Exclusive Interview with Morph CEO: Crypto Leaders Need to Stay Clear-headed, Consumer-grade Ecosystem Positioning is Irreplaceable

Author: Deep Tide TechFlow

Ethereum founder Vitalik Buterin stated in an article published in May: every Ethereum L2 has a unique "soul."

With Ethereum's upgrades significantly reducing transaction costs and the improvement of a series of open-source codes and development tools, the threshold for building an L2 has become increasingly low: according to L2beat data, the number of L2 projects has now exceeded 100+.

The surge in numbers has led to intensified competition. For L2s to stand out, finding differentiated markets to build a unique "soul" has become key. For example, Metis focuses on DAOs, Polygon seeks partnerships with mainstream companies and builds a high-quality ZK ecosystem, while Morph, which just secured $20 million in funding in March this year, is rapidly growing with its narrative of "consumer-grade L2": the number of transaction addresses exceeds 1.82 million, the number of transactions exceeds 34.65 million, contract deployments exceed 14,178, and the number of projects deployed on the testnet is 37.

As the mainnet launch approaches, we had an in-depth conversation with Morph co-founder and CEO Cecilia (Twitter: @cecilia_hsueh). As the only female CEO in the L2 space, Cecilia's insights balance macro market strategy and micro community user perspectives. When discussing Morph's core advantages, she summarized: Morph's core advantage lies in its focus on real-world consumer-grade application scenarios and a user base of 30 million, making it difficult for other ecosystems to challenge. Regarding the role of women in the Web3 industry, she candidly stated: overall, there are indeed not many female practitioners, but the inclusion of more women is a necessary process for Web3 on the road to mass adoption.

In this issue, let us follow Cecilia's insights into Morph and explore its decentralized sequencer, Morph Zoo incentive program, developer accelerator, and brand operation strategy, to uncover the intrinsic soul of Morph as a consumer-grade L2.

Key Points

• The essential difference between the role of CEO in the crypto industry and traditional industries: Success in the Web3 industry requires not only exploration but is also influenced by luck and market conditions. Accidental success can easily lead to confusion, making it crucial to have a clear understanding of one's abilities.
• As a serial entrepreneur, I always focus on three key aspects of a project: team; funding; strategy.
• The discussion about technology in the L2 space is very intense, while Morph focuses more on building a consumer-grade ecosystem, acting as a bridge between users and projects: on one hand, we have 30 million users and insights into their demand for Web3 applications in real-world consumption scenarios; on the other hand, we excel at helping projects formulate growth strategies and achieve rapid growth through user acquisition.
• As the first L2 to truly launch a decentralized sequencer, Morph's design not only avoids the significant impact of a single sequencer failure on the network but also maximizes fairness to better mitigate MEV issues.
• For consumer-grade applications, efficient deposit and withdrawal are crucial. Morph is currently in discussions with one of the top five credit card issuers in the world to use Morph as the on-chain settlement layer for their issued credit cards, thereby simplifying the way ordinary consumers enter or exit Web3 and reducing costs.
• The lazy image of koalas aligns perfectly with its positioning as a consumer-grade L2. Morph is committed to lowering the barriers to Web3, allowing users to enjoy the ecosystem without spending a lot of time learning, thanks to simple and user-friendly product design.
• For any industry, the inclusion of more female practitioners represents a more mature stage of development. Although Web3 is also showing this trend, the number of female practitioners is still low. We can enhance awareness and break biases through a series of educational and promotional activities to attract more women. The inclusion of more women is a necessary process for Web3 on the road to mass adoption.

Web3 Industry CEOs Need to Stay Clear-headed

Deep Tide TechFlow: Thank you, Cecilia, for accepting our interview. Please start with a self-introduction.

Cecilia:

Hello everyone, I am Cecilia, co-founder and CEO of Morph.

As a serial entrepreneur with ten years of experience, I joined the management consulting industry after graduating from university and founded a market consulting company at the age of 25, which later grew to be quite influential in the industry. Additionally, I co-founded a sportswear brand designed specifically for Asian women, which was also a very memorable experience for me.

I first learned about cryptocurrencies in 2017, and my initial Web3 entrepreneurial experience began in 2019 when I co-founded an exchange project as an investor and co-founder, which ranked among the top five in the world in terms of trading volume. This was a significant achievement for me in my first foray into Web3. In 2022, I chose to exit the exchange project and in 2023, I dedicated myself to founding and operating Morph.

Deep Tide TechFlow: As one of the few female CEOs in the crypto industry and the only female CEO in the L2 space, could you share your understanding and thoughts on the role of a CEO in a crypto project? What necessary accumulations do you think are required to undertake this role?

Cecilia:

I believe there are some essential differences between the role of a CEO or co-founder in the crypto industry compared to traditional industries.

Firstly, the Web3 industry is very new, and many development paths, market strategies, and even user growth are still unknown, which places higher demands on roles like CEO and founder. Although we have seen many core leaders of projects maturing in their business execution capabilities in recent years, crypto CEOs still need to possess strong abilities to explore successful paths amidst uncertainty.

The second significant difference is that success in traditional industries is mostly a gradual process, requiring a lot of groundwork and making the right choices at key points to ultimately achieve success. In contrast, success and failure in the crypto market are largely influenced by luck and market opportunities. There are many projects in the crypto market that have risen rapidly due to market opportunities, and this quick success and wealth can easily lead to confusion, making one feel overly capable, which is detrimental to the project's future sustainable development. Therefore, I believe that compared to traditional industries, leaders of crypto projects need to maintain a clear understanding of the market, the team, and their own abilities.

The third point I want to share is about the commonalities between traditional and crypto industries: before joining Web3, I had also run two or three companies, and Morph is probably my fifth entrepreneurial project. As a serial entrepreneur, I think regardless of whether in traditional or crypto industries, from the perspective of a CEO or founder, one should always focus on three key aspects: first is people, i.e., the capabilities of team members; second is funding, where the funding sources for project expansion come from; and lastly is strategy, what the overall plan for project development is.

Finally, regarding my identity as the only female CEO in the L2 space, there are indeed not many female CEOs in the crypto industry, and I feel I have somewhat filled this gap. I do not come from a technical background; my past experiences have focused more on business, while most male entrepreneurs tend to focus more on technology. As a female practitioner, I am more concerned about the market. I care about whether the product is simple enough. If we really want to achieve mass adoption of Web3, lowering the barriers is essential. Only when users do not need to spend too much effort learning the product will more incremental users enter, truly realizing the vision of "bringing the next billion users into Web3."

Deep Tide TechFlow: We noticed that you have had multiple entrepreneurial experiences in Web3, covering areas such as exchanges and DeFi, and have achieved very good results. At the same time, we also noticed that in 2023, the L2 space has already shown signs of homogenization and internal competition. Looking back at the project's founding, what prompted you to choose the L2 track for your continued entrepreneurship? Compared to other L2 projects, what refreshing changes will Morph bring to the L2 space?

Cecilia:

After exiting the exchange project in 2022, during the process of summarizing that experience and contemplating my next goals, I realized that the operation of exchanges still had a very Web2 style. The most important key performance indicator for exchanges is users, or rather, the amount of user deposits, which makes the overall operational thinking of exchanges lean more towards traditional internet platforms, just with crypto assets listed on that platform. Therefore, I do not consider exchanges to be 100% Web3 projects. So, could I do something that is more deeply rooted in the core of Web3?

Based on this thought, I found that L2 in 2022 was arguably the hottest track, but at that time, the L2 market still had many pain points:

On one hand, the narrative around L2 was more focused on technology. Major projects were comparing their technical advantages or focusing on exploring the next steps of ZK Rollup and OP Rollup, with few truly focusing on ecosystems and users. I believe that technology that no one uses cannot be called good technology. Morph's approach is somewhat contrary; we believe a more sustainable development model is to explore applications while developing technology, and then work backward from the development of applications to determine what kind of underlying infrastructure is truly needed. Once this question is clarified, what Morph needs to do is help these applications build the underlying infrastructure that is genuinely needed.

On the other hand, developers in the L2 ecosystem also face some dilemmas. Many project founders come from technical or product backgrounds, and after choosing a public chain or L2 to build on, they usually receive technical assistance and grants funding. However, they often feel lost when it comes to how to acquire users and go to market for their applications. They need a large ecosystem to help them grow.

In summary, discussions about technology in the L2 space are very intense, and almost all L2s are focusing on technology, with no one truly focusing on the L2 ecosystem, or rather, no one is really good at building the L2 ecosystem and helping projects within the ecosystem acquire users. This is one of the reasons Morph wants to build a chain: although the L2 space is competitive, our background in exchanges and wallets not only gives us a large user base but also allows us to know exactly where the users are. We can drive user acquisition for our ecosystem applications and also provide a series of support such as early-stage incubation, financing, listing, and formulating go-to-market strategies. This is Morph's biggest advantage compared to other technology-oriented public chains.

Focusing on Consumption Scenarios: Morph Brings the Next Billion Users into Web3

Deep Tide TechFlow: Many people say the L2 space is very competitive. What do you think L2 projects are competing over right now? Do you agree with the directions everyone is competing in? What is Morph's breakthrough point to escape the internal competition of L2?

Cecilia:

Regarding the competition in the L2 space, I mentioned part of it earlier. Two or three years ago, L2 was more about competing on technology, which led to many chains becoming Ghost Chains, having infrastructure but no users. In the past six months, we have also seen some L2s starting to compete in terms of TVL. I believe this is an effective way for new projects to quickly attract users when entering the market, but the downside of this approach is that the users attracted may be more focused on returns and may not become long-term participants.

For Morph, we consider the balance between the two: on one hand, as the infrastructure of the ecosystem, we cannot ignore the optimization on the technology side; on the other hand, we will also conduct a series of activities around TVL in the future, but as I mentioned earlier, we hope to attract users' attention through these activities, guiding them to focus on the project itself and discover its differentiated advantages and selling points.

In the long run, for any L2, especially for Morph, we must prioritize the long-term construction of the ecosystem as the most important focus of the project. Morph is positioned as a consumer-grade L2, and how we can truly support consumer-grade applications within the ecosystem, help them grow rapidly, and create a friendly ecosystem for ordinary users and consumers is our long-term goal.

Deep Tide TechFlow: After discussing the competition in the L2 space, let's talk about the competition among CEOs. In March of this year, Morph completed a $20 million seed and angel round of financing. There is a saying in the crypto industry: the essence of investment is investing in people. What do you think enabled you and your team to gain the favor of institutions?

Cecilia:

Yes, in March of this year, we completed a new round of financing of $20 million, which can be said to be one of the largest financings in the Web3 industry in the past few years. This was not an easy feat to accomplish. Currently, there are over 100+ projects in the L2 space; why are leading VCs still willing to invest in us? It is because they see our differentiation: Morph is not a technology-driven L2; it aims to build a large ecosystem, and within this ecosystem, we not only have users but also understand how to provide end-to-end support for projects within the ecosystem, helping them grow faster and better serve users.

Morph has nearly 30 million users, most of whom are wallet users or exchange registered users. They have a clear pain point: they already understand the concepts related to cryptocurrencies, and besides interacting with wallets or exchanges, they are also seeking real value that Web3 can bring to their everyday lives or the landing of Web3 in their daily life scenarios. However, projects in the market, such as DeFi, GameFi, NFTs, memes, and this year's trending AI, are often far removed from users' lives, and their underlying logic is complex, with high experience thresholds. Ordinary users are also reluctant to spend too much time understanding and learning.

Morph aims to be an L2 that truly brings practical application value. We see the needs of users and that there are no applications meeting those needs, so we are building a brand and technology platform as a bridge connecting users and applications: on one hand, we help applications and developers focused on consumption scenarios and committed to enhancing the Web3 experience to grow; on the other hand, we better meet users' needs for the landing of Web3 in consumption scenarios. I believe this vision and mission is something no other project in the entire L2 space is doing, and leading VCs see our positioning and resources, which is also an important reason we secured the $20 million investment.

Deep Tide TechFlow: Speaking of the project's specific technical highlights, one very prominent advantage of Morph is its decentralized sequencer design. What prompted you and your team to firmly choose the decentralized sequencer design concept from the very beginning of the project? What development momentum has this design brought to the project?

Cecilia:

Our entire architectural design revolves around the three most important dimensions of blockchain: security, decentralization, and scalability. L2 aims to solve the scalability issue, but it must also consider security and decentralization, which is why we chose to build L2 on Ethereum and adopt Ethereum's DA layer. The decentralized sequencer is a concentrated embodiment of our pursuit of decentralization. We believe that if the sequencer is centralized, it cannot be called a truly decentralized technology. Before Morph, our technical team had always wanted to create a chain with a decentralized sequencer, but for various reasons, it was not realized. Therefore, when we communicated specifically with the technical team, both sides were in complete agreement.

Currently, our decentralized sequencer has already gone live on the testnet. We understand that while many L2s have written decentralization into their roadmaps, Morph is the first L2 to truly launch a decentralized sequencer.

Regarding the problems solved by the decentralized sequencer, we can first see that L2s using a single centralized sequencer face significant impacts if that single sequencer encounters issues, which is something we do not want to see, yet it has been happening recently. Additionally, since the sequencer is responsible for transaction ordering, a decentralized sequencer can maximize fairness and effectively mitigate MEV issues. Many community members believe that Morph's decentralized sequencer has truly advanced the decentralization of Ethereum and the entire ecosystem at the technical level. When we communicate with some applications with trading attributes, the decentralized sequencer is one of the technical attributes they care about the most.

Deep Tide TechFlow: Morph has a unique positioning as a "consumer-grade L2," and achieving consumer-grade not only requires strong technical support but also needs to connect with a wide range of real-world application scenarios. Can you introduce to us why Morph can achieve "consumer-grade L2" from these two dimensions?

Cecilia:

First, I want to share about the deposit and withdrawal issues. Efficient deposit and withdrawal are very important for consumer-grade applications. Morph is currently working to establish deposit and withdrawal channels covering over 50 currencies worldwide through wallets. Additionally, we are in discussions with one of the top five credit card issuers in the world to use Morph as the on-chain settlement layer in the future. These methods aim to simplify the way ordinary consumers enter or exit Web3 and reduce costs. This is a strategic collaboration that Morph is currently promoting and is a crucial step towards achieving consumer-grade L2.

Secondly, as I mentioned earlier, Morph has a user base of 30 million, and these users already have a basic understanding of crypto and Web3 and are seeking applications of Web3 in the real world. The Morph ecosystem aims to develop consumer-grade applications, and by directing users to ecosystem projects, Morph not only meets user needs but also achieves ecosystem development, which is something other L2s cannot accomplish.

Finally, Morph's user distribution is global, with users in Asia, Europe, South America, and other regions. Many projects focus heavily on the North American market, which brings many limitations to developing consumer-grade L2: on one hand, the compliance requirements in the North American market are very strict, and the limitations on users are also significant; on the other hand, projects focusing on North America are not familiar with other regions and lack the ability and resources to penetrate other markets. There are a large number of users outside of North America, and their growth potential remains to be further unleashed.

For Morph, our user distribution is very broad, and our team is also very international, with core members from both North America and Asia. This allows Morph to better understand the differences between the two markets, accessing the ideas, innovations, and product detail pursuits of North American developers while also broadly understanding the diverse needs of users in different regions. Morph acts as a bridge that integrates Eastern and Western perspectives, allowing us to find the most suitable and excellent developer teams while also bringing in users who wish to interact with these applications. This is one of the reasons we are positioned as a consumer-grade L2 and believe we can succeed.

Deep Tide TechFlow: How can ordinary users participate in the Morph ecosystem before the mainnet goes live? In the current situation where users are fatigued from completing tasks to earn points, how does Morph's "Morph Zoo" points program achieve effective incentives for the ecosystem?

Cecilia:

In May, we launched Morph Zoo, a testnet incentive activity themed around zoos, forests, and koala animals, aimed at attracting users to participate and test our technology and products. Users can earn points by interacting with applications deployed on the Morph testnet.

Indeed, many projects' points programs can make users feel fatigued, but for projects in the early stages, points programs are still an effective incentive tool for quickly entering the market. This is because current Web3 users generally focus on the benefits a project can provide, and projects need to attract users through incentive measures to guide them to further understand what the project is doing.

The biggest difference between Morph's points program and those of other projects is the friendly and approachable community atmosphere. As a consumer-grade L2, Morph's community members are more ordinary consumer users, so the overall tone of our community atmosphere is more congenial. Many users in the community even actively share their life experiences, and this atmosphere, along with the recognition of Morph, forms a community culture that we highly value. Although users come in through points, they end up liking it here. Currently, our Discord has about 200,000 users, and Telegram has about 100,000 users, with an average of 25,000 messages per day in the community. In terms of user stickiness, activity, and enthusiasm, Morph is leading in the L2 space.

Additionally, we hope to use the Morph Zoo activity to show more developers that Morph is focusing on consumer-grade applications, thereby encouraging them to join the ecosystem and start building. In fact, as a consumer-grade L2, Morph faces some challenges during the testnet phase: on one hand, the vast majority of ecosystems focus on supporting the development of DeFi and other applications, so developers are more willing to spend time and energy building DeFi products, and there are not many consumer-grade applications and developers in the market. We hope to tell everyone through a series of activities and promotions that we can provide support for consumer-grade applications, and if developers are interested, they are welcome to join Morph. On the other hand, many projects are reluctant to deploy on the testnet first, so testnet activities serve as encouragement for projects to invest in ecosystem building at an earlier stage, witnessing the growth of the ecosystem as long-term partners.

Deep Tide TechFlow: Developers are the soul of ecosystem building. What measures has Morph implemented to lower barriers and provide incentives to attract more developers?

Cecilia:

As I have emphasized multiple times, the ecosystem is the focus of Morph and is a significant feature that distinguishes Morph from other technical public chains. Therefore, we have implemented a variety of incentive measures to encourage innovation within the ecosystem.

First, we have the Morph Bounty program, which divides bounty tasks into technical, non-technical, and innovative categories and is open to any community member: whether you are a developer who can help Morph contribute code, fix bugs, or optimize performance, or a creative individual who can create attractive content themed around Morph, host impactful events, or propose novel use cases and solutions, we encourage you to join the Morph Bounty program and submit your work. Successful submissions will receive corresponding rewards, public recognition from the community, and opportunities for ecosystem collaboration.

Secondly, for early innovative projects, Morph has also partnered with Foresight Ventures to co-establish the Morph Ecosystem Fund, with a total fund size of up to $20 million, aimed at providing a series of support from funding, financing to promotion and listing to help them grow rapidly. We also welcome early projects with clear development roadmaps that are willing to co-build the consumer-grade ecosystem with Morph to apply.

Additionally, for seasoned entrepreneurs, Morph has launched the Morph Entrepreneur-in-Residence (EIR) program, which aims to attract mature practitioners with successful experience in the industry to join Morph. They will work closely with Morph's core team to develop groundbreaking Web3 projects based on Morph, turning visionary concepts into market products and further promoting the development vision of Morph's consumer-grade ecosystem. We understand that achieving success is not an overnight process, so we prefer that members selected for the EIR program can commit full-time and are long-term practitioners. At the same time, we will provide monthly stipends, financing channels, VC connections, mentorship, market operations, and various support and assistance.

It is worth mentioning that for developers and projects at different stages of development, Morph aims to provide full-cycle financial support through the Morph Grants Program. Projects can apply to join by submitting project proposals that include an overview of the project, development roadmap, budget, and how to utilize Morph's infrastructure. Approved projects can receive up to $100,000 in funding, which will be disbursed in stages based on the completion of the project's roadmap.

Finally, from a macro perspective of the ecosystem, Morph has also launched the Morph RPGF program, providing bonus support, public recognition from the community, and ongoing ecosystem support to all developers, projects, DAOs, applications, individuals, and groups that have made significant contributions to the Morph ecosystem over the past year.

In addition, Morph further provides guarantees for developers within the ecosystem through various measures such as irregular hackathons, full refunds of the first-year sequencer profits, and airdrop rights. It can be said that our sincerity in co-building a consumer-grade L2 with developers is evident, and I have also emphasized multiple times that beyond technical support, Morph is very good at helping projects grow from 0 to 1 and then to 100. We welcome interested developers and project parties to join our community to learn more.

Deep Tide TechFlow: In Morph's articles, social media, and community, we often see a cute koala. Why did you choose the koala as the brand mascot? What does it symbolize? In addition, what strategies will Morph implement in brand building?

Cecilia:

We chose the koala because we believe its lazy image aligns very well with our positioning as a consumer-grade L2.

Morph focuses on consumer-grade scenarios and aims to bring incremental users into Web3. The current Web3 is too complex, and ordinary users will not spend a lot of time and energy studying the technical logic and product design of Web3. They need to know at first glance that a product is user-friendly, just like the iPad or iPhone, which even children can easily experience.

The koala symbolizes our pursuit of a low-barrier user experience. Users should not only have a very low entry threshold, but the entire registration and interaction process should also be very simple. What users need to do is to enjoy the gifts of nature and the convenient experience brought by human-centered product design, just like a koala.

Ecosystem Advantages Are Hard to Replace; Mass Adoption of Web3 Requires More Female Power

Deep Tide TechFlow: What opportunities and challenges do you think the advancement of Ethereum upgrades will bring to the L2 space? What measures will Morph take in response? What do you think the future form of L2 will be?

Cecilia:

Ethereum's upgrade has reduced transaction costs by about 80%, which makes users more willing to enter the ecosystem for interactions. More users represent a significant opportunity for the ecosystem, while the reduction in technical barriers and costs also brings some challenges for L2 development, as more applications may consider developing their own Rollups. I think this is an inevitable trend.

For Morph, responding to this series of challenges goes back to the project positioning I mentioned at the beginning: Morph foresaw the trend of decreasing technical barriers from the very beginning. At that time, L2s with technology as their core advantage would face significant impacts. However, Morph was not initially positioned with technology as its core advantage; our core advantage lies in consumer-grade ecosystem positioning and construction, which is difficult to replace and challenge. The longer time goes on, the richer the ecosystem becomes, and the tighter the binding between users and the ecosystem, the higher Morph's value will be.

At the same time, applications can certainly choose to build their own chains, but the greater significance of L2 lies in how to help projects within the ecosystem achieve mutual growth. Just like a village developing alone is difficult, but many villages gathering together to develop urbanization brings completely different scale effects. We are fortunate that Morph found our consumer-grade ecosystem positioning from the very beginning, and I believe this is the most suitable positioning for long-term development. Even with continuous technological iterations and innovations, the advantages formed by the ecosystem potential we continuously accumulate will not be broken.

Deep Tide TechFlow: Can you share what Morph's work priorities will be in the upcoming 2024?

Cecilia:

Our most important work in the second half of the year: one is the mainnet launch; the other is the token launch.

Deep Tide TechFlow: As a successful female leader in Web3, what advice do you have for female practitioners in Web3? What effective measures do you think can help more women enter the Web3 industry and play important roles?

Cecilia:

I believe that the increasing number of female practitioners in any industry represents a more mature stage of development. Currently, Web3 is also showing this trend: five years ago, when I first entered the industry, many female executives were positioned as CMOs and might have been labeled by the community as using their beauty to stand on stage. Today, more and more female practitioners are active in the core management levels of Web3 projects, and they can truly participate in important decision-making for project development and contribute many constructive opinions to the project and the industry. However, overall, the number of female practitioners is still low.

To help more female practitioners enter the Web3 industry, on one hand, we are also conducting related activities ourselves. For example, we have an organization called Blockchain4Her, which aims to inspire more women to enter Web3 by sharing the stories of outstanding female entrepreneurs in Web3. On the other hand, since much of the knowledge in the Web3 industry is quite technical, financial, or even political, it may not be topics that most women typically focus on. Additionally, the Web3 industry itself has some negative news circulating, and most women are not inclined towards risk, which further hinders the development of the female community in Web3. We can conduct more public education and outreach to build awareness and break biases. Of course, I am also very willing to contribute more to this, guiding more women to enter Web3 and play a greater role.

Finally, I believe that the development of any industry requires the coexistence of male and female perspectives. From a management perspective, there are significant differences in management styles between men and women. Women tend to be more resilient in problem-solving, being both gentle and firm, and their strength is by no means inferior to that of men. From the perspective of Web3, women are better able to address diverse user needs and formulate more effective marketing strategies based on this. The mass adoption of Web3 needs the inclusion of more female power.