Mastering Web3 Finance: Daniel Lian on Leading Cross-Functional Teams and Building a Healthy Blockchain Business

Mastering web3 Finance: Daniel Lian on Leading Cross-Functional Teams and Building a Healthy Blockchain Business

Our latest installment of our web3 finance series features Daniel Lian: Head of Finance at DYDX Trading. 

Daniel is a finance leader with 12+ years of experience building and leading teams across financial service, travel, e-comm, enterprise SaaS, and—most recently—crypto. 

Today he leads the finance team at dYdX, a leading decentralized crypto exchange on a mission to democratize access to financial opportunity. 

dYdX first launched on Ethereum L1, then migrated to EVM-compatible Starkware, and most recently open-sourced the software for the dYdX Chain, a standalone appchain for trading perpetuals. dYdX “combines the security and transparency of a decentralized exchange, with the speed and usability of a centralized exchange.” 

In our interview, Daniel explained: 

→ The similarities (and differences) between web2 and web3 finance functions 

→ How to lead cross-functional teams as a CFO/Head of Finance

→ The most important task CFOs and Heads of Finance often overlook (and why it's important) 

Daniel launched his career at Citigroup’s NYC office, as a TMT Investment Banker. From there, he worked in corporate development at Expedia, then “made the leap with some college classmates to the startup world.” 

He moved to SF and “joined Lob as employee #10, where I worked as an Ops Manager. Really, though, I did a bit of everything, with a specialty in finance.”

At Lob, Daniel and his team “built APIs for physical mail. During his time there, he watched the company grow from 10 to a little over 200 people, doing over $100M in revenue.” 

During that time, he “kept tabs on crypto, and eventually got into Bitcoin around 2012, and Ethereum in 2017.”

After about 7 years at Lob, he was ready “to work on a new set of problems and challenges. I’d gotten super interested in crypto, and realized the best way to understand the industry would be to work in it.” 

He started applying to crypto finance jobs and eventually found dYdX: “It was a total black box, but I dropped in my resume, they reached out, and I’ve been here ever since…about a year and a half. Sometimes literally just knocking on the front door will get you in.” 

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Understanding the similarities—and differences—between web2 and web3 finance orgs.

Daniel joined dYdX as employee “40-something, the first finance hire. My initial mandate was to build out everything on the finance side. Prior to me, they had an Ops/BD guy managing it with outsourced external accountants.” 

Reflecting on his time in SaaS and his work in crypto, Daniel explained that “there are tons of similarities: you need to get your books in order…get visibility into all your  transactions so you can accurately report them and understand your money in/out flows to protect your runway.” 

That’s why, after he joined dYdX, “the first thing I did was bring accounting in-house. I hired an accounting lead because I knew my background wasn’t in accounting.”  

The principle here: “Recognize where you may have gaps and make sure that you're building your team around where you're weaker.” 

In terms of differences, Daniel explained that “token compensation and the tax/accounting day-to-day often look different than they would at a web2 org.

Employee token compensation, for example, might seem simple in concept, but it's actually incredibly complex to execute. There’s also more to do at a crypto startup to stay on top of accounting and tax compliance due to the general ambiguity of current guidance and the still-evolving nature of regulation and reporting requirements. There’s more gray area that you have to navigate.” 

The best thing you can do?

“Find trusted partners and advisors—tax, legal, accounting firms—who can provide the right advice when you need it. Learn to lean on them”

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Leading cross-functionally as a Head of Finance or CFO 

One of finance’s most important roles, Daniel explained, is to handle “get your reporting right. Without the right inputs, you can’t report accurately or manage your business. You’ll make misinformed strategic decisions.” 

But after that, it's important to “step back and think: ‘Okay, I have all this data, but does it mean? What levers can I pull to (potentially) improve our trajectory as a business? How can I partner with other departments to do that?” 

This Layer 2 strategic thinking always involves collaborating with other teams—a point Daniel emphasized repeatedly in our interview as something CFOs and Head of Finances must excel at. 

In his words: 

“Those other departments actually build your product or sell it to customers. One of the biggest value-adds you can bring as a finance person is actually understanding their business and their language.

Your role isn’t just to manage money or move it around. It’s also about empowering others to make better decisions by understanding the ROI of their investments—whether that’s head count, budget for software, or any other initiatives. 

Get involved with your product, recruiting, and marketing teams to really helping them understand the efficacy of what they’re building." 

Daniel works to put this into practice at dYdX:

He spent time “strategizing with our talent recruiting team on ways to improve pipeline passthrough rates… and our marketing team to expand our brand in the most cost-effective way.”

That meant thinking through questions like, “If we spend this money, what can we expect out of it? Is that impactful for us? Why or why not?” 

Often, he admitted, “there’s not always a clear-cut numerical answer, but as a finance person you can draw lines to start delineating success vs. failure and framing the conversation in a more objective way.” 

He also believes it's important for finance to “speak the same language, across teams.”

If you’re trying to communicate finance topics—don’t use “accounting and finance jargon. If you’re Slacking someone from another team, put your points into words they can instinctively understand. Then distill all the content into a bottom line or key takeaway that’s easy for others to decipher.” 

Also, he continued, “get as much product knowledge as you can. Understand the product and your target customer. Don’t stay in the finance rabbit hole, but make sure you spend tons of time understanding the product itself.” 

Crypto can be a hyper-technical industry, so it's even more important to spend time understanding as much as you can about the product: 

"The more you understand the product and its nuances, the more you can contribute as more than just a stand-alone finance person. That product understanding helps you better think through your counterpart’s problems and what they’re trying to solve, so you can help them better."

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How to identify financial hires who work well across teams 

Daniel outlined a few qualities to look for when hiring finance operators who can collaborate cross-functionally: 

“First—have they done it in the past? Do their references signal that they have a problem with the ability to lead a team?”

Also, “make sure they can present ideas in a logical, linear way. You can typically decipher this early on during the interview process. It’s all about communication—how clearly they speak, how confidently they present themselves.” 

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How—and why—finance leaders should develop product sense

When Daniel joined dYdX, he explained that his “role was relatively standard. I tackled things like getting our books in order, putting a financial forecast together, and ensuring we had enough runway. Generally, that work was similar to web2..”

Those tasks didn’t necessarily require deep product knowledge to execute, but, after those first 5 months, Daniel explained that he “started expanding my work to understand other parts of the product and business.” 

He worked closely with dYdX’s BD and marketing team, and “basically ‘managed’ them for a time. During that time, even though I was technically their ‘manager,’ I learned so much from them. For example: I saw how the BD team builds such close relationships with market-makers. Seeing those conversations, I began to understand the order-book architecture, and that led me to dig into the documentation that our team had compiled to understand how the actual protocol worked.” 

During that time, Daniel spent time reading the documentation and getting up to speed on the tech stack and consensus mechanisms. For him, that meant “reading, asking questions, and proactively engaging with the engineers, product team, or the BD/marketing team to understand what they’re building and what they care about.”

One of the main lessons from that time: 

“Get yourself into the conversations where you might not be the first one others think about including, but where you can listen and learn.

From that time, I have a much better understanding of the technical elements of our product than I did 6 months ago. It's a constant learning process."

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Building solutions that unite crypto and fiat finance tools  

This is Daniel’s first foray into professional crypto, and his first time working at a decentralized ecosystem. 

When we asked about what he’s “most excited about over the next few years,” he mentioned how he’s “excited to see how the broader industry and the dYdX ecosystem evolve. Other companies and entities contribute to the broader dYdX project, and seeing how these organizations work together has been a big learning for me. I want to see our work develop—and further decentralize.”

Tactically, he’s “excited about the tools that will continue to evolve for web3 finance—whether they’re token vesting and management tools (like Liquifi), custody solutions, or accounting sub-ledgers. There’s so much being built right now, and we’re still very early.

I don’t think we’re on par with the quality of traditional web2 tools—yet. It’s not enough to have just a crypto-only experience that’s at parity because many finance orgs—including ours—still deal primarily with fiat…we need to make the transition from crypto to fiat seamless, and that means developing our tooling that better bridges that gap. Personally, I trust that in the next 3-10 years, a lot of today’s pain points will be addressed in a much more elegant way.” 

We’re grateful to feature Daniel on our web3 finance leadership series! And we’re excited to share more about the work he’s doing at dYdX.

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To connect with Dan, follow him on LinkedIn, or on X @dmanlian.