I think you see it right in this in our space. It tends to be that the centralized products are the ones that like have the most users in them, right? Because they are able to offer the best user experience. I think that's changing now though, right?

Where, you know, we're in an interesting moment now where, you know, I think people are adopting a more pragmatic mindset, right? So um you know even if you have let's say a protocol you're building I think people are much more willing these days to say hey you know let's maybe we can it's okay to be a little bit hybrid state like maybe there's certain components that are centralized but so yes while there's some trust assumptions there if we're able to make like a vastly better user experience well that's worth it and uh you know I think of example like hyperlquid for example right like it could fall into this category um so I mean to me that's like progress that like people are having this much more pragmatic mindset and not saying, hey, like we, you know, it's kind of all or nothing. We either are decentralized or not at all and you know, like and we're going to live or die on that hill. Um, you know, that's not that helpful when you're trying to just get users, right? And many of whom don't really care that much about the degree of decentralization that's in the underlying platform.

And so just having this pragmatic mindset, you know, and that's lessons that that um, you know, were very important for me in like building products in the regular web two space is, you know, just the attention and detail that goes into, you know, building a great user experience that takes like a, you know, takes a lot of energy and effort. And so, um, you know, if you're going to make a product that's competitive like with, you know, these other centralized solutions, you have to have that kind of mindset. And I I just don't think in general users aren't like that willing to give up on usability, you know, for these principles, you know, like like decentralization.

So, you know, we're this pragmatic mindset these days, I think, is actually healthy and a good thing.

Um, what applications would you say have really good usability right now? I guess aside from pragmatic approach of Hyperlid that you just mentioned, what would you say?

Yeah, I mean, if I think about it, it's it's not it's UX, but it's also feature sets, right? So I mean just from the news in the last week you know you have um this announcement of tempo right the the new kind of um L1 um you know Stripe and Paradigm are working on it and they were just uh tweeting about some of the features there and you can see that some of the features are you know they are not the features necessarily that like if you were kind of a decentralization maximalist like you would be you would be talking about right but they're pragmatic so it's things like um you know how do I prioritize payments so they don't get swamped by um you know other like other use cases like on the chain right this noisy neighbors problem um how can I like offer compliance features right like um you know for example if like accounts need to be frozen or maybe like roll backs have to happen and so this to me is again a sign that you know we're entering into like a more mature stage where you know there's just practical you know there's practical requirements that these big companies have that they're just not going to use the technology unless they can like meet those requirements

and so um yeah to me I I know it's it tends to it can be a divisive point because people are saying hey like I got into the space for different reasons that this doesn't feel good but I think this is what adoption looks like right I mean you know this is what like making mainstream products looks like and you have to be able to meet these requirements to you know get these big players to move and so

that's a great point I wanted to bring up actually later in the conversation but let's do it now crypto has it matured I mean you've been in the space a long time now I think Congress has been making some laws Right. We've seen the Trump administration warm to the sector. I think it is, you know, the SEC now has has sort of taken on the approach that okay, crypto is good. It's not this pariah. It's not this pariah sector anymore.

AI is also a complement to crypto. Um, you know, do you think it's mature enough where, you know, we can perhaps integrate this into the wider financial system now and it's it's grown up enough where, you know, maybe we're past all those scandals of FTX and three arrows and, you know, everything that we saw in the crypto winner of 2022, you know, are we are we past that?

Well, I think I think so. I would say so. I mean, for for me, um, the moment we're in now, obviously there's a lot of interest and traction at this intersection of Tradfi and Web 3. Um I you know I I see that again as like a like a healthy thing. Um you know practic this mindset of practicality.

What do I need to do to build a product that is you know as good or better than existing alternatives out there? Um you know these are all like signs of maturation to me. The fact that these big players with big distribution channels are coming in you know that's going to open the door to you know large larger numbers of users coming into the space. uh you know when you have someone like a Robin Hood that's building a chain you know that is like inherently different than like a startup like a you know web3 native startup uh they have like a very large user base so does stripe so do you know a lot of the other players that are coming in and um you know in fact I think for Boston this is like a good thing for you Boston is well positioned for this kind of thing given like you know its roots having a lot of these traditional companies that have been um web three oriented for a long time

like a fidelity like a state

like a fidelity right yeah I mean I talked to a guy from Fidelity who was talking about how you know you could you pay in Bitcoin in their cafeteria like 10 years ago, right? So, this is like they've been like on this for a long time.

Yeah. From a founders perspective, from your personal perspective, how has anything changed, you know, in your business? Have you had any conversations with the SEC? Has anything changed in the last year um at Moonong?

Yeah, I mean I mean on on the the you know, kind of the regulatory like landscape and the changes there. I mean, the thing that I think is most important is that you know, kind of the signal that like hey, it's okay to be a web 3 founder, right? I mean for a long time if you're a US person building a web3 project I think you know given some of the events you're talking about that became you know that's not something you would even like mention or talk about right and so I think what it led to is basically a der of like good quality founders that were you know US-based which is weird because you look at other tech sectors other you know other areas other other software areas it's dominated by US founders and so um yeah I think that that makes me bullish for the future I mean if you looked at like for example electric capital had a report from last that was um mapping out where founders were from that were starting web three projects and the majority was from like Europe or Asia you know that's not like normal right like I would say that in most other cases it would be led by like North America and by American entrepreneurs so I think that you know it takes time though right so like kind of the you lift the veil new founders come up with ideas they realize hey like web 3 makes sense as a technology to use in my solution and uh I expect that that's like happening now right there's like you know more US based founders that are doing that now. So, we'll see that like as a as a tailwind um you know going into next year.

Do you think Wall Street is going to pull that slowness of crypto, you know, crypto kind of lagging in the US, do you think Wall Street's going to kind of pull that into the future a little bit, maybe pull it up into, you know, the same level of Europe and Asia?

I mean, I just think that where, you know, when when the opportunity is there, like, you know, we're enterprising people, right? there'll be there'll be founders that will step in to like to to fill that and it's being you can see now all the activity that's happening you know that the opportunities there I think people are realizing again from this pragmatic mindset like where is it that web 3 makes sense where is it that like I can apply this technology in a way that makes for a better product obviously like right now stable coins would be like one area where I think that that's like pretty much conventional wisdom now even if you go into the you know the IT departments or the strategy departments of these big banks and other other places it's just like you know it's it's objectively um you know compared to like legacy tech stacks for a lot of reasons.

And then in Boston specifically did you see any exiting of founders or you know um web3 builders here or was it largely sort of okay we're going to build we're just going to build quietly?

I guess you know Boston has been you know perhaps influenced by like the the financial institutions that have been here so it's had this institutional bent always.

Yeah.

Kind of a shield.

Yeah. there there are some you know there there obviously are like teams you know a lot of them coming out of like the universities that we have here but you probably less than like you know New York or San Francisco but um but yeah you know it's like I think there is like a there is a scene here there are definitely like other um you know L1 L2 founders like or like you know protocol founders that I know that are in the area you know but I would say that it's you know obviously this institutional kind of like vibe is is a little bit of the scene here.

Yeah. All right let's switch gears. I want to get into sort of the venture side of your uh of your life as well. You've built a lot of companies, but you've also had a hand in in building up a lot of companies as well. What goes into those decisions for you personally when you see a company and you think, okay, yes, this is a company I want to incubate and see through until the end.

I guess maybe two things that you say, you know, this is why.

I'll answer two ways. I mean, one are kind of the obvious answers that's true of any company building, right? I mean you need to have you know a great like market like uh you know assemble a great team and other things but there are some web three specific things you know I'd mention yeah

um and actually before I go there I mean I would say that this you know this advice I often give is around you know making sure to start with like the customer and work your way backwards right so there's a lot of enthusiastic web three founders I talk to or help advise you know many of them are often starting with the tech first and saying hey there's this you know this ZK technology is amazing like I'm going to build this like this tech but you know, in my experience, it's much much better if you start with like the the customer and what problem they're having first and work your way backwards to the tech solution. And so that's you know, a frequent point of advice that I'm um giving like, you know, younger founders or like people starting uh starting new things. Um yeah, I'd say in web 3 though, you know, the question that we've often been asking ourselves at Moonong since we're one of the things we do is we're a venture studio, you know, helping launch uh projects like you know, incubating and helping launch projects. You know, the question is like where does web 3 make sense, right? And you know, often it's kind of shoehorned in, you know, maybe you know there's interest in, hey, let's launch a token, let's shoehorn this thing in, but it doesn't act like really make sense.

And uh you know I think the market's in a state now where that's going to quickly get like flushed out, right? You're not going to make it very far if it isn't like truly making sense. You're not actually getting like real customer traction. It's organic. You know, that's there's only so far that that like will take you these days.

And you know, there's a few patterns that we've found that I think are are relevant. Obviously, there's this payments area. That's one thing, but like you know, multi-sided marketplaces. So using web 3 as a kind of coordination mechanism to match two sides of the market. I think that's another idea that's quite solid.

If you think of DPIN is effectively like that formulation of web 3 um and uh you know kind of this idea of uh like verifiability right so being able to you know publicly verify different kinds of actions you know that's you know we'll talk about it later I think but in in the realm of AI I think that's that's a pretty fruitful area of research for us right now.

Yeah let's go to AI. I think for at least this past year, maybe even two, you know, AI and the intersection of blockchain was this big buzzword, right? Do you still feel like it's that way? Was it maybe overhyped for a little bit? Is it still that way?

Yeah, I mean, you know, kind of this first wave of like influencer agents, I would say, you know, in some ways was overhyped and then like, you know, and then fell out of favor. But I mean, to me, so just for context, like, you know, we have an AI an AI lab at Moonong. We've been spending quite a bit of time um working in the AI sector. uh you know learning that that set of like tools and skills to be able to apply to new ventures. Um and look I mean AI agents like you know they are going to change like the way things work.

They already are changing the way we operate. So even the software development we do is now heavily like using AI agents you know to automate like many different things that used to be manual. And uh I would say we're at a moment right now where a lot of that experimentation automation is happening internally in companies but it's soon going to evolve to the point where you know there is like external like interactions between companies um you know between AI agents and that you know that's I think an exciting opportunity that's a place where you know blockchain like you know actually has like some really cool things to offer um because when you're you know if you're inside of a company well you can trust kind of like you know the actions of the agents that are also agents that are working for you right directly working for It becomes different when you're, you know, not in control of the agents, right? And you're interacting with, you know, other agents that are over the internet. You know, then that's like a different kind of mindset, right?

That's more of like a, you know, business mindset of, hey, I'm taking on a new partner. Does this make sense? You know, you normally be in a, you know, contract contracting with them. Hey, I want to like mitigate my risks. You know, it's a different set of considerations there.

So, do you see a future where AI is like AI is building its own blockchain or is it always going to be sort of AI built on top of blockchains.

Yeah. I mean, you know,

I feel like there's endless possibilities, right? When it comes to AI, you can think of anything really.

They're complimentary technologies, but you know, to to put kind of like AI computation directly on a blockchain like doesn't work for a lot of reasons, right? It's very computationally expensive. You know, blockchains are like quite, you know, they have a lot of great features, but you know, computational throughput is like not one of those features. So, they're quite slow.

So, you know, the idea is to find like, you know, complimentary like ways that those two technologies can work together. So as an example um you know I think uh it was mentioned before here on one of the previous talks um you know this area of like employing AI agents to kind of be your agent to perform onchain actions. You know that's a pretty fruitful area. So like we you know are working with a number of different like customers pursuing um you know projects in this area. you know there's a lot of D5 um oriented agents these days right and the idea is pretty simple of hey like instead of a human interacting directly with these complex D5 protocols you know let's create an agent that understands how to interact with those DeFi protocols and now as a user I can interact with the agent in a much simpler way right I say hey here's like the goal I have here is the kinds of outcomes I want here's my risk tolerances and the agent will translate those like highle intents into like lowlevel actions on the blockchain so you're kind of using the AI an abstraction layer um to make it easier to work with blockchains.

And kind of almost circling back to the point about how do you make the usability better? AI is like one way to do that.

Out of all your venture projects that you invest in right now, how what percentage of them would you say is are focused on AI?

Pretty much pretty much all of them. Yeah. Yeah. I mean pretty much all of them. So I mean the things that we spend a lot of time thinking about are you know what kinds of like decentralized infrastructure are genuinely useful um to agents and you know on the forward vision of something I've heard people um call the agent economy right so it's like once there's you know agents that are interacting with each other across the internet across like company boundaries you know I'm a firm believer that's going to be a massive massive market right a lot of e economic activity is going to move to that model and uh yeah so the question is then what kinds of infrastructure do those agents need?

I think that's like a very very big opportunity.

It's mind-blowing.

It's happening now, right? It's not happening very quickly. So,

it's wild. Um, I want to switch gears as well to talk about, you know, what's going on with um, interoperability on chain because with Moon Beam, that was kind of the reason you launched Moon Beam, right, was to to be able to go between chains um, and have EVM have an EVM compatible chain on Poly Market. I think for, you know, a long time the mantra in crypto was like the future is interoperability. Do you still see that as the future? Is the future still multi-chain?

Um, even though we talked about this before going on stage, there is some consolidation going on.

Yeah.

What's your thought?

Yeah, it's I kind of answer that question as both yes and no. So the nuance is this that I there's obvious there's really like strong consolidation happening now. I think of it in terms of not just chains but of tech stacks, right? So when it comes to tech stacks and by tech stack I mean things like the EVM tech stack that you you know that was born on Ethereum mainet. Um and let's say take Salana, right?

Salana's SCM, you know, model. Uh those are tech stacks. There's major consolidation already that's like happening, right? So it's I would say that people are generally choosing either EVM or Salana. I would say like you know that's the majority of like new projects you're going to have this choice with larger projects choosing both and saying hey I want to cover both markets.

I mean to me that that's you know that rhymes with a lot of like the history of technology right there's only so many tech platforms that a given market will support. So if you look at mobile for example, you know there was once many platforms you know now there's effectively two and you know the reason is simple that if you're like a vendor trying to support uh you know users on a mobile platform there's only so many platforms you can support right I mean I think two is pretty much the limit of like where it's reasonable to ask a company to you know create two versions of their software and so same thing you know playing out like here in the you know in the blockchain space where I think it's already it's it's already kind of clear to me that it's EVM and SCM you know are are effectively the two platforms now the newance is within that though obviously like EVM is not just one chain there's many many chains that are implementing the EVM and uh you can see from these recent announcements we just talked about that you know a lot of these new players want to control you know the tech st you know their deployment like end to end so they're either launching L1's in some cases not even L2s um but like so I think that's going to continue but like you know with this like EVM programming model you know it's very very difficult to launch a new tech stack that has like a whole ecosystem of dev tools and other things around it so you know I think I think chip is kind of sailed at this point and you know you're looking at at least these two as the as the main tech stacks out there.

I was listening to you on a podcast actually with uh the Wolf of All Streets in 2022 so three years ago now and uh I remember he said I don't think interoperability is is all there yet and you said that's a fair assessment. Um you guys were talking about how at the time obviously this was around you know FTX time and crypto winter but uh he was characterizing you know the interoperability for a bunch of the security lapses that we've been seeing at the time. Do you think those are for the most part getting fixed? Are we seeing security lapses around interoperability and or is it a little bit better these days? I mean from my perspective actually like the the number of like security incidents and like on on smart contract levels have gotten like dramatically better.

So I think that's a result of you know better tools better like you know experience like from the developer side like more mature auditing like you know like ecosystems um you know it's not to say they don't happen but there you know the frequency with which those are happening is definitely less um you know demonstrabably like you know if you compare now versus three four years ago but yeah on this crosschain thing like so I think the reality is you know we're going to be and continue to be in like there's going to be ever more chains even if they're you know consolidated from a tech tech stack perspective Ive um and the question is okay like what does that mean for the user experience and here like you know I'd say you take AI agents right so one vector I see for creating abstraction is you know in so far as you're delegating like what you want to do to an AI agent you know it can in turn connect to many different blockchains to satisfy that request so that's like you know a vector where you're kind of you know you're creating a crosschain like scenario or you're kind of abstracting away like crosschain complexities you're doing so through an AI agent And there is some trust assumption happening there, but that's a very likely path, you know, that that I see that I see like to get traction move forward given the utility like of these agents, right, and how much they're able to do.

Do you think that might contribute to maybe one day in the future we just aren't going to really know what chain we're interacting on and transacting on? It might just kind of blend maybe sort of like cloud infrastructure these days. It kind of just all becomes gravy at the end of the day.

Yeah, potentially. I mean, I think the trick is that, you know, is like the security trust assumptions tend to not be the same across different chains or even across, you know, even if you're on Ethereum in Ethereum, you know, different L2s have different security assumptions. So, you know, that's the trick where they're not all the same. So, thus, if you're executing different kinds of crosschain actions, you know, you get a different risk profile. You have to kind of sum the risks across the different hops that you're doing.

But on the other hand, I think this is the kind of task that AI agents are pretty good at, right? So if it understands kind of the the landscape the risk landscape you know it can kind of have an internal risk module that's like computing kind of the level of risk you know across these different moves and so um yeah that's that's an area that I think you know that and that ties in with work we're doing these days um you know on AI agents as they get more sophisticated in kind of factoring in more you know more dimensions into their analysis.

So you're bullish on AI where we are in the AI cycle right now. I mean, it's hard to find someone where they're not like starting to use these tools more and more and more in their in their daily life.

Yeah.

What about web 3 in general? I mean,

it's kind of like if you were to describe web 3 like where we are, we sort of in the I guess the early phase, the midphase, the late phase.

I mean, to me, as I was mentioning at the beginning, it I think we're at like a maturation stage like right now. So, okay. you know, a lot of the early, you know, early idealism, I think, is like, you know, a little bit being challenged. You have like new players coming in that are practically minded, right? They're like, "Hey, I'm trying to build a product.

I have all these users like, you know, where is it that I could, you know, web 3 makes sense for certain use cases. Let me use that as a technology." Um, that's healthy in my mind though. Um, you know, I think that like when it comes to projects, right, there's like different kind of questions you get from VCs if you're trying to raise now, right? I mean I can tell you back in you know 2019 2020 there wasn't you know there was hey does is the team good does it make sense you know the kind of questions you get now is like okay where who are your customers like what revenue do you have like I was talking to like a founder the other day who was kind of lamenting to me it's like oh like all these like kind of pain in the ass questions I'm getting now it's like welcome to the real world this is like this is like what it's like to just build an actual product you know like and that's what the experience you'd have if you were trying to raise money to build like a company like you know some space.

So to me that's healthy that that's happening now in web 3, right? That's the bar is like raised and um that's what we need.

And what advice would you give to young builders and founders maybe who are sitting here in this audience today who want to build something like a moon beam or a moon song that you know are following the same path that you did in 2019 but obviously it's a little bit different in in 2025. What would you say to them? I I mean for me like the the principles kind of stay the same like and I mentioned I mentioned it before I mean to me like probably the most important piece of advice is you know when you're trying to figure out what to build start with like the the customer and like and understanding their problem and like work your way backwards to like what the solution needs to look like. I think just that alone like you know that's probably the most common you know kind of challenge I see is people start with tech that they're excited with which is great. I mean you want to be excited about the tech but then they're trying to like map that tech back like customers and problems sometimes more successfully sometimes not as successfully and um look I think you know you just need to start with the customer and the problem and obviously like the the market right like something that's going to be a big market it's very hard to change those things like after the fact and um you know usually the tech solution will present itself then right and

all right and I have to ask you this because this was on our like little rundown on the agenda but what does the mainstream media get wrong when it comes to blockchain And I want to ask you this because I used to be part of the mainstream media, so I find this fascinating. And if you want to bash the mainstream media, go right ahead,

but what does it get wrong still

when it decides to cover it? I guess.

That's a good question. Uh I don't know. I feel like I I don't have like I think it I mean there's still this hangover, right, from like all the you know, all the problems that happened like from, you know, 22 and and onwards. And you know, so I I use my you know, just my parents' limous test, right? They're like pretty unplugged in people when it comes to this.

and you know their memories and their takes are often just the result of you know big news items they saw from maybe years ago and uh so this is where I think in some ways making web 3 like kind of boring like is is good in a way right I mean we want it to be just like the right tool for the for the job in all these different like cases and just like using that tool more and then it becomes boring but it becomes big and like better at the same time

what news sources do you use for your crypto news curious podcast. Podcast. Yeah.

All right. That's good for me.

I'll have to start listening to yours.

There you go. All right. Give it up for Derek, everybody. Thank you so much.