RootData: 2024 Web3 Industry Development Research Report and Annual Rankings

Original Title: 《RootData: 2024 Crypto Development Research Report and Annual Rankings》

Author: RootData Research

Crypto 2024 Venture Capital Market Review

The Crypto industry enters the fourth wave of asset innovation, with high transmission between primary and secondary markets

With the approval of Bitcoin and Ethereum spot ETFs, the Crypto industry has established a solid long-term liquidity foundation. Overall, the primary market shows some lag compared to the secondary market, but the transmission between the two is evident. The primary market exhibited a trend of initial growth followed by stabilization in the first three quarters of 2024: Q1 total financing reached $2.545 billion (a slight year-on-year increase of 0.76%), Q2 continued to rise to $2.75 billion (a quarter-on-quarter increase of 8.05%), and Q3 saw a slight adjustment to $2.406 billion, but still a significant year-on-year growth of 26.05%.

In fact, the Crypto industry has entered the fourth wave of asset innovation, primarily driven by non-EVM MemeCoins, BRC20, AIGC, and RWA assets. However, over the past 12 months, the market seems to have not reached a broad consensus on these asset innovations, which is a significant reason why the primary market has not been able to create new price highs like BTC. In our view, one of the development rules of the Crypto industry is to find new native assets with the greatest consensus to drive capital inflow.

Changes in Trading Structure: 54.9% of institutions did not make a move in the past 12 months, with only 12% of projects completing two or more rounds of financing

54.9% of institutions did not make a move in the past 12 months, with the average financing amount increasing by $53,139 per round compared to 2023, an increase of about 0.62%. The Crypto primary market exhibits a significant head effect, as shown by a survey conducted by RootData in September, indicating that most investment institutions are inactive or not making moves due to:

• Not seeing significant innovations in the industry;
• High opacity of project information;
• Uncertainty brought by rapid changes in the industry;
• Poor liquidity and difficulties in exit, among other reasons.

RootData statistics show that there were a total of 1,459 financing events in the past 12 months, with 1,283 projects completing only one round of financing, 149 projects completing two rounds, and 27 projects completing three or more rounds; compared to 2021-2022, these three figures decreased by 27.7%, 30.0%, and 10.2% respectively, but compared to the 2022-2023 fiscal year, they increased by 7.6%, 11.2%, and 86.3%, indicating that the industry is still in its early stages. There are many technologies and innovations in the market that have not been disproven, and it also indicates that many projects will face pressure for subsequent financing.

Popular Investment Tracks and Ecological Competition: The Base ecosystem is the fastest-growing L2 in the past 12 months, with DeFi considered the most undervalued track by over 41% of investors

The infrastructure track saw over $4.2 billion in investment and financing in the past 12 months, while the DeFi track saw over $1.4 billion. According to a September investor survey, DeFi is considered the most undervalued track by over 41% of investors, while the L1/L2 track is viewed as overvalued by 48% of investors.

Ethereum continues to dominate the ecosystem with 2,562 projects, leveraging its first-mover advantage and complete developer ecosystem. The Solana ecosystem rebounded strongly after the impact of the 2022 FTX incident, with the number of projects reaching 823. The Bitcoin ecosystem and TON ecosystem are also developing rapidly, with 383 and 141 projects respectively.

Notably, Base, as a Layer 2 solution supported by Coinbase, has rapidly accumulated 428 projects since its launch in August 2023, achieving over 28% growth in the Ethereum L2 ecosystem, making it the fastest-growing L2 network.

L1, DeFi, and AI tracks are the hottest, with DeFi, Game, and AI being the most tagged new projects in the past 12 months, and Monad having the highest single financing

According to RootData statistics, DeFi has the most tags added to new projects in the past 12 months, followed by Game and AI sectors. However, it is worth noting that DeFi and AI are also the highest-ranking sectors in terms of popularity over the past 12 months, while Game, despite being a popular tag for new projects, has performed poorly in the popularity rankings, possibly due to the lack of satisfactory results in both product and token price performance over the past four quarters.

Looking back at the top 10 financing transactions in the past 12 months, Monad ranked first with a $225 million financing at a $3 billion valuation in April this year. Notably, among the top 10 transactions, besides the common CeFi and mining sectors that require high capitalization, Celestia's $100 million OTC financing announced in September made it into the top ten transactions, which may also indicate that OTC trading will become one of the important trends in the industry.

Background and Standards of the Rankings

Since the release of the RootData List in 2023, its results have garnered attention from more entrepreneurs, investors, LPs, and general Crypto enthusiasts. RootData is committed to showcasing the core forces and trend characteristics of industry development through rigorous data analysis.

The statistics for this ranking cover the period from October 31, 2023, to October 31, 2024, and five rankings have been published, specifically: Top 50 Projects (completed TGE), Top 50 Projects (not completed TGE), Crypto VC Top 50 Investment Institutions, Top 10 Angel Investors, and Top 20 Best CEOs.

Top 50 Projects (Completed TGE)

• Liquidity Characteristics: Tokens of 9 listed projects are now available on five major exchanges (Binance, OKX, Bybit, Upbit, and Coinbase). Among them, 82% of projects have their tokens listed on at least three major exchanges.
• Track Characteristics: The listed projects come from 22 tracks, with a majority in Layer 1, DeFi, and AI. Compared to last year, this year's list has added 5 MemeCoin projects, as we believe MemeCoins are building a new asset class and demonstrating unique value in enriching Crypto asset categories and promoting Crypto's outreach.
• Financing Characteristics: The median financing amount for listed projects is $23.15 million, with an average of 2 rounds of financing, and 13 listed projects did not undergo financing. Notably, in the past 12 months, based on FDMC/Raised calculations, all Top 5 projects are listed, including Celestia (3,670x), Ondo Finance (1,819x), Jito (1,322x), Ethena (1,134x), and Sei (816x).

Top 50 Projects (Not Completed TGE)

• Financing Characteristics: The median financing amount for projects on this list is $25.71 million, with an average of 2 rounds of financing, and 7 projects have valuations of $1 billion or more (inclusive), while 4 projects have not publicly disclosed their financing.
• Track Characteristics: Most listed projects cover 26 tracks, with modular, DeFi, infrastructure, and AI having a significant share. Over the past four quarters, although GameFi, CeFi, and NFT tracks have entered a period of innovation stagnation, we still chose projects with innovative representatives from these tracks.

Crypto VC Top 50

The 50 institutions on the list made an average of 28 moves over the past four quarters, with an average of 7 leading investments. To some extent, these institutions have shaped the investment trends and characteristics of Crypto over the past four quarters. 46% of the institutions are located in North America, 20% in China (including Hong Kong, Macau, and Taiwan), and the remaining 34% in Singapore, Dubai, and other locations.

Among the selected institutions, approximately 80% are Crypto-native investment institutions (including traditional investment institutions' Crypto project investment departments), while the rest are traditional investment institutions. Different types of institutions are driving the early entrepreneurial innovation ecosystem in Crypto to become more robust.

Angel Investors

The angel investor community is rapidly rising, with RootData currently recording 2,037 angel investors (who have made at least one investment). These active angel investors are primarily successful Crypto entrepreneurs, with the top 10 angel investors making an average of 18 moves in the past 12 months. As the angel investor community continues to grow, the early-stage innovation and entrepreneurship ecosystem in Crypto will become healthier.

Top 20 CEOs

According to a survey conducted by RootData in September targeting investors, 75% of investors consider the CEO and team as the primary factor in their investment considerations. RootData currently records 1,827 Crypto project CEOs, and we believe that high-quality Crypto CEOs are a scarce resource and are the most critical force in the industry's growth.

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.

Website: www.rootdata.com
X: @RootData_Web3
TG: t.me/Rootdatalabs

Disclaimer

This report is produced by RootData Research, and the information or opinions expressed in this report do not constitute investment strategies or advice for any person. 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.