After a tumultuous 2022 in which many crypto firms struggled financially, 2023 has been a breath of fresh air for players in the crypto market. Bitcoin has been driving the recovery effort, recently crossing the $30,000 threshold after trading for around $16,500 in January. During the same period, Ethereum’s price increased to $2,000 from $1,200. Gains made by these leaders supported the rise in prices of other coins to rise as well.
As a result, crypto-focused venture capitalists have ramped up investments in the Decentralized Finance (DeFi) sector, pouring tens of millions into certain projects. Here are the top five DeFi projects that received funding recently.
LayerZero Labs
LayerZero, a cross-chain interoperability protocol, closed a Series B funding round in early April, raising $120 million and pushing its valuation up to $3 billion. The funding came from over 33 investors, including well-known names such as a16z crypto, Sequoia Capital, Christie’s, BOND, Circle Ventures, Lightspeed, Samsung Next, and OpenSea Ventures.
LayerZero is a messaging protocol that enables interoperability and cross-chain messaging across blockchains. Additionally, it offers the framework for decentralized applications to develop projects without the need for intermediaries to conduct cross-chain exchanges. Stargate Finance, the first DApp built on the protocol, supports transfers across multiple chains, including Ethereum, BNB chain, Fantom, Optimism, Avalanche, Polygon, and Metis.
With the funds raised in this latest round, LayerZero plans to expand its presence in the APAC region, hire more staff at LayerZero Labs, and strengthen its position in the global crypto ecosystem.
The protocol is backed by top players in the industry, such as Binance and Coinbase. Furthermore, LayerZero is utilized in DEX platforms, such as PancakeSwap, Uniswap, SushiSwap, Hashflow, Radiant, WOO network, and TraderJoe.
Scroll ZKP
Scroll ZKP, the native zkEVM scaling solution for Ethereum, raised $50 million in March 2023, bringing its valuation to $1.8 billion. It plans on using the funds to launch its mainnet and expand its ecosystem offerings.
Notable investors who participated in the funding round include Polychain Capital, Sequoia, Bain Capital Crypto, and Moore Capital Management, among others.
Last month, Scroll launched its zkEVM on the Goerli testnet, attracting over 1 million unique addresses and 16 million transactions in its pre-alpha testnet phase. Its alpha test net is currently live, and 18 million transactions have already been processed thus far.
Launched in 2021, Scroll uses zk-rollup technology to process transactions off the Ethereum network. The same help increase transaction speeds and reduce transaction-related costs.
Eigen Layer
Eigen Layer, a $ETH staking solution, raised $50 million in a Series A funding round led by Blockchain Capital, in late March. Other participants included Polychain Capital, Hack VC, Coinbase Ventures, and Finality Capital.
The project is currently working to launch the initial version of its protocol this year and the latest funding is expected to bolster its staking solution. Following Ethereum’s Shapella upgrade, Eigen Layer might attract greater attention since it allows tokens that were once locked up for validating the Ethereum network to be used to secure other protocols by “restaking” them.
Fetch.ai, an AI-focused blockchain platform, secured a $40 million investment from Web3-focused investment firm DWL Labs in late March. As a result of the popularity of AI-driven chatbots like ChatGPT and the image-generation program DALL-E, businesses have begun to create peer-to-peer applications by combining blockchain technology and artificial intelligence (AI). Fetch.ai helps build open services using AI and automates transactions in the supply chain, finance, travel, and other industries. Recently, Fetch.ai developed AI tools for enhanced trading products of decentralized exchanges. The company stated that the funds will be used to ramp up its decentralized machine learning, network infrastructure, and autonomous agents.
Sei Network
The Sei Network, a layer 1 blockchain built with the Cosmos SDK, has raised $30 million in two funding rounds from Jump Crypto, Multicoin Capital, Flow Traders, Distributed Global, Bixin Ventures, and Hypersphere Ventures. The funding round ended on April 11. With the newly raised capital, the protocol’s valuation stands at $800 million. The latest funding aims to accelerate Sei Network’s growth and expansion in Asia-Pacific.
Sei Network’s test net went live on March 13. Following its mainnet launch, the Sei team claims that over 120 apps, including AMMs, orderbooks, launchpads, RWAs, DEXs, and more, will be deployed on the network. The team has also confirmed an airdrop for those who interact with the network.
Conclusion
Despite ongoing regulatory uncertainty, the crypto industry continues to attract venture capital investments. The same demonstrates that innovations and developments, not market cycles, are the main drivers of investments. These recent funding rounds suggest that interest in blockchain technology, particularly in the DeFi sector, remains strong.
