Crypto Venture Capital Slows down: Here’s the top 10

According to DeFi Llama, 60 crypto projects raised capital in February, down 25 % month over month compared to February. The total capital raised month over month also decreased, with $758,4 million in March compared to $873,7 million in February. This article highlights our top 10 projects that raised capital in March.

Soul Wallet

In response to the growing demand for a better user experience in non-custodial crypto wallets like MetaMask, the Ethereum Foundation has introduced the ERC-4337 standard. This innovation aims to balance asset control with an improved user experience, drawing interest from developers and startups.

Soul Wallet is among the early adopters of ERC-4337, which brings smart contract capabilities to wallets via "account abstraction." This allows developers to integrate smart contracts into wallets, enabling features such as social recovery for account restoration and the option to pay gas fees in stablecoins rather than Ethereum alone.

Soul Wallet raised $3.1m in seed funding. Backers included Struck Crypto, Game7DAO, NGC Ventures, Dispersion Capital, Alchemy, Ankr and Signum Capital, David Hoffman, Ryan Sean Adams, Kristof Gazso, Marc Zeller, Scott Moore, Terence Tsao and Tim Beiko. The company is advancing the wallet internally with plans to launch it in Q3 or Q4.

Eigen Layer

EigenLayer protocol aims to provide validators with the ability to "re-stack" their Ethereum and its variants (stETH, rETH, cbETH, and LsETH) to secure not just the Ethereum network but also other emerging crypto networks, consequently generating additional rewards.

Re-staking allows ETH already being utilized for securing the Ethereum network to be repurposed for the security of new crypto networks. Since the collateral for validators is denominated in ether, the capital expenditure required to incentivize, attract, and maintain a decentralized group of high-quality validators is significantly reduced. Bart Stephens of Blockchain Capital elaborated on the benefits of EigenLayer, explaining that it not only considerably lowers the cost of capital for bootstrapping new crypto networks but also fosters decentralization.

EigenLabs, the development team behind EigenLayer, has announced a successful $50 million Series A funding round led by native VC Blockchain Capital. The round featured participation from other prominent investors in the cryptocurrency ecosystem, such as Electric Capital, Hack VC, Polychain, and Coinbase Ventures. The funding raised in this Series A round will further the development and implementation of the EigenLayer protocol.

Proven Tools

Proven tools is a crypto company dedicated to increasing trust and transparency in the crypto industry. By leveraging advanced cryptographic tools like zero-knowledge proofs and homomorphic encryption, Proven empowers exchanges, stablecoins, asset managers, and custodians to create safer and more robust markets for all participants.

The company's solution, which incorporates zero-knowledge proofs and quantitative technology expertise, offers a "Proof of Solvency" that can be run daily, increasing transparency and trust without exposing balance sheets or other sensitive data. Unlike most proof of reserve schemes that only disclose a firm's assets, Proven enables firms to display assets and liabilities without revealing additional information about the firm or its customers.

Proven has announced a successful $15.8 million seed funding round led by Framework Ventures. The round also saw participation from prominent founders such as Balaji Srinivasan, Roger Chen, and Ada Yeo. The crypto venture capital will help Proven expand its development team and scale its cutting-edge zero-knowledge-based technological infrastructure. As crypto platforms increasingly prioritize trust and security, Proven's solution is an approach that reduces the risk for both customers and platforms while fostering transparency and privacy.

DigiFT

DigiFT is a Singapore-based decentralized exchange for asset-backed tokens, aiming to bridge the gap between traditional and decentralized finance. DigiFT is enrolled in the Monetary Authority of Singapore (MAS) FinTech Regulatory Sandbox.

The platform provides regulated DeFi solutions on the Ethereum public blockchain, using an Automatic Market-Making (AMM) mechanism to facilitate secondary trading liquidity for security tokens backed by assets such as bonds and equities.DigiFT allows asset owners to issue blockchain-based security tokens efficiently and cost-effectively. At the same time, investors can trade with continuous liquidity through the AMM mechanism and maintain control over the digital assets in their wallets.

DigiFT has completed a Pre-Series A funding round, securing $10.5 million in investments. The investment round was led by Shanda Group, a global investment group founded by Chinese online entertainment pioneer Tianqiao Chen and his family in 1999. Other participants included HashKey Capital, Hash Global, Xin Enterprise Pte. Ltd., and North Beta Capital, all prominent blockchain and digital technology players.

The Pre-Series A funds will be used to support license applications in Asia, the Middle East, and Europe, as well as to develop the technology further, expand the company's innovation capabilities, and execute go-to-market plans.

Cubist

Cubist is a Web3 infrastructure provider that offers secure-by-design tools to help developers build, test, and deploy dApps at scale. The company's first offering is an open-source software development kit (SDK) designed for multi- and cross-chain development and testing. Cubist's SDK allows users to write cross-chain dApps as if they run on a single chain and switch chains or bridge providers with a single configuration line. The team is also working on enterprise security offerings.

Despite significant advancements in Web3 technology, dApp developers still need help with custom infrastructure, incompatible languages, protocols, and security solutions. This leads to a drag on developer productivity and numerous opportunities for mistakes with devastating consequences. Cubist's modular set of security-focused dev tools brings software engineering best practices to the dApp lifecycle, from Continuous Integration (CI) testing to push-button deployment backed by secure credential management. Its secure-by-design tooling enables developers to create the best applications without being bogged down by complex interfaces and infrastructure.

Cubist Inc has announced the successful close of its $7 million seed funding round. The funding round was led by Polychain Capital and featured participation from crypto venture capital and strategic investors such as dao5, Amplify Partners, Polygon, Blizzard, Axelar, and more. Cubist will use the seed funding to expand its team, accelerate product development, and scale its technological capabilities.

Toku

Toku provides intelligent payment optimization software that solves the problem of manual and inefficient collection in LatAm. In the face of increasing regulatory scrutiny in web3, Toku provides its customers peace of mind by ensuring 100% tax compliance on all token-based compensation in over 100 countries globally.

Toku originated from the conviction that nearly all tokens can and are used to compensate employees. This belief led the company to focus on token-based compensation and tax compliance as a problem affecting the entire crypto ecosystem.

Toku's services include token-based payroll, grant administration, employment and tax compliance, and WorkDAO – a unique set of employment and compensation services tailored for DAOs.

Toku announced that it had raised $20 million in funding from a consortium led by Blockchain Capital, with participation from Protocol Labs, GMJP, OrangeDAO, Orrick, Reverie, Quantstamp, Next Web Capital, and prominent angel investors like Protocol Labs founder Juan Benet and Alchemy co-founders Nikil Viswanathan and Joe Lau.

The investment will accelerate Toku's global expansion and scale its platform to support the entire crypto ecosystem. Their vision is to make it simple for organizations, from traditional companies to DAOs, to compensate employees and contractors with tokens globally while complying with existing laws and regulations.

Redeem

Redeem aims to bring NFTs into the mainstream by making transfers as easy as sending a WhatsApp message or SMS. The company's service allows users to connect any blockchain wallet on any network to their phone number, facilitating the redemption of tickets, loyalty points, gaming items, and more by scanning a QR code.

The Redeem protocol streamlines the exchange of NFTs through messaging services like iMessage, WhatsApp, and SMS, eliminating the need for complicated crypto interfaces or gas fees. Redeem believes NFTs and smart contracts are fascinating because they can serve as ticket credentials, collectable digital certificates, or membership cards that can live outside major tech companies' constraints.

Redeem is blockchain agnostic, supporting NFTs on various blockchains such as Ethereum and Solana and allowing users to connect NFTs to wallets supported by Polygon and Metamask. Redeem envisions a simple, open ecosystem for users who can benefit from Web3 without understanding the underlying technology.

Redeem has raised $2.5 million in pre-seed funding. Crypto venture capital investor Kenetic Capital led the round, with contributions from Monochrome Capital, VC3 DAO, The Fund, Flyover Capital, CMT Digital, KCRise Fund, and KESTREL 0x1. The funds will support Redeem second-quarter product launch and enhance its core tech.

Narwhal Finance

Narwhal Finance is a decentralized social trading perpetual exchange. It aims to be the #1 decentralized cross-market trading platform by combining a full-scale endless futures DEX with the power of social trading through its Copy Trading vaults. Narwhal Finance is a decentralized trading platform with unique features such as decentralized social trading, actual yield through innovative vault design, a next-gen trading engine for various asset types, a community-driven approach, and a diverse selection of assets with high-leverage options.

Narwhal Finance's unique solution for social trading allows for leveraged trading of all asset classes through synthetic assets. Liquidity providers on Narwhal can earn yields from trading fees and top traders' performance, making it a profitable opportunity for everyone involved. The platform's team boasts expertise and innovative technology with the potential to disrupt the decentralized perpetual trading space.

Narwhal Finance recently secured $1 million in seed funding led by Animoca Ventures. The funding will enable Narwhal Finance to execute its vision of providing a decentralized leveraged trading platform accessible to all.

Animoca Ventures, the lead crypto venture capital investor in the funding round, recognizes Narwhal's potential to disrupt the decentralized perpetual space. The venture firm sees tremendous potential in the partnership and looks forward to supporting Narwhal Finance as it grows and innovates.

Scroll

Scroll is a new Layer-2 solution that provides unlimited scalability, lightning-fast confirmation latency, complete decentralization, and trustless privacy. It does so by building upon zk-Rollup and high-performance off-chain distributed systems.

Scroll, recently raised $50 million in a funding round led by Polychain Capital, Sequoia China, and Bain Capital Crypto, with a reported valuation of $1.8 billion. Scroll is part of a group of Ethereum scaling networks employing zk-rollups, such as Polygon, StarkWare, and Matter Labs. Its core values of community-driven development, security-first approach, and decentralization provide a competitive edge. Following a successful pre-alpha testnet phase with one million unique addresses and 16 million transactions, the mainnet is set to launch in the next quarter.

The funding will help Scroll expand its team from around 60 to nearly 100 members, continue product development, and broaden its ecosystem. Scroll's achievements contribute to Ethereum's ecosystem and address its scalability challenges. The new funding brings Scroll's vision of scaling Ethereum to a billion users closer to reality.

Insrt Finance

Insrt Finance is a permissionless access layer designed to provide retail users, treasuries, and institutions with a seamless experience for exposure and speculation with non-fungible assets. The protocol aims to develop an architecture integrating with

NFT finance infrastructure to create a one-stop solution for non-fungible asset exposure. NFT finance is poised to grow beyond digital art and PFPs to encompass various asset classes, including financial NFTs, GameFi assets, and financialized social graphs. However, the NFT finance space faces scaling issues due to fragmentation and complexity in UX, making it difficult for users to interact with NFT trading platforms and financial markets.

Insrt Finance aims to address these issues by making NFT finance accessible to a broader market, providing the necessary liquidity for NFT finance to scale. Its products will integrate with several primitives across the space, offer a straightforward user experience and world-class analytics, and allow users to calibrate their exposures based on their risk-return profiles.

ShardVaults, Insrt's initial MVP mechanism, combines spot exposure to NFT PFP assets with yield-farming strategies. The goal is to provide a more familiar NFT finance experience for casual and hardcore traders and speculators while reducing entry prices for exposure to blue-chip assets.

Insrt Finance has raised $2.2m in our pre-seed round from Hashkey Capital and Infinite Capital as our co-lead investors, with additional participation from Apollo Capital, Three Sigma, Caballeros Capital, Parc Capital, Sky9 Capital, County Cap, WWVentures and a cohort of native crypto angel investors. The funding round for Insrt Labs demonstrates the growing interest in NFT finance protocols, which could help make NFT investing more accessible and profitable for a broader range of investors.

March Crypto Venture Capital

The past month has seen a slight decline in crypto venture capital. This dip in funding and projects could be due to the fact that Silicon Valley Bank (SVB) has fallen, and most of the biggest Crypto Venture Capital firms had capital tied up there. Now that the SVB situation is clearing up, April could be a month it picks back up again.

To read further, our article on crypto venture capital in April is out.