Funding: Ethereum re-staking, DePIN, Bitcoin ecosystem, and RWA tokenization drive cryptocurrency VC trends.
Cryptocurrency venture capital funding has seen a notable resurgence this year, with investors plowing more than $4 billion into startups. In particular, investment activity increased in four areas: Ethereum re-staking, Decentralized Physical Infrastructure Network (DePIN), Bitcoin ecosystem, and Real Assets (RWA) tokenization.
Ethereum re-staking, a relatively new industry, has seen significant growth this year thanks to the pioneering protocol EigenLayer.
EigenLayer facilitates the re-staking of Ethereum (ETH) and liquid staking tokens through validators on other blockchain networks, allowing users to earn additional rewards. In less than a year, the protocol has amassed nearly $15 billion worth of assets. EigenLayer’s success has led to the launch of several EigenLayer-based securitization redeposit platforms, which collectively have secured more than $9 billion in assets.
All three major Ethereum liquid redemption protocols based on EigenLayer (Ether.Fi, Renzo, and Puffer Finance) have raised funding this year. Last February, Ether.Fi raised $27 million in funding co-led by Bullish and CoinFund. Puffer Finance raised an $18 million Series A round co-led by Brevan Howard Digital and Electric Capital in April, pushing its valuation to $200 million, as exclusively reported by The Block at the time. Meanwhile, Renzo raised $3.2 million in seed funding led by Maven11 in January and was valued at $25 million at the time. Puffer and Renzo recently received additional funding from Binance Labs.
Second, DePIN projects, especially those operating on the Solana blockchain, are gaining attention. Several DePIN projects, including Io.net, peaq, IoTex, Natix, and SendingNetwork, have all raised funding in recent months. Io.net, for example, reached $1 billion in token value in March, two sources told The Block at the time. The DePIN project leverages blockchain technology to decentralize physical hardware infrastructure and incentivize users with tokens to expand the network. As of April this year, approximately 70 projects had raised a total of $192 million in the DePIN and Decentralized Artificial Intelligence (DeAI) categories, according to The Block Pro’s funding dashboard.
The Bitcoin ecosystem is also rapidly expanding, and investment activity in network-based startups is increasing. According to The Block Pro’s Funds Dashboard, there have been more transactions involving the Bitcoin ecosystem so far in 2024 than in all of 2023. That means there have been 81 transactions to date, compared to 77 in 2023.
Finally, the tokenization category is also gaining popularity, with several startups in this space securing funding in recent months, including Securitize, Centrifuge, and Backed. As of April this year, more than 25 tokenization-related startups had raised a total of $80 million, according to the dashboard.
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Disclaimer: The Block is an independent media outlet delivering news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information about the cryptocurrency industry. Below are our current financial disclosures.
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.
