RootData: 2024 Q2 Web3 Industry Investment Research Report

Original title: "Web3 Industry Investment Research Report 2024 Q2"

Original source: RootData Research

 

Table of Contents

 

I. Overview of Web3 Financing in Q2 2024:

 

· Total financing reached US$2.75 billion, a year-on-year increase of 38.9%

· The total financing amount of the social track surged by 650% month-on-month

 

II. Distribution of project financing amounts in Q2 2024:

 

· The total number of mid- and late-stage financing in Q2 increased by 20.7% month-on-month

· The total financing amount of the top 5 increased by 81.25% month-on-month

 

III. Institutional activity rankings: · The total investment of the top ten institutions increased by 2% month-on-month · Animoca Brands invested 36 times and became the most active investment institution in Q2

 

IV. Fundraising of Web3 investment funds in Q2 2024: · The total amount of funds raised by Web3 investment funds in the first half of the year reached US$1.38 billion

· Investors tend to be cautious and compliant, and ETFs continue to drive Bitcoin's independent rise

 

V. Review of hot searches for projects in Q2 2024:

 

· The airdrop season is here as scheduled, and high valuations and low circulation models may suppress currency price performance

· Competition among Binance List Tokens is heating up, and it is expected that more than 30 large projects will conduct TGE in Q3

· Web3 The core brands in the field are distributed in the fields of exchanges, underlying public chains, Web3 media and analytical tools.

· The X Hot Surge List makes it easier to discover Alpha projects and is highly correlated with investor sentiment.

 

Summary

 

Web3 industry financing maintained strong momentum in Q2 2024, with a total of US$2.75 billion, a year-on-year increase of 38.9%. The social track has emerged, with a total financing amount that soared 650% month-on-month. The total net inflow of Bitcoin spot ETFs in Q2 reached US$2.394 billion, a month-on-month decrease of 80%, and the total asset management amount decreased by 12.4% month-on-month.

 

The total number of mid- and late-stage financings in Q2 2024 increased by 20.7% month-on-month. This trend may reflect that as the market stabilizes, investment institutions are more inclined to make strategic large investments in advance. Animoca Brands became the most active institution in Q2 with 36 investments. The top ten institutions' investment in the GameFi track increased by 71% month-on-month.

 

Paradigm announced the completion of $850 million in fundraising, becoming the largest fund-raising event in Q2 and even the first half of 2024. In the bull market rally that started at the end of 2023, the total fundraising of Web3 funds was more than 10 times lower than the previous bull market, and the BTC price was no longer driven by the inflow of Web3 funds.

 

The search volume reached a peak when the high FDV and low circulation projects were about to TGE, but then fell off a cliff. Competition in Binance List Token is heating up: the average valuation of Launchpool projects reached $217 million, with less than 2% of institutional investment. It is expected that more than 30 large projects will conduct TGE in Q3.

 

1. The total financing amount in Q2 2024 reached $2.75 billion, a year-on-year increase of 38.9%; the total financing amount in the social track surged by 650% month-on-month

 

2024 Q2 Bitcoin price trend and total financing amount of Web3 industry Source: RootData

 

2024 Q2 Bitcoin prices experienced significant fluctuations. On April 8, the price of Bitcoin reached a quarterly high of $71,630, and then fell to a quarterly low of around $58,300 on May 1. As of June 30, the price of Bitcoin fell by about 13% from the beginning of the quarter. The total net inflow of Bitcoin spot ETFs in Q2 reached US$2.394 billion, down 80% from Q1. As of June 30, the asset management scale was US$51.127 billion, down about 12.4% from Q1. In this complex market environment, the financing heat of Web3 primary market remains unabated. According to RootData statistics, in Q2 2024, there were 418 financing events in the Web3 primary market, with a total financing amount of US$2.75 billion, a year-on-year increase of 38.9%.

 

Top 3 tracks in terms of investment and financing amount in Q2 2024 Source: RootData

 

According to RootData statistics, the top three tracks in terms of financing amount in Q2 are infrastructure, DeFi and social. The total financing amount of the infrastructure track reached 1.016 billion US dollars, a month-on-month increase of 145%. It is worth noting that the social track has emerged, with a total financing amount of 227 million US dollars, a surge of 650% month-on-month and a year-on-year increase of 261%.

 

The strong performance of the infrastructure track is related to the large financing of multiple Layer1 and Layer2 projects, such as Monad's financing of 225 million US dollars and Berachain's financing of 100 million US dollars. In the DeFi track, there are 56 projects with million-dollar financing, mainly in the seed round, indicating that new projects are emerging in large numbers. The biggest reason for the explosive growth of the social track may be that projects represented by Farcaster have successfully balanced technological innovation and user experience, while cultivating a high-quality, low-noise community culture. This innovative model may solve the sustainability problem of early SocialFi projects, and also provide new possibilities for attracting a wider user group, thereby promoting the rapid development of the entire track and a large influx of investment.

 

2. The total number of mid- and late-stage financings in Q2 increased by 20.7% month-on-month, and the total financing amount of the top 5 increased by 81.25% month-on-month

 

Distribution of financing amounts of projects in Q2 2024 Source: RootData

 

In terms of the financing amount range, the number of early-stage investment (below $5M) projects in Q2 was 160, a slight decrease month-on-month; the number of mid-term investment ($5M-$10M) projects was 79, an increase of 61.2% year-on-year. The total number of mid- and late-stage financings reached 146, an increase of 20.7% month-on-month. This trend may reflect that as the market stabilizes, and it may be preparing for the expected next round of market increases, investment institutions may prefer investment opportunities that can be exited in the short term.

 

The top five projects in terms of financing amount in Q2 2024 received a total of US$725 million in financing, an increase of 81.25% compared with Q1. Among them, Monad completed a financing amount of US$225 million led by Paradigm and ranked first. It is worth noting that Farcaster completed a financing of US$150 million with a valuation of US$1 billion. Previously, the overall financing status of this track has been relatively sluggish. The total financing amount of projects that disclosed financing amounts in Q1 was only about US$70 million. In addition, Berachain’s valuation has reached US$1.5 billion in the B round of financing in April 2024. Its valuation has increased by 257% in one year.

 

Top 5 Financing Amounts in Q2 2024 Source: RootData

 

III. The total investment number of the top ten institutions with the most investments in Q2 increased by 2% month-on-month. Animoca Brands invested 36 times and became the most active investment institution in Q2

 

Ranking of Institutional Activity in Q2 2024 Source: RootData

 

According to RootData data, the top ten investment institutions with the most investments in Q2 2024 participated in a total of 202 investments, an increase of about 2% month-on-month. OKX Ventures topped the list with 30 investments in Q1, and although it dropped to 25 investments in Q2, it remained active. Infrastructure remains the most popular track, with the top ten institutions investing 81 times in this track, accounting for about 40% of their total investments in Q2.

 

The top ten investment institutions in Q2 invested 53 times in the GameFi track, an increase of 71% over Q1. This explosive growth may be due to the fact that projects in this track are shifting from a simple "play and earn" model to a more complex and attractive gaming experience, which not only improves game quality and user experience, but more importantly maintains the sustainability of the economic model. In contrast, the DAO and NFT tracks, which lack innovation, continued the sluggish state of Q1.

 

View real-time data of institutional holdings on the chain: OKX Ventures ; HashKey Capital ; The Spartan Group

 

Fourth, Web3 investment funds raised $1.38 billion in the first half of the year, investors tend to be cautious and compliant, and Bitcoin maintains an independent rise

 

 

Web3 venture capital fund fundraising quantity and amount (2015-2024Q2) Source: RootData

 

Public data since 2015 shows that there have been 177 fund raising events in the Web3 field, with a total fundraising amount of more than $39.6 billion. Large-scale external capital has driven the bull market from 2021 to 2022, and has left behind a large number of highly valued projects, such as StarkNet and zkSync.

 

Although the speed of capital entry has slowed down in the past two years, it is still much higher than in 2020 overall, and shows an upward trend. In the first half of 2024, Web3 Fund has raised $1.38 billion, of which Paradigm announced on June 13 that it had raised $850 million, becoming the largest fund raising event in Q2 and even in the first half of 2024.

 

In the bull market that started at the end of 2023, the total amount of funds raised by Web3 Fund was more than 10 times lower than the previous bull market, and the price of Bitcoin was no longer driven by the inflow of Web3 Fund. This may be because traditional high-net-worth users are more cautious, investing in Web3 currencies through compliant channels such as ETFs, and are worried about becoming the receiver of the exit wave of the previous bull market, which has promoted the rise of Bitcoin alone.

 

V. Review of Q2 Hot Search Projects

 

5.1 Airdrop season is here as expected, high valuation and low circulation model may suppress the performance of currency prices

 

 

RootData Q2 Hot Search Token List (Top12) Source: RootData

 

In the second quarter, Bitcoin fluctuated widely between 57,000 and 72,000 US dollars. Many star projects chose to conduct TGE during this window period, such as Wormhole, io.net, zkSync, Layerzero, Blast, etc. Among the 12 most popular projects in Q2 that have conducted TGE, it was found that the search volume reached a peak when the project was about to conduct TGE, but then dropped sharply. At the same time, the attention value is significantly affected by the price of Bitcoin, which is closely related to the confidence in the Web3 market.

 

Many high-profile projects carry the halo of "high valuation and low circulation". RootData's previous research pointed out that the average valuation of Binance Launchpool projects in the past three years was US$217 million, and the average valuation of OKX Jumpstart projects was US$373 million. In addition, only more than 30% of projects with FDV within US$1 billion and not listed on Binance did not have a primary and secondary valuation inversion.

 

During 2021-2022, a large amount of capital poured into the primary market, adopting aggressive valuation strategies and being in an optimistic market sentiment, many Web3 funds blindly chose high-valuation investment strategies. However, these projects failed to demonstrate a sustainable business model. At the same time, the shrinking liquidity brought about by the US dollar interest rate hike has also had an impact on the Web3 market, which may be one of the external reasons why investors are reluctant to buy new tokens.

 

5.2 Binance List Token competition is fierce, and it is expected that more than 30 large projects will conduct TGE in Q3

 

 

 

High FDV and large financing projects that may conduct TGE in Q3 Source: RootData

 

The Q3 TGE project list released by RootData includes 30 star projects with large financing and high FDV, such as Monad, Fuel, Scroll, Succinct, etc., which have a high probability of being listed on Binance.

 

According to statistics of the investment portfolios of 288 investors, the average number of projects listed on Binance Launchpool accounts for no more than 2% of their investment portfolios. Of the nearly 30 Binance Launchpool projects, 21 are invested by Binance Labs, accounting for more than 11% of their investment portfolios.

 

Due to Binance's trading depth and slippage advantages, as well as the competitiveness of contract rates, Binance's highly competitive listing environment has a profound impact on the market. Project parties who choose to conduct TGE on Binance can effectively utilize its market advantages and platform resources, laying a good market foundation for the long-term development of the project.

 

5.3 The core brands in the Web3 field are distributed in the fields of exchanges, underlying public chains, Web3 media and analytical tools

 

 

X Influence Index Source: RootData

 

The X Influence Index launched by RootData conveniently shows users the most influential Web3 projects, of which the core 12 projects are distributed in 4 key areas:

 

· Exchanges: Coinbase, Binance, Uniswap

· Underlying public chains: Bitcoin, Ethereum, Solana, Polygon

· Web3 media: CoinDesk, The Block, Cointelegraph

· Analysis tools: CoinMarketCap, Messari

 

5.4 X Hot Surge List makes it easier to discover Alpha projects and is highly correlated with investor sentiment

 

 

 

X As a tool for observing market dynamics, the Hot Surge List has quickly attracted many potential Alpha projects due to its close linkage with X platform data, and is updated frequently. At the same time, the list has become an important window for investors to understand market sentiment. The heat value showed an overall downward trend in Q2:

 

April: Web3 market sentiment is optimistic and projects are highly active

May: Market volatility, investors are cautious

June: BTC rebounded but did not break the previous high, market liquidity declined, and social heat dropped to freezing point

 

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About RootData

 

 

 

RootData is a data platform for Web3 asset discovery and tracking. It is the first to encapsulate on-chain and off-chain data of Web3 assets. The data is more structured and readable, and it is committed to becoming a productivity-level tool for Web3 enthusiasts and investors.

 

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