Venture capital investments in the cryptocurrency market have experienced an uptick in the first quarter of 2024, after a disappointing showing last year amid the crypto winter of 2022. Increasing VC involvement also raises hopes that the sector has finally woken up from its dull state for over a year.
As per data from Chainalysis, Q1 2024 was the first fiscal quarter to see a quarter-over-quarter increase in crypto-related investments since early 2023.
Last year’s sharp decline in capital raised for crypto initiatives was marked by the collapse of major players in the industry, including FTX, BlockFi, Terraform Labs, and Celsius.
In Q1 2024, VC volumes in crypto projects are nearing the $2.5 billion mark and are projected to surpass last year’s grand total of $9.5 billion in capital raised. Venture capitalists are investing in a wide range of initiatives in the crypto space, from decentralized social media platforms to staking protocols and Layer-1 blockchains to modular blockchain projects.
In this article, we have listed the top 10 venture capital investments in 2024 so far. Note that this article is adjusted to events that have taken place in the market before April 30th.
So, which crypto projects have been the biggest winners of VC funding so far this year? Let’s find out.
1. Monad Labs ($225 Million)
Monad Labs is developing a Layer-1 blockchain dubbed Monad that aims to combine the best of Ethereum (ETH) and Solana (SOL). The Ethereum Virtual Machine (EVM) compatible blockchain will deploy a parallel execution system like Solana that will achieve higher scalability and faster transaction speeds while taking advantage of Ethereum’s interoperability and security.
In April, Monad Labs announced that it had raised $225 million in a funding round by VC firm Paradigm, and participated by Electric Capital, Wintermute Ventures, and Animonica Ventures among others.
2. Eigen Labs ($100 Million)
Eigen Labs is building two Ethereum-based products, a token staking protocol called EigenLayer and a data availability solution called EigenDA. On the EigenLayer, ETH stakers can re-stake their liquid staking tokens like stETH and rETH.
Eigen is considered to be one of the largest decentralized applications (DApp) on Ethereum with a total value locked (TVL) of an estimated $15 billion. It is second only to the leading liquid staking protocol Lido (LDO).
In February, Eigen Labs announced that crypto VC giant Andreessen Horowitz (a16z) invested $100 million to fund the Web3 firm’s latest projects.
3. Berachain ($100 million)
Berachain started life as an NFT collection called Bong Bears in August 2021. However, in 2022, the project pivoted to launching an L1 blockchain. According to its pseudonymous co-founder Smokey the Bera, Berachain will be powered by a variant of the delegated proof-of-stake consensus mechanism known as the Proof of Liquidity (PoL).
Last month, the Cosmos-based Ethereum-compatible blockchain raised $100 million in a Series B funding round led by Brevan Howard Digital and Framework Ventures. The round was participated in by Polychain Capital and Haskey Capital, among others.
4. Freechat ($80 Million)
Freechat is a blockchain-powered social media platform where users are offered complete control over how their data is used and shared. The platform is also censorship-resistant, thereby upholding the values of freedom of speech.
Some key features of Freechat include an AI algorithm called Freechat AI and its use of machine learning (ML) for content moderation and personalization of user experiences.
In January, the Hong Kong-based company announced that it raised $80 million in a Series A funding round. However, the group did not disclose the names of investors who were involved.
5. IO Research ($30 Million)
IO Research is developing a Solana-based decentralized physical infrastructure network (DePIN) called ‘io.net’ that aims to provide permissionless access to graphics processing units (GPU) capacity.
In March, the AI-focused blockchain startup announced that it raised $30 million in a Series A funding round led by Hack VC, with participation from other venture capitalists, including Multicoin Capital and Delphi Digital.
6. Avail ($27 Million)
Avail is a Polygon-based modular blockchain that is working on developing a set of protocols, such as the data availability layer called Avail DA, an interoperability-focused rollup called Avail Nexus, and a security rollup called Avail Fusion.
The team behind Avail network believes the blockchain will use these solutions to power “hundreds of chains”, each with its own security and interoperability layers.
In February, Avail announced that it raised $27 million in a seed round led by Dragonfly Capital and Peter Theil’s Founders Fund.
7. Ether Finance ($27 Million)
Ether Finance, also known as Ether.fi, is a newly launched staking protocol on Ethereum that enables users to stake their ETH and automatically restake it on EigenLayer. ETH stakers get eETH in return, which can be used to earn staking rewards on Ethereum and EigenLayer, as well as loyalty points.
At the time of writing, the project has a TVL of $3.95 billion.
In February, the liquid staking solution announced that it raised $27 million in an investment round led by Bullish and CoinFund. Other notable participants in the deal were VCs Amber, OKX Ventures, and Bankless Ventures, among others.
8. Polyhedra Network ($20 Million)
Polyhedra Network is developing a zero-knowledge (ZK) interoperability protocol called the zkBridge, which will be capable of facilitating over 20 million cross-chain transactions between 25 different blockchain networks.
In March, the company announced that it raised $20 million in a strategic funding round led by Polychain Capital with participation from Animoca Brands, Hashkey Capital, and UoB Ventures, among others.
Polyhedra Network’s valuation currently stands at $1 billion.
9. Ethena Labs ($14 Million)
Ethena Labs is developing an Ethereum-based protocol called Ethena that will allow market-making counterparties to mint the synthetic US-dollar-denominated stablecoin USDe.
The stablecoin will be backed by staked Ether and Bitcoin (BTC) while its dollar peg will be maintained through the use of delta hedging derivatives positions against the collateralized ETH and BTC.
In February, the crypto startup announced that it raised $14 million in a seed extension round led by DragonFly Capital.
10. Blockchain.com ($110 Million)
Crypto exchange and wallet service provider Blockchain.com closed a $110 million Series E funding round in November 2023 that was led by UK-based venture capital firm Kingsway Capital with participation from Baillie Gifford, Lakestar, and Coinbase Ventures, among others.
Conclusion:
Venture capital investments making a comeback is a positive sign for the overall cryptocurrency market. With decentralized social media, re-staking protocols, ZK rollup technologies, and AI-powered projects becoming popular, we can look forward to more VC funds flowing into the niche market.
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