Heated AMA Debate: 0G Team Responds to Allegations of CFX Soft Rug, Overvaluation, and Token Commitment Concerns
This AMA primarily focused on the relationship between Conflux and 0G Labs, discussing 0G Labs’ high valuation, fundraising structure, technical direction, and community concerns over transparency. 0G CTO (formerly Conflux CTO) Ming Wu and 0G Labs CEO Michael Heinrich provided detailed explanations about 0G Labs’ origins, fundraising details, technical roadmap, and its collaboration with Conflux.
Community members raised concerns about 0G Labs’ high valuation, transparency in funding commitments, and future revenue model. In response, Michael and Ming Wu argued that 0G Labs’ valuation is based on its long-term vision and market potential, and that its fundraising structure aligns with industry standards. The AMA also touched on changes in the Conflux team, discussions about the Yao Class background, and 0G Labs’ privacy-preserving technology.
0G Labs (Zero Gravity Labs) is a startup focused on the intersection of crypto and AI, aiming to build infrastructure for decentralized AI systems. The company recently announced $290 million in new funding, consisting of a $40 million seed round and a $250 million token purchase commitment. Investors include Hack VC, Delphi Digital, OKX Ventures, Samsung Next, Animoca Brands, and its co-founder Yat Siu. The seed round was structured using a Simple Agreement for Future Equity (SAFE) with a valuation cap exceeding $2 billion, raising skepticism within the community.
AMA Link: https://x.com/i/spaces/1MYxNwZlagvKw
Ming Wu on His Relationship with Conflux and the Background of Joining 0G
Yuxin:
Ming Wu, I wasn’t very familiar with you before, but everyone says you were the CTO of Conflux and a leading expert in technology. Could you introduce yourself? What’s your background, and why did you join the 0G team?
Ming Wu:
Before entering Web3, I worked at Microsoft Research Asia for 11 years, focusing on distributed systems across various aspects. During that time, I met Long Fan — he was my intern, and we worked on several projects together.
Later, Long Fan went to MIT for his PhD, and after graduating, he returned to China to start Conflux. He invited me to join as a co-founder. At first, I wasn’t particularly interested in blockchain, but after researching it for a while, I realized that decentralized blockchain technology had profound significance. That’s when I decided to leave Microsoft and join Conflux. Together with the founding team, we built the system, which has now been running stably for years.
Ming Wu:
As for how 0G came about — it was during Conflux’s lowest point when the token price hit rock bottom. Long Fan, Yuanjie, and I started thinking about the future of Conflux. We realized that while Layer 1 projects are important, they don’t offer much flexibility for innovation. So, we began exploring new project ideas and eventually decided to work on decentralized storage.
Ming Wu:
Initially, we had many ideas for this project and started development. However, market feedback wasn’t promising — there wasn’t much enthusiasm for decentralized storage. After discussions with industry peers, we found that interest in this sector was lukewarm, so we decided to halt that direction.
Then, Thomas — our angel investor from IMO — learned that we were looking for new directions and introduced Michael to us. He helped us explore international markets. Michael was a Web2 entrepreneur with a strong interest in Web3 and some prior experience in the space.
We had in-depth discussions with Michael about the future of Web3 technology, particularly around cross-chain bridges, interoperability, and storage. These discussions weren’t one-off conversations but rather an ongoing exchange. With Michael’s initiative, we also pitched our ideas to VCs. His Web2 background gave him unique insights into the Web3 market. He attended numerous industry events, gained a deeper understanding of the landscape, and brought back fresh ideas for us to explore further.
Michael was deeply interested in the space. Eventually, he took the ideas we had discussed and engaged VCs in deeper conversations. Through these discussions, we gradually realized that this was a promising direction — not just something that relied on a big-name endorsement. Michael officially joined us around March or April last year.
Colin:
So before that, it was mostly just you internally brainstorming and incubating ideas?
Ming Wu:
Not exactly. We had only gotten as far as considering storage as a potential direction, and that’s where we stopped. Michael, on the other hand, pushed things forward significantly — exploring how this concept could evolve into DA (Data Availability) and how it could integrate with AI. That led to many new discussions. Later, Thomas introduced Michael to us — Thomas is a VC from IMO Ventures.
Michael doesn’t have a purely technical background, but he does have some technical experience before transitioning into business. I don’t see this as an issue — there’s no rule that a CEO must come from a purely technical background. What matters is his vision and commitment to technology, which I deeply appreciate. He genuinely wants to build great technology and bridge the gap between Web3 and Web2 in terms of product experience and use cases.
With this vision, he engaged with VCs, though he also needed our support from a technical perspective — to advise on what was feasible and what wasn’t. These discussions helped refine the technical direction of 0G, ultimately leading to its initial funding from Hack VC.
After securing funding, the relationship between Conflux and 0G became more complex. From our perspective, we saw Michael as an excellent CEO, and we believed that as long as he had strong technical support, 0G would thrive. We had high confidence in the project and participated as early investors, with a relatively significant investment.
Conflux provided early technical support to 0G, which was entirely reasonable. However, contrary to speculation, Conflux has not abandoned its own path. It is still moving forward. As for the support given to 0G, Conflux primarily provided one or two core engineers — this level of support is perfectly justifiable. After all, 0G’s success would, in turn, benefit the Conflux ecosystem. That’s my personal view.
Michael Heinrich’s Introduction
Michael Heinrich:
Let me give you my full background. I’m originally from Berlin, Germany, but I moved to Silicon Valley in the U.S. when I was about 13. That’s when I discovered my passion for technology. I used to visit SAP Labs, where my father worked, and that was my first exposure to the internet.
One day, a manager there saw me and asked if I wanted to do some programming. I didn’t know how to code at the time, but he told me they would set up a course for me. That’s how I started developing Web2 applications for SAP, becoming the youngest programmer at SAP Labs. Since I was too young to get paid, they gave me a bunch of free hardware instead, which was really exciting for me. That’s where my journey in tech began.
I’ve worked in tech, first in product management roles at SAP Labs and Microsoft, before shifting into business. I later joined Bain & Company, where I worked with several Fortune 500 tech and finance companies, including Intel. After that, I moved to Bridgewater Associates, where I focused on portfolio construction at the world’s largest hedge fund. Then, I went to Stanford for grad school and founded my first unicorn startup, which was backed by Y Combinator. I raised around $130 million for the company, grew the team to about 650 people, and built an annual contract revenue of roughly $100 million.
I started investing in crypto in 2013. During grad school, my classmate Thomas and I first learned about Bitcoin, and we later invested in many companies together. In late 2022, he introduced me to the 0G team. After six months of collaboration, I decided to join and officially launched the 0G project in May 2023.
Conflux’s Investment in 0G: Project Progress, Token Allocation, and Team Overlap
Colin:
Ming Wu, I have a few questions. First, Conflux invested in 0G and provided technical support. As Conflux’s CTO and co-founder, have you fully transitioned to working at 0G?
Ming Wu:
That’s a good question. Balancing support between Conflux and 0G is crucial. The initial concept for 0G was developed by Long Fan and me, while Michael led the team formation and fundraising. Naturally, we continue to support 0G. But if both Long Fan and I completely shifted focus from Conflux to 0G, that would indeed be a problem. We need to allocate our efforts wisely. Personally, I spend more time on 0G, while Long Fan remains more focused on Conflux. It’s a matter of project management.
While Long Fan and I are both founders of 0G, our level of involvement differs between the two projects. We are careful in distributing resources to ensure that both Conflux and 0G receive the necessary support. Michael would prefer that I dedicate more time to 0G, which I understand. But for Conflux, we are making appropriate arrangements. If necessary, I will formally transition to being 0G’s CTO and step down as Conflux’s CTO.
Colin:
You mentioned that 0G could benefit Conflux in some way. Is that because some Conflux employees contributed to 0G’s development and received tokens? Did the Conflux community receive any token allocations?
Ming Wu:
No, it doesn’t work that way. 0G tokens were allocated to the Conflux project, not directly to individual employees involved in 0G’s development. The distribution of these tokens is entirely determined by the Conflux Foundation, not allocated based on participation.
Colin:
Got it. Can you disclose the token allocation ratio between Conflux and 0G? Specifically, how do you, Long Fan, and Conflux divide the allocation?
Ming Wu:
I don’t have that information, as it pertains to Conflux’s internal matters, which I can’t disclose.
Colin:
Another key question: You mentioned that Michael joined and helped push the project forward. Does he hold the largest equity or token share in 0G? More than 10% or 20%?
Ming Wu:
Typically, a founder’s equity stake wouldn’t be that high, and token allocations follow a similar pattern.
Colin:
Understood. But combined, you and Long Fan likely hold a larger stake than Michael, right?
Ming Wu:
That’s difficult to say.
Colin:
Some in the Conflux community are concerned that Conflux’s CTO, co-founder, and several developers have shifted their focus to 0G. This raises concerns about Conflux’s progress, especially given that several initiatives from last year — including Bitcoin-related projects, the BSIM card, and RWA — haven’t materialized.
Ming Wu:
Here’s the reality: Some of these projects are still in progress. For example, the Conflux BSIM card has been completed on the technical side. However, its actual release depends on telecom providers like China Telecom, and that’s beyond the tech team’s control — it involves national policies and internal corporate processes. We’ve done what we can.
Colin:
What about the progress of Bitcoin-related initiatives?
Ming Wu:
When we initially explored Bitcoin Layer 2, the topic was gaining traction. We conducted extensive technical feasibility research, but the market changed quickly. Based on feedback from the Conflux Foundation and the market operations team, we decided not to proceed further, as the sector was losing momentum. If market interest resurfaces, we may revisit the idea.
From a technical standpoint, Conflux is capable of developing anything we set our minds to. However, we always consider the purpose and potential impact of our efforts. No development resources should be wasted. If we make the wrong call, it’s our responsibility — but these decisions are ultimately driven by the Conflux Foundation and market operations team. As CTO, I align with those strategic decisions.
Colin:
Understood. Can you share how much of Conflux’s development resources have been allocated to 0G over the past year?
Ming Wu:
Actually, very little — about two core engineers.
Gink:
Regarding 0G’s announcement, I noticed that there are eight PhDs in computer science. Do any of them overlap with Conflux? If so, how many?
Michael Heinrich:
Let me clarify the relationship. Conflux is an investor and advisor to 0G, but 0G is an independent company. It’s registered in Delaware, with a separate 0G Foundation based in the Cayman Islands, along with other foundations that manage token issuance. Structurally, there’s minimal overlap between Conflux and 0G. Our team operates independently with around 50 members.
Under an advisory agreement, Conflux has provided 5–6 technical contributors to help accelerate on-chain implementations and the storage network. While we do have many PhDs, only about 5–6 came from Conflux, and that number fluctuates based on project needs. For example, when we couldn’t quickly hire product managers, we temporarily leveraged support from Conflux. Per the advisory agreement, Conflux only receives token-based rewards if they continue providing support. That’s how the relationship is structured.
Ming Wu:
To clarify, Michael’s statement about 5–6 overlapping PhDs isn’t entirely accurate. The actual overlap consists of myself, Long Fan, Li Chenxing, and Li Peilun — just four. The rest of the PhDs are from 0G’s own team.
0G’s High Valuation in Fundraising Documents
Colin:
Michael, I have a question regarding 0G’s fundraising documents. You mentioned that the project has a valuation exceeding $2 billion and a commitment of over $200 million in token financing. There are two parts to this question:
1. Why does a project that’s only been around for a year have such a high valuation? It seems disproportionate compared to other projects in the market. Can 0G actually reach a $2 billion valuation when its tokens launch?
2. What exactly does the $200 million+ financing commitment mean? Does it represent actual investments, or are there specific conditions attached?
Michael Heinrich:
First, due to U.S. regulations, we can’t disclose future valuations or token prices. Such information is typically confidential, so I can’t comment on future valuations or prices. However, I can discuss the valuation from our last fundraising round.
0G Labs initially raised around $35 million at a peak valuation of $1 billion. Then, in our seed round, we raised $40 million with a valuation cap of $2 billion, using a SAFE structure with token subscription rights. So, the highest SAFE valuation was $2 billion — that’s the valuation context for 0G Labs.
On the 0G Foundation side, we conducted a token warrant sale, as detailed in our December update, raising over $32 million. Additionally, we secured a $250 million token financing commitment. You can think of it as a perpetual token commitment (TC) facility — it’s not a pre-fixed purchase at a set price, but rather a commitment based on public market pricing with a discount.
Colin:
Okay, Michael. One more question — if you’re saying there’s a $200 million+ token commitment but haven’t clearly explained how it works to the public or media, wouldn’t that be misleading? Shouldn’t there be more transparency about how it operates, when OTC transactions will occur, and how exactly it’s structured?
Michael Heinrich:
This is actually a common practice in the stock market. Many participants use similar mechanisms — essentially a commitment to purchase an amount that can be drawn upon when the asset goes public. This approach is well-established and has a track record.
In fact, this is essentially a pre-committed “At-The-Market” (ATM) facility. Companies use this structure to sell equity and enter public markets, similar to a treasury management tool.
Are you familiar with OTC token warrants? In OTC deals, investors receive a 3–5% discount because they are taking on the long-term price volatility risk. Our token commitment follows a similar structure. We aim to be fully transparent about this; otherwise, we could have just announced a $250 million raise without clarifying the commitment mechanism. Instead, we openly disclosed that this is a pre-committed token purchase agreement. This structure is quite common in investment deals and is beneficial for the project because it allows us to leverage public market dynamics for valuation adjustments rather than locking in a fixed price too early.
Colin:
From the community’s perspective, we rarely see other projects mention OTC commitments in their fundraising announcements. Can you provide an example?
Michael Heinrich:
In the last cycle, Polygon announced a $500 million OTC deal, right?
Colin:
But Polygon had already launched its token, whereas you haven’t.
Michael Heinrich:
Yes, that’s why ours is a pre-commitment rather than a post-launch commitment. OTC deals can be structured before a token officially launches.
Colin:
Ming Wu, what are your thoughts on this?
Ming Wu:
Honestly, I don’t think this is a particularly important issue.
Colin:
I disagree. This is very important. It’s extremely rare for projects at the fundraising stage to publicly highlight such a high valuation. This kind of messaging gives the impression that the token is already highly valuable. While the price may fluctuate after launch, this could mislead retail investors into believing they are buying into something at a much higher valuation than it may actually be worth. That’s a concern.
Ming Wu:
No, no, there are actually many token fundraising deals with similar valuation approaches.
Colin:
Can you name another project that has publicly announced a token commitment like this before its token launch?
Ming Wu:
Are you referring to valuation or the committed token financing?
Colin:
These are separate issues. First, it’s rare to see a project with such a high valuation at this stage. I can think of very few projects that have had higher valuations. Second, the concept of a pre-committed token sale is quite unusual. If anyone has seen similar examples, I’d love to hear them.
Ming Wu:
Yes, this kind of announcement is indeed uncommon. Okay, regarding the pre-committed token financing — I haven’t seen many similar cases either. But I don’t think this is a particularly critical issue for the project.
Colin:
I think it’s very important. This structure inflates the perceived fundraising amount, making it seem much higher than the actual cash received. In reality, you may have only raised a few tens of millions in cash, but by including the token commitment, the total figure suddenly jumps to over $300 million.
Ming Wu:
Well, that’s just a fundraising mechanism. To be honest, I don’t fully understand the details of this structure myself, but that’s how it works. I think Michael is the best person to explain it.
Further Discussion on 0G’s High Valuation
Colin:
The community seems quite interested in this topic. The main concern is whether a $2 billion valuation is excessive. This kind of valuation is almost unheard of in the market. When TGE (Token Generation Event) happens, will you be able to justify such a valuation? Could this lead to uninformed retail investors buying tokens at this valuation and suffering significant losses? Also, regarding token allocations — how much do Long Fan and Ming Wu each hold, and what is the allocation for Conflux?
Yuxin:
Michael, I have a slightly more pointed question. Could you share details on 0G’s token allocation? What percentage of tokens do team members like Ming Wu, Long Fan, and other founders hold? The community is also curious about plans for decentralized governance — do you have any initiatives to increase transparency?
Michael Heinrich:
In the U.S., it’s not common to disclose exact token percentages, but we have shared that the team’s allocation is around 22%. As a founder, I hold a relatively high percentage of tokens since Thomas and Long Fan are not as actively involved as I am. Our governance voting power is also significantly higher than theirs.
We are working with companies like Agora to explore governance models, and we’re also reviewing proposals from other firms. One approach we’re considering is “optimistic governance,” where a security council within the foundation makes decisions in an optimistic manner unless challenged.
Colin:
Are you concerned that this high valuation might lead investors to buy tokens at inflated prices, only to incur heavy losses later? In the current market, VCs are securing tokens at much lower prices, and we haven’t seen many projects reach this kind of valuation.
Michael Heinrich:
Our goal is to build a company that lasts for decades, not just a few years. Look at companies like OpenAI — their valuation is in the tens or even hundreds of billions.
Colin:
But you’ve only been operating for a year — just one year.
Michael Heinrich:
Yet, some startups like xAI raised over $6 billion in their first funding round. So it depends on how you look at it. We are working on decentralizing AI at all levels — training, fine-tuning, inference. We also need to rebuild the entire data infrastructure and storage layer.
We’re even building a blockchain specifically to enable decentralized AI workloads. In that sense, compared to OpenAI, you could argue that our valuation is actually quite low. It’s really a matter of perspective. We are focused on long-term goals — creating AI as a public good.
Gink:
I have a simple follow-up question regarding the $250 million token commitment. Is that the pre-discount amount, or the post-discount amount? In other words, will investors pay $250 million, or is it based on a $2 billion valuation but with a discount, meaning the actual amount could be $220 million or something similar?
Michael Heinrich:
It’s not that simple. The $250 million is the total amount we will eventually receive, but the valuation is determined by the market price of the token at the time of purchase. So in practice, we control how much we draw from the OTC commitment based on valuation.
Colin:
So, the money hasn’t been received yet. My understanding is that this is just a future arrangement where investors may choose to buy at a certain price — it’s not a firm commitment. I won’t comment on that approach.
Yuxin:
Got it. He’s saying their goal is to decentralize AI, making everything decentralized so it can eventually become a public good. That’s why he believes this is a long-term project that can be compared to — or even surpass — OpenAI, which is why he sees the high valuation as justified.
Ada on 0G’s Fundraising Model and Token Commitments
Ada:
I handle marketing and go-to-market strategy at 0G. When I first joined, I didn’t expect to get pregnant, which added a lot of stress to my workload.
Colin:
You’re also Michael’s wife, correct?
Ada:
Yes, I’ve never hidden that. I’ve previously founded other companies, though that’s not the point here. During my pregnancy, I had to visit the hospital four times a week, and my baby was eventually born prematurely and had to be placed in emergency care. Thankfully, the baby is now recovering. Because of my pregnancy, I wasn’t able to dedicate as much energy to the startup as I wanted, and there were some communication issues along the way.
Regarding fundraising, I think there may have been some minor translation issues. Ming Wu previously described the fundraising model, and I just want to clarify — since most of our team isn’t Chinese, some of these fundraising methods may be unfamiliar to the Chinese community, which is understandable.
Colin:
We’ve seen plenty of fundraising announcements from U.S. projects — why would Chinese investors not be aware of them?
Ada:
I’m talking specifically about our fundraising approach. It’s uncommon in crypto, but very common outside of crypto.
The OTC deal we structured is similar to how many U.S. startups raise capital — they exchange equity for investor funding to support business growth. That’s where the $250 million commitment comes from.
As for valuation, we received strong backing from major investors early on. These angel investors validated our vision, which later encouraged other investors to evaluate our company. At the time, we were focused on DA (Data Availability) and AI modularity — building AI-specific data availability solutions. Around then, Celestia had launched its token, and its price performed well.
We’re not comparing ourselves directly to Celestia, but in the broader market environment, our team stood out. Michael and Ming Wu both have strong track records in their respective fields, which helped gain market recognition. Investors saw our technical capabilities and vision, which led to a highly successful fundraising round — our first round raised $35 million.
We also ran extensive online and offline campaigns, which were effective. Among the investors in the $35 million round, some were highly cautious — especially Hack VC. They spent four months doing due diligence, reviewing our whitepaper and code. Initially skeptical, they eventually became strong supporters and even invited Michael to speak at Hong Kong’s Web3 Carnival.
Internally, we debated whether to continue raising funds. Ultimately, we decided to proceed to ensure sufficient funding for our decentralized vision and to diversify funding sources.
As fundraising continued, we gained support from investors and KOLs across North America, Europe, and the Middle East. Over 200 investors supported us — investors we found directly, not through brokers. Michael worked tirelessly, flying all over the world every month to pitch the project and secure funding.
The KOLs we worked with were not brokered either — we reached out to them directly. Michael was relentless, constantly traveling to meet KOLs and bringing them into the project. Since our team has relatively few Chinese speakers, some information may have been lost in translation, causing misunderstandings. We are actively working to address these issues.
Gink:
Since you mentioned brokers and KOLs, how did you outperform MegaETH? Can you share how you established these connections and onboarded Genesis NFT holders? Also, how did you determine the valuation for KOL rounds? I’d appreciate a clarification.
Ada:
I’d like to explain our approach. We had four key strategies for success:
1. Existing KOLs who believed in our vision and supported us.
2. Direct outreach to KOLs, engaging them through DMs.
3. Some KOLs worked with us via brokers, helping expand our reach.
4. We identified and engaged new KOLs from rankings and invited them to support us.
Gink:
Sorry to interrupt, but could you clarify the valuations of the two KOL rounds?
Ada:
The first round had a lower valuation, but I’m not sure if I can disclose exact numbers.
Colin:
Michael, we’d like to know the approximate valuations for the KOL rounds — both the first and second rounds.
Michael Heinrich:
We offered KOLs a significant discount. Across both rounds, the discount was roughly 60% because we required them to create substantial content for us. So, this roughly aligns with pre-seed and seed stage valuations.
Gink:
Got it. So roughly $600 million and $1.2 billion, correct? And for the next two KOL rounds, based on the Series C valuation, the first round was at $1 billion and the second at $2 billion — is that accurate?
Michael Heinrich:
Not quite — it was a bit lower. Specifically, the valuations were $400 million and $600 million.
Discussion on 0G’s Shift from DA to AI
affe:
0G originally focused on DA (Data Availability), but in November last year, you shifted towards AI. Were you concerned about this change?
Michael Heinrich:
I’m happy to answer that. If you look back at our talk at EthDenver when we first introduced 0G, we positioned ourselves as the first modular AI blockchain. So, we’ve been working on AI from the beginning. Saying we were solely focused on DA isn’t accurate.
Data availability is indeed a key component. If you want a fast enough blockchain to handle AI workloads, just look at AI data centers — they have virtually unlimited bandwidth, handling hundreds of gigabits per second, sometimes even exceeding 1TB. Meanwhile, the top DA layers process only 10 to 30MB per second. From an AI workload perspective, we’re still far from sufficient.
So, starting with DA made sense before moving into other components. The data availability layer is a critical piece of the puzzle.
affe:
I just want to clarify something. I have no issue with a project pivoting, but you said you’ve been focused on AI infrastructure from the beginning — roughly a year ago. However, looking at your GitHub, the first mention of AI didn’t appear until November 24 of last year. That seems inconsistent with the claim that you’ve been discussing AI for nearly a year.
Michael Heinrich:
I can share my Stanford talk from EthDenver last February as evidence. I’ll be happy to post it in the comments.
affe:
I just noticed the discrepancy, but I appreciate your response.
Debate on Whether 0G’s Valuation Benchmarking Against OpenAI is Justified
Ming Wu:
Regarding this $2 billion valuation discussion, I think there was a misunderstanding earlier. I don’t believe Michael meant that our valuation is directly benchmarked against OpenAI. What he was saying is that our project is built with a long-term vision — similar to how OpenAI’s value in Web2 could be translated into Web3. However, our current valuation is obviously not derived from OpenAI’s.
Also, in crypto, many projects have valuations in the $1–2 billion range. Look at Berachain, EigenLayer, and Bittensor, for example.
Colin:
So, are you saying you expect 0G’s valuation to exceed $2 billion? And if it doesn’t, will you take responsibility for that? Because it seems like you’re implying it will.
Ming Wu:
I can’t comment on “future token prices.” What I’m saying is that we raised funds at this valuation — what’s unreasonable about that?
Colin:
Of course, it’s unreasonable. This is a one-year-old project — do you have users? Do you have revenue?
Ming Wu:
This is fundraising. When VCs invest, they don’t look at those factors in the same way. Pricing is open — this is a free market.
Colin:
No, pricing isn’t completely free. Let’s say a VC and I privately arrange a deal to inflate the valuation, and I secretly offer them a massive discount or some kind of under-the-table fee. If that happens, retail investors and the broader community could be misled by this artificially high valuation, and exchanges might also be deceived.
Look at MSN — its last funding round valued it at $1 billion, but now it’s worth only a few million. And interestingly, it was OKX that took the final round.
Ming Wu:
0G has also structured token sales with no lock-ups, allowing retail investors to participate.
Christine:
I don’t think this discussion needs to continue. This is a free market — investors are free to invest, retail traders are free to participate, KOLs are free to promote, and project teams are free to raise funds however they see fit.
Michael and Ming Wu are free to structure their fundraising and valuations however they want. If investors choose to participate, that’s their decision.
Clarification on Investment Amounts, Revenue Model, and Token Commitment Mechanism
Christine:
For retail investors and the Chinese-speaking community, an important issue is that your actual raised capital seems to be only a few tens of millions, far from the $290 million you claimed in PR statements. In your PR, you explicitly stated that you had raised $290 million, which I believe is misleading.
Ming Wu:
No, the PR states that we secured a $290 million “purchase commitment” — this is a structured financial instrument, and it is enforceable.
Ada:
In the PR, we wrote that we received a $290 million commitment from investors, not an actual $290 million investment. Many public companies use similar agreements, where funding is contractually committed but not immediately delivered. This isn’t uncommon. We also had multiple options but ultimately selected this investor.
Colin:
Wait — so a single entity committed $250 million? And at what price will they actually buy?
Ada:
We signed an NDA with them. I can’t disclose details. Also, you might not realize how strict U.S. legal standards are — our law firm is one of the most cautious in the industry.
Colin:
Then let me ask a simple question: What are the conditions under which they will invest real money? If you’re making such a bold PR claim, don’t you owe the community a clear explanation? This is an unprecedentedly large token commitment — under what conditions will they actually transfer funds?
Yuxin:
Yes, the community is naturally curious. A $250 million investment commitment from a single VC is unheard of. How is this structured? What guarantees that they will follow through? You don’t need to go into extreme detail, but can you at least give a general explanation?
Michael Heinrich:
This is an OTC agreement. Here’s how it works:
1. We negotiate a custom deal with an agreed pricing period — typically 5, 14, or 30 days. Ours is set at 14 days.
2. Within this period, pricing is determined using a formula like VWAP (Volume Weighted Average Price) or T-Walk.
3. Based on this pricing model, the specific purchase price for the tokens is set.
4. We can then choose how much capital to draw — $5 million, $10 million, $100 million, etc. The investor guarantees liquidity for our requested amount within the set period.
5. Once the price is determined, the tokens are transferred to them, and they gradually sell in the market, after which they settle payments with us.
Essentially, this is not a single OTC trade but a structured facility that allows us to control the timing and amount of withdrawals.
We structured this deal with Awaken Finance, a firm founded by former New York investment bankers and VCs. They created this model because it’s a more founder-friendly financing structure.
Konstantin:
Just to clarify — I’m not defending the 0G team, but I’ve reviewed your PR statements on CoinDesk and The Block. The wording explicitly states “$250M token commitment via OTC”, which means the funds haven’t actually been received.
There’s also $30M from node sales. So, if people interpreted it as a full $290M capital raise, that may have been a misunderstanding by the media rather than a direct misstatement from 0G. This distinction is worth making.
Christine:
Okay, then let’s assume this was a translation issue in the PR and not intentional misrepresentation.
Colin:
However, your official Twitter says:
> “We announced $290 million in funding.”
It then breaks it down as $40M seed funding and $250M in token commitments, repeating the $325M total multiple times.
This isn’t a media mistake — your team itself used this language. I’ve shared screenshots in the Telegram group for reference.
Michael Heinrich:
The initial tweet was not entirely accurate, because 0G Labs and 0G Foundation are separate entities.
● 0G Labs raised traditional equity funding.
● 0G Foundation secured token commitments.
We could have provided more detail upfront, but the token commitment is real. Investors have already accounted for it on their balance sheets. It’s just a matter of when we decide to draw from it.
Christine:
Since you raised significant funds from investors and KOLs at a high valuation, I’m curious about your revenue model. How do you ensure investors and KOLs don’t end up with losses?
Michael Heinrich:
Our business model is similar to AWS.
● We charge based on storage per TB, usage per month, and request volume.
● If our DA layer reaches full utilization — say, 50GB per second throughput running 24/7 — we could generate billions in revenue per year.
● The key challenge is maximizing the utility of our blockchain space and computing power.
In our view, this can only happen when:
1. AI fully moves on-chain, or
2. Other applications like decentralized storage, gaming, or data markets start utilizing the network.
At that point, we expect to see revenue patterns similar to Amazon’s cloud business. AWS generates tens of billions per year, and we see a comparable long-term potential in this market.
Colin:
Michael, is the $250M token commitment from DWF or another market maker?
Michael Heinrich:
Oh, we would never work with DWF for something like this.
This commitment is from Awaken Finance, the firm I mentioned earlier. They are ex-investment bankers from New York and former VCs who structured this deal.
There are other firms in the space doing similar deals, but we negotiated the best possible terms with them.
Why Professor Yao Is No Longer Endorsing Conflux
Audience Member:
Ming Wu, I remember when Conflux first started in 2018–2019. I attended your launch event back then, and Conflux heavily promoted its connection to Yao Class — highlighting Professor Yao’s technical expertise and the involvement of his students.
Recently, there have been rumors that since several team members left Conflux, Professor Yao has stopped endorsing projects by Yao Class alumni. Can you confirm this? What’s your response to this claim?
Ming Wu:
Let me clarify. I was never particularly close to Professor Yao. Due to his position at Tsinghua, he is not allowed to hold too many external board or shareholder roles. Over time, he stepped down from nearly all external corporate board and shareholder positions, including Conflux.
So, his disengagement has nothing to do with team departures. He remains the Chief Scientist at the Tree-Graph Research Institute, which is a nonprofit entity, meaning there’s no concept of equity or ownership.
Dr. Li Chenxing:
I can confirm that Professor Yao has always been supportive of our work. Even after core team members left, he continued to participate in related activities.
For example, in 2021 or 2022, the Shanghai Tree-Graph Research Institute hosted a blockchain-related forum, and Professor Yao recorded a keynote speech for the event, expressing his support.
I was a student of Professor Yao, and after graduating, I joined Tree-Graph. He has consistently supported what we’re building. So, whether or not he is officially named Chief Scientist or involved in other projects does not mean he has lost confidence in us.
The Fairness of VC-Driven Project Valuation
Christine:
One final question — if 0G wants more community members to participate, why set such a high valuation? Many great projects start with much lower valuations to attract early supporters. Why choose $2 billion instead of, say, $50 million?
Michael Heinrich:
We didn’t set this valuation — it was determined by market demand. People wanted to participate and were willing to pay what they thought was fair. We received strong demand for our rounds.
You could ask the same thing about Story raising at a $200 million valuation, or why companies like SSI — with no revenue — are valued at $20 billion. It’s all about perspective.
If AI is truly going to dominate a large portion of the future economy, then what’s the total global economic value? Tens or even hundreds of trillions of dollars. If AI will power most of the economy, it deserves significant funding. And key societal systems should run on blockchain for verification.
So, in the grand scheme of things, $2 billion is nothing for a company like Microsoft. It’s all about how you frame it.
You could also ask:
● Why is Ripple worth $20 billion despite limited real-world usage?
● Why does Bitcoin have a $1 trillion+ market cap when it’s primarily used as a store of value?
It all depends on how you look at it.
Audience Member:
Sorry to interrupt, but the question isn’t about how institutions perceive valuation — it’s about what it means for the community.
For retail investors, setting such a high valuation is unfair because you could have offered a lower one. Hack VC spent four months doing due diligence, but retail investors don’t have access to that level of information.
There’s a clear information asymmetry between VCs and the community. Why not structure valuation more fairly for community members, instead of letting a few VCs and market makers set the price?
Michael Heinrich:
That’s exactly why we structured the node sale.
If we wanted to take advantage of the community, we could have priced the node sale at a $2 billion valuation from the start. Instead, we did the opposite.
As an advisor to the 0G Foundation, I can say that 0G wanted the community to benefit. That’s why we offered a community round at a lower valuation than VCs.
If you check the node sale pricing, Tier 1 and Tier 2 were only available to our Discord members and selected KOLs, at valuations much lower than $2 billion.
We’re happy to be transparent. We can share the June dashboard, pricing tables, and anything else. The whole purpose of the node sale was to benefit the community.
Audience Member:
But the node sale price was still set by 0G, right?
Sure, when I run a project, I sit with VCs to determine pricing. But the community had no role in pricing — it was purely a top-down decision. That’s the issue.
Michael Heinrich:
So what? If you could buy Solana at a $500 million market cap, would you take it? It’s the same thing.
Gink:
To put it bluntly: “If you don’t like it, short it.”
But personally, I believe project valuation is driven by market demand. If VCs are willing to invest at a high valuation, that’s just how markets work. It’s a free market.
Audience Member:
Yes, but why should a few VCs sit around a table and arbitrarily decide how much the project is worth? The community wasn’t given a say in valuation, and that’s unfair to retail participants.
Improving 0G’s PR Messaging & Team Roles
Christine:
I think the biggest issue with your PR is that it’s unclear and ambiguous. This definitely needs to be revised.
As for revenue, since this is a new project, it doesn’t make much sense to challenge it at this stage. Every project needs time to grow, and if you execute well, success will come.
The main problem here is the PR messaging — it’s hard to explain away the confusion. You might want to issue an official clarification statement to clear things up.
Yuxin:
Right. Ming Wu, what do you think about the PR? Many people have raised concerns about it. Was Ada primarily responsible for publishing it?
Ming Wu:
Yes. You’re referring to the fundraising announcement, right?
Yuxin:
Yes, that one. People felt it could have been written more clearly. The Chinese-speaking community still has questions, so maybe you could address them in a QA session to clarify.
Ming Wu:
Okay, we can adjust that.
Yuxin:
Someone asked whether Yuanjie was involved in the 0G project.
Ming Wu:
Actually, Michael is not just a “figurehead CEO.”
If 0G had been led by Long Fan and me, Yuanjie would likely have been involved. However, Michael and his go-to-market team played a critical role in shaping the project. The decision-making power is in Michael’s hands.
From the team’s perspective, Yuanjie didn’t bring significant value to this specific project, so it was decided that he didn’t need to be part of it. This also proves that Michael isn’t just a “frontman CEO.” He’s not merely a public-facing figure — he is actively leading the project.
Yuxin:
That clears up a lot of confusion. It seems that the team felt Michael was a better fit for an external-facing role, while Yuanjie remained focused on his contributions at Tree-Graph.
Relationship Between 0G Labs & 0G Foundation, Node Revenue, Fundraising Wallets, and Privacy Protection
Yuxin:
Some people are unclear about the relationship between 0G Labs and the 0G Foundation — can you briefly explain?
Ada:
Like many other projects, 0G Labs handles the technology behind 0G, while the 0G Foundation manages ecosystem growth.
Think of it like 0G Labs builds the airplane, while the Foundation manages the passengers and develops the surrounding infrastructure.
Yuxin:
How much revenue has 0G generated from node sales?
Michael Heinrich:
You can check the backend for node sales data. The December analysis report already includes detailed figures.
As of now, node sales have generated approximately $32.846 million.
Yuxin:
Can you disclose the fundraising wallet addresses?
Michael Heinrich:
Disclosing wallet addresses alone doesn’t provide the full picture.
A lot of the funds were raised in fiat through BCS, and there are multiple wallets involved. Each wallet corresponds to different node sales and funding sources, so simply sharing wallet addresses wouldn’t give a complete view.
Zhang:
One last question — about privacy protection.
I’m new to this project, so I’d like to clarify:
● Is 0G focused on model training or inference?
● If it handles sensitive data like health or financial information, how does 0G ensure data privacy?
● Are all 0G servers TE-enabled, or only some?
Ming Wu:
For privacy protection, we use existing privacy-preserving technologies such as:
● TE (Trusted Execution)
● FHE (Fully Homomorphic Encryption)
● MPC (Multi-Party Computation)
Currently, TE technology is our primary focus.
Since our network is decentralized, different computing nodes may or may not support TE.
● Nodes with TE support can process sensitive data securely.
● Nodes without TE must rely on alternative privacy solutions like ZK (Zero-Knowledge) proofs for verifiable computation.
We ensure secure computing services through smart contracts, which govern interactions between service providers and users.
For now, TE is the key technology we’re leveraging for privacy protection.
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