Han Feng, independent researcher at Harvard: A true stablecoin should be similar to BTC and not rely on traditional finance

Deng Tong, Jinse Finance

In 2025, topics such as AI Agent and stablecoins have sparked widespread discussion, and the recent fluctuations in the crypto market have once again drawn broad attention. In light of this, Jinse Finance invited an independent researcher from Harvard University, a Corresponding Academician of the National Academy of AI in the United States, and the first angel investor in ELA for an exclusive interview. Han Feng discussed the differences between this crypto cycle and previous ones, which sector's crypto narrative may explode in the future, the market trend, and introduced the bitcoin stablecoin BTCD.

Han Feng pointed out:

• This cycle is substantially different from previous ones. BTC has truly entered the ranks of mainstream assets, displaying the price movement patterns of mainstream assets.

• I am more optimistic about the future narrative of AI Agent. Only when crypto assets are combined with AI agents will the economic value envisioned by Satoshi Nakamoto be fully realized.

• A true stablecoin should be like BTC, not dependent on the traditional financial system.
  

• I do not believe the crypto market has turned bearish. In my view, the more chaotic the situation, the greater the development space for digital assets represented by BTC.

Jinse Finance: As a crypto OG with many years of experience, having gone through multiple crypto cycles, what is your biggest impression of this cycle?

Han Feng: This cycle is substantially different from previous ones. First, this bull market was driven by the entry of large American funds. In the past, bull and bear transitions were driven by internal rules of the crypto space and directly related to large-scale retail liquidity: increased liquidity meant a bull market and rising asset prices. Especially in 2017, even tokens with no value were rising. However, liquidity would dry up due to industry black swan events. For example, in 2014, about 850,000 BTC were stolen from Mt.gox; in 2022, the FTX collapse, etc., directly shook market confidence, and the resulting liquidity crunch led to a bear market.

The hallmark of this bull market was the approval of the BTC ETF. Subsequently, Trump’s return to the White House and a series of policies provided sustained momentum for this bull market. The entry of mainstream financial forces into the crypto field is now an indisputable fact, and their participation has made BTC less volatile. Even though the market has been sluggish in recent days, BTC has only dropped by about 20%, whereas in the past, the decline might have reached 50%. Perhaps in another 40 days, BTC could reach a new all-time high. Although BTC is not yet as stable as gold, it is much more stable than before.

Secondly, the factors determining this bull market are much more complex than before. Previously, you only needed to look at crypto liquidity, but now you have to pay attention to the Federal Reserve’s attitude toward crypto assets; the stance of listed companies and mainstream funds toward crypto assets; and even international situations. BTC has truly entered the ranks of mainstream assets, displaying the price movement patterns of mainstream assets. Therefore, I believe this bull market will last longer, the bear market will arrive more slowly, and crypto assets are already in a brand-new stage of development.

Jinse Finance: Crypto narratives are constantly changing, from ICO, ETH Killer, DeFi, GameFi, Memecoin, L2, BTCFi, stablecoins, RWA, DAT, etc., many of which have been disproven. What is your view on these crypto narratives? Which ones do you favor?

Han Feng: The crypto space has had a Meme attribute since its inception. Take BTC as an example: traditional investors used to generally believe it was a Ponzi scheme with no real value backing it. In the early days, liquidity and market sentiment were the main factors influencing the market. This also explains why investors flocked to many projects even if they were pseudo-concepts. But now, BTC has entered the level of a US national strategic asset reserve, completely leaving behind its wild early days. Although many industry themes once had Meme attributes, the process of experimentation has been extremely valuable.

I am more optimistic about the future narrative of AI Agent and believe that AI will have self-awareness in the future. In a few years, AI’s behavior may not necessarily be controlled by humans, but it will definitely be open and transparent. We can regard BTC as the simplest intelligent agent economy. The BTC network itself uses BTC to buy computing power, pay miners for bookkeeping, and maintain the overall network operation. In this way, the BTC network has anti-tampering and other functions. Although the BTC network consumes more energy than many countries and has been criticized for it, it has created over $2 trillion in value, surpassing the GDP of most countries in the world. Clearly, it still has greater room for growth.

An economy that is fraud-free, can operate automatically, and is highly efficient will eventually surpass humanity’s current $105 trillion GDP. Satoshi Nakamoto’s bitcoin white paper explains how to create a global free economic model, and only when combined with AI agents will the economic value envisioned by Satoshi Nakamoto be fully realized. Although it is still on the way and has experienced failures, it will eventually succeed. This is my most fundamental view of the future development prospects of the crypto field. The BTC-based stablecoin we issued at Harvard will further provide the basic conditions for the large-scale development of the AI agent economy.

Jinse Finance: You recently proposed the bitcoin stablecoin BTCD solution. Can you explain its specific mechanism and use cases? How is it different from common stablecoins like USDT?

Han Feng: USDT was created to allow crypto liquidity to be directly reflected on-chain. Currently, the liquidity of major exchanges is mainly reflected in traditional stablecoins such as USDT and USDC, so the advent of stablecoins is extremely significant for the entire crypto industry.

But the revolution brought by USDT and USDC is only half complete. Compared to traditional currencies, there is no technological innovation, only conceptual innovation. According to Satoshi Nakamoto’s original doctrine, a true stablecoin should be like BTC, not dependent on the traditional financial system. The concept I proposed has been widely recognized by people at Harvard, so I applied for project incubation at the Harvard Innovation Center and began exploring NBW (New Bretton Woods System).

Under the original Bretton Woods system, the US dollar was pegged to gold, which can be understood as the dollar being the earliest stablecoin for gold. The US dollar made important contributions in the first round of global trade globalization, and its good performance made everyone believe in the dollar. But in 1971, the two decoupled, and later a global debt crisis emerged.

The New Bretton Woods System we propose is a truly hard currency-pegged, non-arbitrarily issued, free global currency system. We unanimously believe that BTC is the only choice. It is clearly no longer just a financial experiment; its scale is already larger than most listed companies and countries, and its future prospects will surpass gold and become a hard currency.

A BTC-based stablecoin is a completely decentralized financial asset that does not rely on the existing banking system. There are several challenges here:

First, the BTC mainnet does not have smart contracts. Stablecoins such as Maker DAO’s DAI, Circle’s USDC, and Tether’s USDT all require smart contracts. In 2023, we hoped to build Layer 2 on BTC, that is, to implement smart contracts via BTC Layer 2, but it was very difficult because BTC and ETH smart contracts are incompatible. Therefore, starting last year, we decided to abandon the concept of smart contracts and focus mainly on the BTC mainnet.

We noticed that the BTC mainnet has timestamps and can lock BTC, which creates the prerequisite for anchoring. Therefore, we first lock BTC on the mainnet through a protocol, and then use zero-knowledge proofs to prove the locked state to smart contracts on other chains, which is equivalent to staking assets in other contracts.

Secondly, stablecoins issued via smart contracts like Maker DAO have a liquidation mechanism. Maker DAO was the first to try this; its logic is simple: once the crypto asset falls below a certain price, a forced liquidation mechanism is triggered.

Although everyone eventually accepted the stablecoin it issued, the forced liquidation mechanism is extremely unfriendly to users. In addition, since the BTC mainnet does not have smart contracts, forced liquidation is not possible. Therefore, when designing BTCD, I was the first to propose abandoning the concept of forced liquidation.

As an alternative to the liquidation mechanism, we proposed the idea of buying hedging contracts in advance. According to our observations, BTC has not fallen by 50% within 90 days in the past three years. With BTC prices now relatively stable, I can buy 50% options and collect a 1%-2% insurance premium in advance. Even if BTC is halved, I can profit from the hedged BTC futures, which can replace the traditional forced liquidation method. If depegging occurs, this money can be used to buy back the stablecoin.

Under this concept, we replaced the forced liquidation mechanism with BTC futures, and after the 1011 major crash, BTCD is still running smoothly.

Jinse Finance: Since October 11, the crypto market has continued to decline, and many people believe the crypto market has turned bearish. As an OG, what is your view?

Han Feng: I do not believe the crypto market has turned bearish. If we judge by traditional crypto indicators, once liquidity dries up, it turns bearish, so it does look like we are entering a bear market. But now, we must consider not only crypto liquidity and market sentiment, but also international situations. The reason for the current crypto market decline is the chaotic international situation.

I believe that the more chaotic the situation, the greater the development space for digital assets represented by BTC.

Jinse Finance: In addition to narrative and technology-driven factors, the crypto market is also affected by macro factors such as regulation and Federal Reserve monetary policy. What is your view on the current global regulatory environment and macroeconomic factors?

Han Feng: With mainstream funds entering the market, events such as Federal Reserve interest rate cuts will have an increasing impact on the crypto space. Although regulation remains strict in some regions, “the green hills cannot block the river, it will eventually flow eastward.” In the current relatively chaotic international situation, stablecoins issued based on BTC will play an important role: traditional USDC, USDT, etc., are based on the US dollar. Once the US imposes financial sanctions, they cannot be used normally, but stablecoins based on BTC can remain unrestricted.