This Week in Crypto Venture Capital: DeFi, Network Scalability and Web3
The venture capital landscape continues to see flows into projects tackling core challenges in the crypto space, with over $115m invested last week.
This weekly wrap of crypto funding dives into the latest notable funding rounds, which were DeFi, Network Scalability and Web3.
Category | Project | Money Raised this Round |
|---|---|---|
AI | 8,500,000 | |
Codatta | 2,500,000 | |
6,000,000 | ||
DeFi | 17,000,000 | |
Ava Protocol | 10,000,000 | |
Qiro | 1,200,000 | |
Reposwap | ||
Symbiotic | 5,800,000 | |
Gaming | 9,500,000 | |
Pixelverse | 5,500,000 | |
Yuliverse | 4,000,000 | |
Layer 1 | 13,000,000 | |
Nuffle Labs | 13,000,000 | |
Rollups | 25,000,000 | |
Nexus Laboraties | 25,000,000 | |
Trading | 4,000,000 | |
Holdstation | ||
Upbots | 4,000,000 | |
Wallets | 12,000,000 | |
Squad Labs | 10,000,000 | |
Zyfi | 2,000,000 | |
Web3 | 26,300,000 | |
Bondex | ||
Irys | 8,900,000 | |
Layer3 | 15,000,000 | |
Skytopia | 2,400,000 | |
X-to-Earn | 2,400,000 | |
Stage | 2,400,000 | |
Grand Total | 117,700,000 |
The DeFi space continues to see strong investor interest.
Ava Protocols approach to streamline transactions across the Ethereum and Polkadot blockchains involves a two-step process – trigger and execution – that autonomously links different blockchains. This funding indicates the significance of ongoing efforts to empower developers to improve crypto transactions with intelligent automation, enhanced privacy, effortless composability, and significant cost savings. The enhanced automation benefits developers, DeFi traders, gaming projects, NFT artists, real-world asset applications, and users of practically any web3 vertical.
Symbiotic aims to establish a flexible framework for networks to customize their restaking implementations. Their permissionless and adaptable approach distinguishes them from competitors like EigenLayer by supporting a wider range of ERC-20 tokens beyond just ETH and staked Ether derivatives, expanding the possibility for more efficient restaking strategies.
Funding was led by prominent crypto investors Paradigm and Cyber.Fund.
Network scalability continues to remain a key challenge in the blockchain landscape
Nuffle Labs, a spin-off entity founded by veterans of the NEAR network development team, received $13 million in funding to tackle this issue. Their focus lies in enhancing the NEAR ecosystem by:
Expanding Capacity: Nuffle Labs is developing rollup solutions that function as additional lanes on the NEAR highways, enabling smoother information flow during peak usage periods.
Interoperability: They are also building bridges between NEAR and other blockchain networks, such as Ethereum, to facilitate seamless data exchange across different systems.
Nexus Laboratories received $25m in funding and is another project seeking to address scalability concerns, leverages advanced cryptography to build trust online. Funding was led by Lightspeed Venture Partners and Pantera Capital. Nexus Labs will focus on:
Combating Trust Issues: Current online interactions often involve sharing personal data without transparency on its usage or access. This raises privacy and security risks.
Zero-Knowledge Proofs (zk-proofs): Nexus Labs utilizes zk-proofs, a cryptographic technique that allows proving the truth of a statement without revealing the underlying details. Imagine proving you're over 21 at a club without showing your ID – zk-proofs function similarly.
Verifiable Computation: Their ultimate goal is to establish a system called verifiable computation, enabling computers to perform calculations on your data while keeping the data itself confidential. Think of it as a locked box – you place your data inside, computations are performed, and the results are returned without the box ever being opened.
Benefits of Verifiable Computation: This approach offers significant advantages:
Enhanced Privacy: User data remains confidential.
Improved Security: Even if the system is compromised, data remains secure.
More Trustworthy Interactions: Users can be assured of accurate computations without sacrificing privacy.
Web3 Investment Heats Up
The Web3 landscape continues to attract significant investor interest, with two notable projects securing funding for solutions addressing key industry needs.
Irys, a Web3 project focused on data provenance, successfully raised $8.9 million in funding. Their unique platform empowers users to efficiently manage permanent data storage while guaranteeing its origin. Data stored on Irys boasts two crucial characteristics:
Censorship Resistance: Information stored on the Irys platform is immune to censorship attempts.
Immutability: Once recorded, data cannot be altered or tampered with, ensuring its authenticity.
In today's digital world, where discerning real from fake can be increasingly challenging, Irys' solution offers a compelling value proposition. The ability to establish and verify the true origin of data empowers users to make informed decisions and fosters trust within the Web3 ecosystem.
Layer3, another prominent player in the Web3 space, secured $15 million in funding led by renowned investors such as ParaFi and Greenfield Capital. Their project centers on an omnichain identity and distribution protocol, designed to create a mutually beneficial cycle for both crypto users and projects.Layer3's protocol facilitates a "flywheel effect." Crypto consumers can leverage the platform to discover promising new projects, while projects can reward users for their active participation on the blockchain (on-chain activity).
The Layer3 funding announcement underscores the growing importance of "Quests" within the crypto space. Quests are a popular engagement tool that incentivize genuine community members through rewards such as airdrops and other benefits. This funding suggests that Quests will likely remain a core activity for crypto users seeking to unlock valuable opportunities within the Web3 ecosystem.
Conclusion
This weeks VC funding indicates continued growth and maturity across DeFi, Network Scaling and Web3 as mentioned above. The projects mentioned in this article demonstrate a moderate to strong belief that these projects will be necessary to build out the next stage of the crypto ecosystem. While AI and Gaming projects where down from previous weeks, the amounts invested over the past year in these sectors could indicate a breather is necessary.
A central focus of investor activity in the cryptocurrency space is the evaluation of new crypto projects to invest in, particularly those with huge potential. This blog provides insight into what new ventures are benefiting from venture capital support (VC funding in crypto). These new crypto projects, funded by professional investors, can dictate the next narrative in crypto and the next big crypto movers.
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