Research | Infrastructure Attracts Attention, Cryptocurrency Industry Financing Report for 2023
Cryptocurrency researcher Thor Hartvigsen has compiled a report on the Web3 industry in recent years. The total fundraising this year is only $5.5 billion, with most projects raising only a few million dollars. However, there are still many infrastructure projects raising over a hundred million dollars.
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Conclusion: Web3 Industry Financing Amounts Significantly Decreased
- Compared to 2021 and 2022, this year's total financing amount for the crypto industry has decreased significantly, reaching only 5.5 billion US dollars.
- DeFi is the most financed sector, but the majority of large-scale financing comes from infrastructure such as Layer1 and Layer2.
- GameFI remains the largest bet for crypto venture capital.
- Seed round financing is the most common in the crypto industry.
- There were only 4 RWA-related financings this year, and a significant increase is expected in 2024.
Summary of Crypto Financing in Recent Years
Crypto Financing Amounts Remain at Only 5.5 Billion US Dollars This Year
In the bull market of 2021, due to the "only rise" market and the low interest rate environment, crypto projects successfully secured an incredible 36 billion US dollars in financing from investors.
However, as the market cooled down, the accumulated financing amount in 2023 was 5.5 billion US dollars, slightly higher than in 2019 and 2020.
a16z is the Biggest Sponsor
The top venture capital firms investing in the crypto industry over the past three years are a16z, Paradigm, and Jump Crypto, with a16z investing over 30 billion US dollars in the crypto market.
Interestingly, the bankrupt 3AC still appears on the list, investing nearly 1.3 billion US dollars, indicating its past influence and leverage in the industry.
DeFi and GameFi Are the Preferred Targets for Crypto Venture Capital
From 2021 to 2023, DeFi projects received 29% of the total financing. Some larger DeFi investments include Li.Fi, M^ZERO, and Radiant.
On the other hand, GameFi is also a popular target for crypto venture capital, with approximately 17% of investments flowing in, but most of it occurred in 2021 and 2022, with relatively fewer related news this year.
RWA is a hot topic that has emerged in the past year. However, fundraising projects in this area are currently relatively niche in terms of both quantity and amount, but more related projects are expected in the future.
Public Chain Project Near Raised the Most Money in Recent Years
Due to the technical development difficulty and capital requirements, public chains usually raise larger amounts of funds, and in the past three years, the networks that raised the most funds are Near, Aptos, and Solana, with Near raising 500 million US dollars in 2022. It can be observed that networks with larger investment amounts are almost always blockchain projects that have generated significant community discussion in the past.
Summary of Crypto Financing in 2023
Only a Few Infrastructure Projects Raised over 50 Million US Dollars
In 2023, a total of 1,957 individual investors conducted approximately 641 rounds of financing for 617 projects, with a cumulative financing amount of 5.58 billion US dollars. Seed rounds of financing were the most common, with 395 projects raising between 1 million and 10 million US dollars.
Infrastructure Continues to Attract Market Attention
Only a few projects raised over 50 million US dollars, and the majority were concentrated in high-tech infrastructure such as L1, L2, and MEV. The top projects in terms of fundraising in 2023 include LayerZero, Worldcoin, Ledger, Flashbots, Scroll, and Eigenlayer.
Prepare for the Digital Sense
In the crypto community, there are often many financing news about projects or teams, usually representing bullishness or important milestones for projects. However, having a comparative reference will help make more accurate judgments about projects, rather than simply treating all fundraising news as the same type of information.
Learning from the past, taking notes or collecting this report will help develop a better sense of the numbers, preparing for the possibility of a returning bull market in the future.