Web3 OG Dovey Won is the founder of Primitive Ventures and one of the first Orderly Network investors. Dovey “loves working with founders who have a legitimate obsession in solving hard problems” and is a frequent source of inspiration for the Orderly Network leadership team. Below is a Q&A with Dovey on how she sees Orderly Network, and Web3, evolving.

What led you to found Primitive Ventures, and what is your vision for the firm?

At Primitive Ventures, we deeply believe that crypto represents far more than just an asset or technological advancement: it represents the new socioeconomic primitive that will redefine individual sovereignty and financial paradigms. In order to pursue this long-term belief, Primitive Ventures is not set up as a “VC” – we don’t take any outside capital, and invest only our own money, with 100% skin in the game. This ensures that we are fully committed and aligned with the success of our founders, and also allows us the freedom to manifest our thesis of “long substance, short status” by investing in some of the best crypto-native founders who share the original cypherpunk spirit.

Can you share some of the key lessons you've learned from investing in DeFi projects?

Risk management, user experience, and liquidity strategy are incredibly important.

Permissionless liquidity means “mind your own risk,” so it’s up to the protocol designer to mitigate risk at all cost when designing the protocol; a single incident will kill the project. We have seen countless projects killed by oracle attacks and seemingly small design negligence early on. Also, CEXs still provide an experience that’s tough to compete with. As a result, early DeFi protocols tried to attract users via excessive incentives, but as we saw in 2020-21, they were unsustainable. Now though, with positive developments like account abstraction, social login, intent design and rollup infrastructure (which improves trade execution costs), I believe DeFi can offer a trading experience on par with any CEX.

One note on liquidity strategy in particular – that has to be both about liquidity acquisition as well as retention, as many DeFi projects fail to retain liquidity after the initial rush. Sound liquidity is much more valuable than toxic liquidity; TVL can sometimes turn into a superficial vanity metric if the project fails to deliver.

As some older DeFi projects struggle, others are evolving their own chains. Talk to me about this trend and how you see it progressing.

Vertical integration will continue to happen in DeFi. We’re seeing a big trend across DeFi projects right now to control more of the stack and own the entire value chain, from DYDX becoming its own appchain, Frax launching a Layer 2, and even Maker and GMX are considering launching their own chains. For top DeFi projects, being on their own chain will give them more autonomy with respect to structure and design, and potentially accrue more value to their token holders and LPs. Hopefully, as interoperability matures, liquidity segregation and bad UX (which results in chain hopping) can be mitigated.

How do you suggest DeFi founders approach their relationship to rollups and chains now that there are so many in the market these days?

Find chains with specific differentiators that can offer a good chain-product fit, with a particular focus around two dimensions: liquidity and distribution. There needs to be a clear benefit for your DeFi project before “dating” a new chain.

Can you share what made Orderly Network stand out from an investment perspective?

Orderly’s omnichain liquidity engine is a game-changing play in my opinion, with an order matching engine built on OP Stack as the settlement chain. Onchain settlements on each block act as an immutable netting system for trade, margin and balance information for every user from all brokers. And, Orderly Network’s shared liquidity is repurposed across various broker channels both on CeFi and DeFi, servicing retail onchain and offchain, with an easy plugin for professional and institutional traders via API.

Also, on the backend, there is a competing mechanism for the maker to be the most competitive solver. Compared to TradFi, Orderly’s CLOB engine is akin to the Chicago Mercantile Exchange, and Orderly Chain is like a decentralized CME Clearing. CME Clearing is the world’s largest clearinghouse, clearing $1.5 quadrillion in securities transactions yearly. With the permissionless maker onboarding and listing that Orderly enables, it’s on its way to become a decentralized clearing house that combines the capital efficiency of CeFi and capital fluidity of DeFi.

What is the biggest challenge for DeFi founders currently?

Figuring out the right products and verticals they want to build for. Consumers don't want more choice, they want to be more confident in the choices presented.

As there are more chains being launched and liquidity becoming more fragmented, DeFi founders need to carefully strategize their product roadmap and GTM strategy in order to properly incentivize liquidity and growth at the right place and right time.

There’s been a lot of activity on Bitcoin lately – the ETF approval, upcoming halving, rise of Ordinals, and now Bitcoin L2s; how do you see the Bitcoin DeFi landscape developing?

I’m bullish on Bitcoin DeFi. “Show me the incentive, I’ll show you the outcome.” There is a lot of capital sitting idly on Bitcoin, and it used to find yield via centralized lending companies, but we all know how that ends. Eventually, there will be more crypto-native ways for BTC be leveraged through financial activities onchain. Additionally, as Bitcoin’s market cap goes up, it requires more and more capital to deliver further growth. In the next few halvings, miners' revenue will be severely impacted if the price of Bitcoin doesn’t continue to increase exponentially.

Eventually, the Bitcoin blockchain needs to find an economic model that can sustain the network’s security without overly relying on the BTC price growing exponentially every four years. The emergence of Ordinals and Bitcoin DeFi is a strong signal of an expansion of BTC use cases outside of being “digital gold.” Bitcoin used to be a passive generational wealth play for many, but now it’s much more expressive and dynamic after the activation of Tarproot. Primitive Ventures has invested in some of the top DeFi L2 protocols like Merlin, Bouncebit and Mezo, and each has its own distinct value proposition, generating yield that will contribute to the underlying Bitcoin ecosystem. Primitive also invested in Bitcoin infrastructure players like Nubit, which will increase the Bitcoin DA capacity and fix the centralization issues around Bitcoin blockchain indexers, making Bitcoin DeFi a real thing.

With fragmented onchain liquidity and many trading instruments still offchain, how do you think Orderly Network can bridge these two worlds?

Orderly is the perfect solution for this situation, as it has a unified orderbook and unified liquidity, so the trading experience Orderly Network provides is one of the best. And, Orderly’s network effects will only continue to grow as it integrates with new chains, acting as the decentralized clearinghouse across all of Web3.

How’s the Asia market doing after the implosions of 3AC, Babel and Luna?

The Asia crypto market is thriving. The majority of Bitcoin BRC20 and ordinal trading volume is from Asia. Ironically, most of the collateral damage from 3AC, Babel, and Luna was at western “institutions.” Honestly, it opened the eyes of many Asia retail traders, who used to believe that western institutions were smarter than they are. We’re seeing many top DeFi developers based out of Asia too – Drift, Aevo, Jupiter – you name it. And we’re also seeing friendlier regulations from jurisdictions like Japan and Hong Kong, which are creating tailwinds for the region.

What advice would you give to someone who is new to the space and looking to learn more?

Get your hands dirty – try onchain products, ape some coins, join the project's community, and find the right people to follow on X. And always harken back to the original cypherpunk spirit – “don’t trust, verify” and DYOR.