RootData: Q1 2024 Web3 Industry Investment Research Report
The total financing amount in the Web3 industry reached $2.545 billion in Q1 2024, a year-on-year increase of 4.7%, with the number of projects receiving investment increasing by 10.5% year-on-year. The allocation of attention from Web3 investors is significantly influenced by large investments from well-known institutions, project TGE events, airdrops, and other factors.Author: RootData Research
Table of Contents
1. Total financing in Q1 2024 exceeds $2.545 billion, a year-on-year increase of 4.7%; financing in the DeFi sector grows over 150% month-on-month
- Q1 2024 BTC price trends and total financing in the Web3 industry
- Top 3 sectors by investment amount in Q1 2024
2. The number of early financing projects in Q1 increased by 10.5% year-on-year, with many unverified technologies and solutions still in the market
- Distribution of project financing amounts in Q1 2024
- Top 5 financing amounts in Q1 2024
3. The total investment number of the top ten institutions in Q1 increased by 120% month-on-month, with OKX Ventures being the most active investor with 30 investments
4. Characteristics and trend analysis of popular searches in Web3
- Bitcoin, Solana, and Blast ecosystem projects are growing rapidly, with developer atmosphere and wealth effect remaining important factors attracting developers
- The attention allocation of Web3 investors is significantly influenced by financing events, secondary market rotations, and project TGE events
- The correlation between project hot searches and secondary prices shows that public chains and DeFi projects are still the most searched asset types by users
- Sam Altman tops the hot search and click rankings, with trading clues based on popular figures gaining more attention from investors
Summary
The total financing in the Web3 industry reached $2.545 billion in Q1 2024, a year-on-year increase of 4.7%. The DeFi sector, driven by popular segments such as RWA and LSD, saw both year-on-year and month-on-month financing amounts exceeding 100% growth. The total inflow of funds into Bitcoin spot ETFs exceeded $12.1 billion, pushing the Bitcoin price above $72,000, setting a new historical high.
The number of projects receiving investment in Q1 2024 increased by 10.5% year-on-year, with infrastructure, DeFi, and GameFi sectors attracting attention from the capital market. The total investment number of the top ten institutions increased by 120% month-on-month, with OKX Ventures being the most active.
The attention allocation of Web3 investors is mainly influenced by large investments from well-known institutions, project TGE events, and airdrops. The rotation of sectors such as AI, RWA, LSD, and DePIN has led to a higher demand from users for finding popular investment targets. A total of 113 projects made it to the RootData Top 20 project hot search weekly list, with 12 of the issued token projects showing a high correlation between their search popularity on RootData and secondary market performance.
During Q1, the market saw significant attention on investment targets like the "Sam Altman concept," which aligns with the current trading structure of the Web3 industry dominated by retail investors. WLD, ARKM, and FET became popular investment targets for the quarter. As the Web3 industry matures and attracts more mainstream investors/entrepreneurs, trading opportunities based on figures/events will continue to emerge.
1. Total financing in Q1 2024 exceeds $2.545 billion, a year-on-year increase of 4.7%; financing in the DeFi sector grows over 150% month-on-month
1.1 Q1 2024 BTC price trends and Web3 financing totals
Source: RootData
On January 10, the U.S. Securities and Exchange Commission (SEC) approved the trading and listing of 11 Bitcoin spot ETFs. As of March 31, the total inflow of funds into Bitcoin spot ETFs exceeded $12.1 billion, with assets under management reaching $58.341 billion. Driven by strong buying pressure from BTC spot ETFs, the Bitcoin price rose to over $72,000, an increase of over 60%, setting a new historical high with a market cap reaching $1.4 trillion.
1.2 Top 3 sectors by investment amount in Q1 2024
Source: RootData
With the impressive performance of the Web3 secondary market, RootData statistics show that the Web3 primary market generated a total of 459 financing events in Q1, a year-on-year increase of 28.7%, with total financing reaching $2.545 billion, a year-on-year increase of 4.7%. Among these, infrastructure, DeFi, and CeFi were the top three sectors by completed investment amounts in Q1.
The DeFi sector saw both year-on-year and month-on-month financing amounts exceeding 100% growth, while the CeFi sector experienced a year-on-year growth of 217.71%, despite a small month-on-month increase of only 1.67%. The growth in the DeFi sector is related to the popularity of projects in segments like RWA and LSD since entering Q1, while the infrastructure sector saw a dual decline in both year-on-year and month-on-month figures (down 24.31% and 5.05%, respectively). This is due to the lack of new narratives in the infrastructure sector in Q1, coupled with some fund managers reallocating part of their funds to the secondary market for short-term capital efficiency.
2. The number of early financing projects in Q1 increased by 10.5% year-on-year, with many unverified technologies and solutions still in the market
2.1 Distribution of project financing amounts in Q1 2024
Source: RootData
In terms of financing amount ranges, the number of projects in the mid to late stage of investment in Q1 (>$10M) remained stable compared to Q1 2023, while early-stage investments ($5M<) increased by 16 projects year-on-year, indicating that the capital market may still be in a valuation correction phase and that there are still many unverified technologies and solutions in the market.
According to RootData data, the top five projects by financing amount in Q1 2024 collectively raised over $400 million. EigenLayer completed a $100 million financing led by a16z Crypto, and re-staking has become one of the hottest trends in Q1 2024, with its TVL increasing by 1100%, rising from $1 billion to $12 billion. After Ethereum 2.0 transitioned to PoS (Proof of Stake), re-staking, as a variant of staking, has attracted more and more investors and projects.
2.2 Top 5 financing amounts in Q1 2024
Source: RootData
3. The total investment number of the top ten institutions in Q1 increased by 120% month-on-month, with OKX Ventures being the most active investor with 30 investments
Source: RootData
According to RootData data, the top ten investment institutions with the most investment occurrences in Q1 2024 participated in a total of 198 investments, an increase of 85% year-on-year and 120% month-on-month. Among these investments, infrastructure was the most popular sector, with the top ten institutions making 96 investments in this sector, accounting for 48% of their total investments in Q1. This figure represents a month-on-month increase of 300% and a year-on-year increase of 153%.
Notably, the top ten investment institutions made a total of 40 investments in the DeFi sector in Q1, with both year-on-year and month-on-month increases of 54%; in the GameFi sector, the top ten institutions made 31 investments, with year-on-year and month-on-month increases of 210%. In contrast, the CeFi and DAO sectors received almost no interest from the top ten active investment institutions in Q1 2024, possibly due to compliance and commercialization challenges and the size of funding exposure.
4. Characteristics and trend analysis of popular searches in Web3
4.1 Bitcoin, Solana, and Blast ecosystem projects are growing rapidly, with developer atmosphere and wealth effect remaining important factors attracting developers
Most L1/L2 projects showed a "V" shaped trend, with a significant drop in new project numbers in February, possibly due to the impact of the Spring Festival holiday in East Asia, while March reached a peak for the first quarter.
Ethereum remains the preferred ecosystem for Web3 projects, with Bitcoin, Solana, and Blast ecosystems growing rapidly. The Bitcoin ecosystem has evolved from inscriptions to runes, with the narrative still strengthening. SOL saw an increase of over 129% in the first quarter, making Solana one of the most eye-catching public chains. In the Blast ecosystem, 20 native projects completed financing, leading other Layer 2 projects.
Some unlisted popular L1/L2 ecosystem projects are in single digits, such as ZkSync, StarkNet, Aptos, Sui, and Near, which is related to the niche nature of the technical language, the lack of effective guidance from foundations, or the short operational cycle of the mainnet.
4.2 The attention allocation of Web3 investors is significantly influenced by financing events, secondary market rotations, and project TGE events
RootData's hot search rankings comprehensively consider the click volume, search volume, and collection volume of projects during the period, reflecting the trend of project popularity in the market. Currently, this ranking has become an important reference for the popularity of crypto projects.
Most projects on the list received large investments from well-known institutions, such as EigenLayer completing a $100 million Series B financing on February 22, the largest single financing in the first quarter. io.net completed Series A financing at a $1 billion valuation on March 5.
The impressive performance of the secondary market has drawn attention to "established" L1/L2 projects like Solana and Metis. At the same time, newer public chains like Aptos and Sui have also benefited from the value spillover of L1/L2 sector rotations.
Project TGE events are one of the important factors for gaining market attention. Projects like StarkNet, Manta, and ZetaChain announced airdrop plans in January.
The rotation of sectors such as AI, RWA, LSD, and DePIN has led to an increased demand from users for finding popular investment targets, resulting in an explosive increase in project numbers.
4.3 The correlation between project hot searches and secondary prices shows that public chains and DeFi projects are still the most searched asset types by users.
RootData hot projects and their secondary market performance (partial) Source: RootData
In the first quarter, RootData released 12 issues of the Top 20 project hot search weekly list, with a total of 113 projects making the list. Overall, the search volume shows a close linkage with the market, influenced mainly by narratives, project TGE events, and market performance.
Public chain and DeFi searches account for the largest proportion of asset types. New asset categories are most likely to attract investor attention, such as Layer 3, modular networks, and re-staking protocols…
Among the 12 projects that have completed TGE, RootData's search popularity shows a correlation with secondary market performance, even reflecting foresight in the secondary market performance of projects like Pyth Network, Manta Network, and Jupiter.
4.4 Sam Altman tops the hot search and click rankings, with trading clues based on popular figures gaining more attention from investors
Source: RootData
In the first quarter of 2024, 12 individuals consistently appeared on the hot search list, with Sam Altman being the most searched figure; he is the founder and CEO of OpenAI and co-founder of Worldcoin. Following him is Jack Lu, a partner at NGC Ventures, and co-founder of several popular blockchain projects like BounceBit, Bitune, Bounce, and Chainswap. Additionally, Balaji Srinivasan, Jia Yaoqi, and Anatoly Yakovenko remain highly popular.
Notably, during Q1, the market saw significant attention on investment targets like the "Sam Altman concept," which aligns with the current trading structure of the Web3 industry dominated by retail investors. WLD, ARKM, and FET became popular investment targets for the quarter. As the Web3 industry matures and attracts more mainstream investors/entrepreneurs, trading opportunities based on figures/events will continue to emerge.
Source: RootData
When projects complete TGE events, there are usually many personnel changes. Former LayerZero strategic director Irene Wu has joined Bain Capital Crypto as a venture partner; former zkSync DeFi head Sebastien has left his position to become a co-founder of zkSync's modular blockchain, Sophon.
About RootData
RootData is a data platform for discovering and tracking Web3 assets, pioneering the encapsulation of on-chain and off-chain data for Web3 assets, with higher data structuring and readability, aiming to become a productivity-level tool for Web3 enthusiasts and investors.
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Note: This report is produced by RootData Research. The information or opinions expressed in this report do not constitute investment strategies or advice for anyone. The materials, opinions, and speculations contained in this report reflect the judgment of RootData Research as of the date of publication, and past performance should not be used as a basis for future performance. At different times, RootData Research may issue reports that are inconsistent with the materials, opinions, and speculations contained in this report. RootData Research does not guarantee that the information contained in this report remains up to date, and reliance on the information in this material is at the reader's own discretion; this material is for reference only.
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