The decline in investment activity in the crypto industry in November can be attributed to market volatility and the negative impact of the FTX incident on venture capital institutions. According to Rootdata, 94 public financing events took place in the primary crypto market during the month, marking the first time this year that monthly investments have fallen below 100. The decline in investment activity is expected to continue in the coming months as most projects release funding news with a lag.
Compared to the previous month, the number of investments in November decreased by 19 cases, while the amount involved increased by $119 million. This indicates that while the number of investments fell by 16%, the amount involved increased by approximately 12%. This can be attributed to the fact that many large-scale financings occurred during the month, offsetting the decrease in financing events.
According to statistics, there were five projects with a financing amount of more than $50 million in November, namely Keyrock, TRM Labs, Ramp, Fenix Games, and Matter Labs, while there were only three such projects in October.
From the perspective of specific categories, infrastructure, CeFi, and games are the most favoured fields by venture capital institutions, with financing amounts of $379 million, $302 million, and $206 million, respectively.
Additionally, there were five mergers in the crypto market this month, four of which occurred in the CeFi field and involved well-known companies such as Binance, CrossTower, and Bakkt. The other was the acquisition of the Solana NFT protocol Strata Protocol by the Helium Foundation at the beginning of the month.
This article will provide a detailed overview of the investments in November across various categories in the crypto industry.
Infrastructure
The infrastructure category includes Layer1, Layer2, developer platforms, wallets, and many other fields that have long been the focus of venture capital institutions. This month, 20 infrastructure projects received financing, totaling $404 million.
Among them, zkSync development company Matter Labs announced the completion of a $200 million Series C round of financing, and venture capital institutions such as Dragonfly, a16z, and Lightspeed Venture once again added to the zk narrative. Just one month ago, zkSync announced the launch of version 2.0 of the mainnet, but it is expected to be open to external projects in December. According to zkSync ecological official website statistics, more than 100 projects have been deployed on the test network, including Aave V3 and Uniswap V3. The subsequent development of the zk ecology is worth keeping an eye on.
In the recent popular field of MPC wallets, Fordefi stood out and received $18 million in seed round financing from well-known institutions such as Lightspeed Venture and Electric Capital. According to the introduction, Fordefi’s MPC wallet platform and web3 gateway can help institutional users access more DeFi opportunities, connect to dApps on various chains while ensuring asset security, and conduct transactions, loans, investments, and votes in DeFi.
In the privacy space, the multi-signature solution Nucleo completed a $4 million seed round of financing. The project allows users to privately transfer assets while using multi-signatures. In addition to investment from Bain Capital Crypto, the project has received investment from multiple privacy expansion solutions such as Aztec Network, Aleo, and Espresso Systems. It is expected that this project will be one of the first ecological projects of these private networks.
Furthermore, T3rn, a smart contract hosting platform, is also worth mentioning. It provides innovative solutions for interoperable smart contract execution with built-in fail-safe mechanisms, and anyone can use smart contracts stored in the t3rn registry. Developers who contribute smart contracts to the library can choose to be paid when their code executes, providing a new vision for open-source development while fairly rewarding developers.
CeFi
The recent FTX thunderstorm incident has had a major impact on the CeFi field, leading to a crisis for many CeFi projects. However, in November, the amount of financing raised by CeFi projects still ranked second among the nine major categories, with approximately $301 million raised in 14 financings.
On the one hand, compliant CeFi projects continue to be favoured. Most of the CeFi projects that completed financing in November have different types of licenses. For example, Archax has obtained an FCA license in the UK, ADDX has acquired a digital securities issuance, custody, and secondary trading license from the Monetary Authority of Singapore, and Coinmetro has received regulation from the Estonian Financial Intelligence department.
On the other hand, the lag in financing news is still evident. Keyrock, a cryptocurrency market maker, and Lemon Cash, a cryptocurrency exchange, have also stated in news announcements that their financing was completed a few months ago and that the decision to announce it now is mainly to maintain market and user confidence.
Regarding specific projects, Ejara, Apex Crypto, and Ramp are worth noting. Ejara, a Cameroonian fintech company, offers an investing app that allows users to buy cryptocurrencies and save through decentralized wallets. The company has attracted $8 million in investment from Dragonfly, CoinShares, Circle Ventures, HashKey Capital, and other well-known institutions, indicating that emerging markets are still relatively attractive to venture capital firms.
Apex Crypto, an encryption investment solution, was acquired by Bakkt for $200 million in early November, making it the second-highest acquisition this year. The platform reportedly provides solutions for execution, clearing, custody, cost basis, and tax services for more than 30 tokens, and any business can use its easy-to-integrate API to launch cryptocurrency products for customers.
Ramp, similar to “PayPal” in the crypto world, has launched cryptocurrency trading services in the US and Canada. Residents can use legal tender, debit cards, credit cards, bank transfers, and Apple Pay to purchase BTC, ETH, and other cryptocurrencies. A $70 million Series B round raised its valuation to $450 million.
DeFi
In November, the number of DeFi financings reached 13, raising a total of around $42 million and ranking fifth among the nine major categories.
From the perspective of the ecological distribution of public blockchains, the Near ecosystem was the most active this month, with decentralized derivatives trading protocol Veax, decentralized trading protocol Jumbo Exchange, and Orderly Network completing financing. In addition, projects based on Solana, Cardano, and Optimism have also completed funding.
Veax, Lyra, and Avault are worth noting in terms of specific projects. Veax is a native advanced unilateral liquidity management DEX on the Near blockchain. Its planned functions include a hybrid AMM DEX, adaptive liquidity pool, real margin leveraged trading, smart contract-based OTC trading, and a smart contract-based liquidity token auction.
Lyra is an option liquidity protocol built on Optimism that combines a first-class dynamic volatility model and risk management architecture to provide a reasonably priced two-way option market in DeFi. Avault is a one-stop full-chain income platform based on the Layerzero ecosystem, aiming to lower the threshold for users to use Web 3.0 DeFi Dapps. Users holding assets on one chain can interact with Dapps on other chains with just one click to complete cross-chain compound interest, staking, lending, copy transactions, and more.
NFT
In November, the number of NFT financings reached 10, raising approximately $32 million.
Various innovations are emerging in the NFT category. a NiftyApes, smart contract system, can help NFT owners mortgage their NFTs to obtain instant liquidity. The NFT fraud detection network Yakoa can identify and track intellectual property infringement on the chain, and the NFT, perpetual contract exchange nftperp, can track the minimum price for an NFT collection, allowing users to take long and short positions on NFTs.
There is also a project, Buk, that is integrated with offline life. It focuses on enabling hotels to create, manage, and distribute their rooms as NFTs. After booking, guests receive NFTs representing each room night. The token enables room booking transactions in the secondary market (distributors and guests) while maintaining price control and full visibility of the distribution channel.
Others
Daylight is a wallet tracking platform that allows users to explore the various capabilities of their wallet, including minting, airdropping, unlocking, and voting. Framework Ventures, Chapter One, and other institutions support the project.
Sepana is a Web3 indexing infrastructure that facilitates cross-blockchain and Web3 discovery of content, transactions, NFTs, DAOs, and people. The project aims to increase people’s awareness of Web3 content by making it accessible and discoverable. Sepana has developed products such as Ask Mirror, Lens Search, and Cloutavista to help users quickly and easily search the content of protocols like Mirror and Lens Protool. The project has received support from Hack VC, Protocol Labs, Balaji Srinivasan, and other investors.
In addition, due to the increasing number of security incidents and compliance issues, companies like Beosin and TRM Labs have also completed new financing rounds. Beosin is a blockchain security service provider offering smart contract auditing, stolen cryptocurrency recovery, and risk monitoring and alerting services. TRM Labs is a blockchain analysis company that primarily helps financial institutions, cryptocurrency companies, and public agencies investigate crypto-related fraud and financial crimes. The company has received investment from well-known institutions such as Goldman Sachs and PayPal Ventures.
About RootData
Rootdata is a visual and structured crypto projects data provider, offering crypto investors and entrepreneurs with investment and financing data with more transaction clues, and is committed to becoming a data entry for discovering high-quality crypto assets.
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