RootData: 2024 Crypto Development Research Report and Annual Rankings
Crypto is marching into the 4th wave of asset innovation, highly transmissive between primary and secondary markets
With the approval of $BTC and $ETH spot ETFs, crypto gains solid liquidity in a long run. Overall, the primary market lagged behind secondary market. Yet, still transmissive between the two markets. The primary market in the first three quarters of 2024 drew an increasing line followed by a stable trend: Q1 raised a total of $2.545 billion (a slight year-on-year increase of 0.76%), Q2 continued the upward momentum, climbing to $2.75 billion (an 8.05% quarter-on-quarter growth), and while Q3 saw a slight pullback to $2.406 billion, it still gained a significant year-on-year increase of 26.05%.
As you can see, Crypto is marching into the 4th wave of asset innovation, mainly driven by non-EVM Meme, BRC20, AIGC and RWA assets. However, over the past 12 months, the market does not seem to have reached a broad consensus on these asset innovations, which is a crucial reason for it’s inability to reach another ATH like $BTC. From RootData’s perspective, one of the major rule in crypto is to identify new native assets with the widest consensus, which in turn drives capital inflows.
Changes in trading structure: Over past 12 months, 54.9% of institutions haven’t made a single investment, only 12% of projects have completed two or more rounds of funding
54.9% of institutions haven’t made a single investment. The average fundraising amount has increased by $53,139 per round compared to 2023, marking a growth of approximately 0.62%. The crypto primary market shows a clear head effect. According to a September survey by RootData, most investment institutions are inactive or hesitant to invest due to several reasons:
- they have not seen significant innovations in the industry;
- there is a high level of opacity in project information;
- uncertainty caused by rapid industry changes;
- issues like poor liquidity and difficulties in exits.
Changes in trading structure: Over past 12 months, 54.9% of institutions haven’t made a single investment, only 12% of projects have completed two or more rounds of funding
According to RootData, a total of 1,459 fundraising events occurred over the past 12 months. Among them, 1,283 projects raised funds in only one round, 149 projects completed two rounds of funding, and 27 projects completed three or more rounds. Compared to 2021–2022, these three figures have decreased by 27.7%, 30.0%, and 10.2%, respectively. However, compared to the 2022–2023, they have increased by 7.6%, 11.2%, and 86.3%, respectively.
This indicates that the industry is still in its early stages, with many unproven technologies and innovations, while also suggesting that many projects will face pressure for follow-up funding.
Hot investment segments and competitive ecosystems: The Base ecosystem has experienced the largest growth among L2s in the past 12 months, while DeFi is considered the most underestimated track by over 41% of investors
In the past 12 months, infrastructure has seen over $4.2 billion of its financing, while DeFi has received over $1.4 billion. According to a September investor survey, DeFi is considered the most undervalued track by over 41% of investors, while 48% of investors believe that the valuation of L1/L2 are too high.
Ethereum continues to dominate the ecosystem rankings with its first-mover advantage and a complete developer ecosystem, hosting 2,562 projects. The Solana ecosystem has made a strong rebound after the impact of the 2022 FTX incident, with the number of projects reaching 823. We also see the rapid growth of Bitcoin and TON ecosystems, with 383 and 141 projects, respectively.
It‘s worth noting that Base, as the Layer 2 solution backed by Coinbase, has accumulated 428 projects since its launch in August 2023. It has achieved more than a 28% growth within the Ethereum L2 ecosystem, making it the fastest-growing ecosystem among Layer 2 networks.
The L1, DeFi, and AI are the most popular sectors
with DeFi, Game, and AI being the tags most frequently added to new projects over the past 12 months. Monad has the highest single round of funding.
According to RootData, DeFi was the most frequently added tag for new projects over the past 12 months, followed by Game and AI. Notably, while DeFi and AI are the most heated tracks over the past 12 months. Despite Game being a popular tag for new projects, it still lagged behind on the ranking. This may be attributed to the gaming category’s failure to deliver satisfactory results in both product development and token performance across the past four quarters.
Looking back at the top 10 investment and financing deals over the past 12 months, Monad ranked first with a $225 million funding round at a $3 billion valuation in April. Notably, among the top 10 deals, besides the usual capital-intensive segments like CeFi and mining, Celestia’s $100 million OTC financing announced in September made it into the top 10. This might indicate that OTC transactions are emerging as a key trend in the industry.
RootData Ranking Criteria
Since the release of the RootData List in 2023, its rankings have garnered increasing attention from entrepreneurs, investors, LPs, and the broader Crypto community. RootData is committed to showcasing the core drivers and trends in the industry through rigorous data analysis.
The statistics for this ranking cover the period from October 31, 2023, to October 31, 2024, and include five distinct lists:
Liquidity Attribution: Tokens of 9 ranking projects are now listed on five major exchanges which are Binance, OKX, Bybit, Upbit, and Coinbase. Among them, 82% of the tokens have been listed on at least three major exchanges.
Fundraising Attribution: The median fundraising amount for the listed projects is $23.15 million, with an average of 2 rounds. Thirteen listed projects did not raise any funds. Notably, based on FDMC/Raised calculations over the past 12 months, Top 5 projects are all on the list.
Fundraising Attribution: The median fundraising amount for the projects on this list is $25.71 million, with an average round of 2. Seven projects have reached or exceeded $1 billion valuation, four of projects have not disclosed their funding details.
Segment Attribution: The majority of listed projects cover across 26 tracks, with a significant proportion from Modularity, DeFi, Infrastructure, and AI. Over the past four quarters, GameFi, CeFi, and NFT are under stagnation in innovation; there have been several selections by RootData from these tracks that represent notable innovation.
Investment Attribution: 50 institutions on the list have, on average, made 28 investments over the past four quarters, with an average of 7 leads. To some extent, these institutions have shaped the investment trends and characteristics in Crypto over the past four quarters.
Institution Attribution: 46% of the institutions on the list are based in North America, 20% are located in China (including Hong Kong, Macau, and Taiwan), and the remaining 34% are based in places like Singapore, Dubai and others.
Among the selected institutions, approximately 80% are crypto-native investment firms (including venture arms of traditional VC firms), while the remaining are traditional investment firms. Different institutions are contributing to making the early-stage crypto entrepreneurial ecosystem more robust.
Angels are emerging. RootData recorded 2,037 angel investors (who have made at least one investment). These active angel investors are primarily successful crypto entrepreneurs. Over the past 12 months, the top 10 angel investors have made an average of 18 investments. As Angel Investor continues to grow, early-stage innovation and entrepreneurial environment in crypto will be healthier.
According to the survey conducted by RootData in September, 75% of investors prioritize CEO and team as the most important factors in their investment decisions. RootData currently tracks 1,827 Crypto project CEOs. We believe that premium Crypto CEOs are a precious resource and a key driving force behind the industry’s growth and development.
About RootData
RootData is a Web3 asset discovery and tracking data platform that pioneers in encapsulating on-chain and off-chain data of Web3 assets, aiming to become a productivity tool for Web3 enthusiasts and investors with its high data structuring and readability.
Website：www.rootdata.com
