Most Funded Crypto Projects

Most Funded Crypto Projects for 2024

As of August, crypto startup funding has totaled $5.25 billion across 494 publicly disclosed rounds. The five most funded projects—Monad, Farcaster, Berachain, EigenLayer, and HashKey—have collectively secured $675 million.

Venture capital funding is crucial for crypto projects as it provides the financial resources needed to develop the necessary software (and sometimes hardware) to push the boundaries of Web3. Additionally, high-profile VC backing comes with a marketing boost and often opens doors to more partnership opportunities. For retail, it's an opportunity to scalp which narratives might explode.

‍

1. Monad

Monad Labs secured a $225 million funding round led by Paradigm, with participation from Coinbase Ventures, Electric Capital, and others. The funding is currently being used to scale their team and transition Monad, a Layer 1 blockchain compatible with the Ethereum Virtual Machine (EVM), from testnet to production. Monad’s innovative approach includes a rewritten EVM with parallel execution and superscalar pipelining, promising to increase transaction speed to 10,000 TPS.

Monad isn’t the first Layer 1 blockchain targeting the limitations of Ethereum’s scalability; previous "Ethereum Killers" like Solana, Aptos, and Sei also promised ultra-high TPS. Recently, Monad announced the "Madness" series, where projects can compete for a $1 million prize in a pitch competition judged by representatives from over 60 VC firms. Monad is particularly excited about projects focused on payments, prediction markets, sports betting, SocialFi, and gaming protocols.

‍

2. Farcaster

Farcaster raised $150 million in a Series A funding round led by Paradigm, boosting its valuation to $1 billion, earning it "unicorn" status. The decentralized social media platform, built on Ethereum and Optimism, aims to grow its user base and developer community. Since going permissionless, Farcaster has seen a 82x increase in network activity, with 654,000 users and hundreds of developers building on the protocol.

The platform’s unique "Frames" feature allows for seamless app integration within posts, enhancing user interaction without leaving the platform. With this funding, Farcaster plans to expand its features and hire additional engineers, positioning itself as a key player in Web3. The SocialFi project has already attracted notable figures like Ethereum co-founder Vitalik Buterin and ex-Coinbase CTO, Balaji Srinivasan as stable daily users on Warpcast, Farcaster's flagship social media.

‍

3. Berachain

Berachain, an EVM-compatible Layer 1 blockchain, raised $100 million in a Series B round co-led by Framework Ventures and BH Digital. The blockchain employs a novel "proof of liquidity" consensus mechanism, which aims to enhance security and liquidity by incentivizing users to provide liquidity in exchange for governance tokens. Built on the Cosmos SDK, Berachain is designed to align user incentives with network growth.

The funds will be used to expand Berachain's global presence, particularly in emerging markets like Southeast Asia and Latin America, while also bolstering its engineering resources for continued development. Currently, the Layer 1 blockchain is in a testnet phase, with the latest blockchain explorer data showing an average of 500,000 active addresses daily, processing about 2 million transactions.

‍

4. EigenLayer

EigenLayer, a restaking protocol built on Ethereum, attracted $100 million in investment from a16z crypto, a venture capital firm known for its high median crypto investment of $25 million. EigenLayer has already seen nearly $12.5 billion in total value locked (TVL) due to its innovative approach to shared security, opening the door for competitors like Symbiotic and Karak to enter the emerging field of restaking.

EigenLayer’s restaking allows users to earn additional rewards, making it an attractive option for those already staking ETH through liquid staking derivatives like Lido and Rocket Pool. However, the protocol has faced criticism, including from Vitalik Buterin, who has urged caution in its use. The biggest controversy of 2024 was the airdrop campaign for EIGEN tokens, which featured strict geographic restrictions, non-transferability of tokens, and a significant allocation for advisors.

‍

5. HashKey

HashKey Group, a Hong Kong-based digital asset services firm, raised nearly $100 million in a Series A round, pushing its valuation to over $1.2 billion. The capital will be used to enhance HashKey’s Web3 ecosystem and expand its licensed business globally. HashKey operates the first licensed crypto exchange in Hong Kong, with around 300,000 weekly users and $100 million in daily trading volume, evenly split between spot and perpetual trading.

The firm’s focus on compliance and innovation has positioned it as a leader in Asia’s burgeoning virtual asset industry, with plans to further diversify its offerings and solidify its role as a key player in the global digital asset market. The HashKey CEX follows best practices for security and regularly posts updates of its Proof-of-Reserves, which currently stand at $37 million. HashKey Global maintains a compliant system and plans to offer mainstream services like LaunchPad, futures, and staking.

‍

Crypto Funding Trends in 2024

Using data gathered by DefiLlama, and cleaning it up a bit (Berachain was mistakingly added twice for example), we have identified 6 trends in 2024 crypto funding:

1. Top-funded sectors: Infrastructure ($1,38bn), L1s ($517mn), L2s ($351mn), DeFi ($320mn), AI ($294mn), LSDs ($288mn).
2. Frequently funded: Infrastructure (125), DeFi (49), Meme (28), L2s (26), AI (26).
3. Average size: $10.5 million.
4. Median size: $5.1 million.
5. Most active VC firms (as lead): Polychain Capital (13), Framework Ventures (12), Dragonfly (12), Pantera (11), Electric Capital (11).
6. Paretto-distribution: The top 146 rounds (30%) account for $3.8 billion (70%) of raised funds.

‍

Why is Crypto Startup Funding Interest Declining?

Venture capital interest in Web3/DeFi/Crypto has been on a decline since 2021, and it is explained by three simple things: overall drop in confidence since the Terra, Celsius and FTX fiascos in 2022; constant regulatory pressure from regulators like the US SEC like their lawsuits against Ripple, Binance and Uniswap; and finally (and this is more of a subjective observation) a general negative sentiment among retail users to VC-backed projects.

In 2023, the amount of crypto funding round declined by -64.91% on a year-over-year (YoY) basis, while the total raised amount dropped by -70.68%. So far in 2024, the numbers are -21.68% (rounds) and -20.50% ($ amount). It is August, so a simple future projection shows that 2024 might end up 23.09% better than 2023 with ~800 total rounds and a potential $8.5 billion total.

‍

Bottom Line

The top 5 most funded crypto projects in 2024 are Monad (Layer 1), Farcaster (SocialFi), Berachain (another L1), EigenLayer (restaking), and HashKey (centralized exchange). Together, they have accumulated $675 million, pushing the valuation of each above the $1 billion unicorn status.

Despite the overall decline in VC interest in Web3, projects can still pull off $100+ million rounds when they demonstrate a viable product-market fit and a strong user base. The challenge isn’t a lack of resources but rather a lack of regulatory clarity, particularly in the United States, where major investment firms are based, and lawsuits still remain over the industry.

Finally, whether or not crypto investing returns to its 2020-2021 peak anytime soon, the technology continues to advance at full steam. If anything, projects will need to be more capital-efficient until the VC funds start flowing again.