06 May, 2024

Ethereum Restaking, DePINs, Bitcoin Ecosystem and RWA Tokenization Lead Crypto VC Trends

Quick TakeThis is an excerpt from the inaugural edition of The Block’s The Funding newsletter sent to our loyal readers on May 3.The Funding is a fortnightly newsletter written by Yogita Khatri, The Block’s longest-serving editorial member.Ethereum restaking, DePINs, Bitcoin ecosystem and RWA tokenization lead crypto VC trendsCrypto venture capital funding has seen a notable resurgence this year, with investors injecting over $4 billion into startups. Four areas, in particular, have witnessed increased investment activity: Ethereum restaking, DePINs (decentralized physical infrastructure networks), the Bitcoin ecosystem, and RWA (real-world asset) tokenization.Ethereum restaking, a relatively new vertical, has grown substantially this year thanks to its pioneering protocol, EigenLayer.EigenLayer facilitates the restaking of ether (ETH) and liquid staking tokens with validators in other blockchain networks, enabling users to earn additional rewards. In less than a year, the protocol has accumulated nearly $15 billion worth of assets. EigenLayer's success has spurred the launch of several EigenLayer-based liquid restaking platforms, which have collectively garnered over $9 billion in assets.All three leading EigenLayer-based Ethereum liquid restaking protocols — Ether.Fi, Renzo and Puffer Finance — have raised funding this year. In February, Ether.Fi raised a $27 million round co-led by Bullish and CoinFund. Puffer Finance followed suit with an $18 million Series A round in April, co-led by Brevan Howard Digital and Electric Capital, bringing its valuation to $200 million, as reported exclusively by The Block at the time. Renzo, meanwhile, raised $3.2 million in seed funding led by Maven11 in January, valuing it at $25 million at the time. Both Puffer and Renzo received additional funding from Binance Labs recently.Secondly, DePIN projects are gaining traction, particularly those operating on the Solana blockchain. Several DePIN projects, including Io.net, peaq, IoTex, Natix, and SendingNetwork, have all raised funding in recent months. Io.net, for instance, reached a $1 billion token valuation in March, two sources told The Block at the time. DePIN projects leverage blockchain technology to decentralize their physical hardware infrastructure and incentivize users with tokens for expanding their networks. As of April this year, around 70 projects have collectively raised about $192 million across the DePIN and DeAI (decentralized artificial intelligence) categories, per The Block Pro's Funding Dashboard.The Bitcoin ecosystem is rapidly expanding, too, with startups building on the network witnessing increased investment activity. So far in 2024, there have been more Bitcoin ecosystem-related deals than in all of 2023 — 81 deals year-to-date compared to 77 in 2023 — according to The Block Pro's Funding Dashboard.Last but not least, the tokenization category is also gaining popularity, with several startups in this vertical — including Securitize, Centrifuge and Backed — all securing funding in recent months. Over 25 tokenization-related startups have raised a total of $80 million this year as of April, according to the dashboard.

30 Apr, 2024

Stablecoin Transaction Volume Surpasses Visa's 2023 Monthly Average

Quick TakeTransaction volume in the past 30 days for Tether, USDC, and DAI, has surpassed Visa’s 2023 monthly average, according to Nansen.Crypto's three largest stablecoins — Tether, USDC and DAI — have seen higher volumes in the past 30 days than Visa’s average monthly total from last year, according to onchain specialist Nansen.Nansen data showed that the largest stablecoin by market capitalization, Tether, processed $654 billion in the past 30 days, while DAI managed over $394 billion of flows and USDC saw $321 billion in trading volume."The total for the three at $1.369 trillion is higher than the monthly average for market leader Visa in 2023," said Nansen. That compares to $1.23 trillion, the monthly average of Visa's yearly $14.8 trillion volume in 2023.Nansen’s data showed that Tether alone processed nearly as much in monthly volumes as Mastercard, the second largest card provider in the world. Mastercard’s monthly average volumes were $750 billion in 2023, totaling $9 trillion for the year. Data showed that Tether also outstripped PayPal, which managed $125 billion on average each month last year. USDC takes lead in stablecoin transactions, Visa claimsIn an April report, Visa claimed that Circle’s USDC should be classed as the leading stablecoin in terms of transactions volume.Visa said it cleansed stablecoin transaction data of inorganic activity and only counted the largest stablecoin amount transferred within a single transaction to show USDC surpassing its market contenders.According to the report, the removal of bot activity, complex smart contract interaction and automatic transactions from centralized exchanges, saw USDC transaction volume surpass that for USDT on a weekly basis. "Only transactions that have been sent by an account that has initiated less than 1,000 stablecoin transactions and $10 million in transfer volume, over last 30 days, are counted. This removes various bot activity as well as automatic transactions from large entities like centralized exchanges," the report said.