Crypto Venture Capital Landscape: Top 10 Newly Funded Projects in May 2023

Introduction

According to DeFi Llama, 61 crypto projects raised capital in May. The total capital raised month over month increased, with $603,09 million in May compared to $547,25 million in April (10.x% increase). This increase can be described by crypto venture capital firms starting to see a turn in the market. The steady number of projects funded indicates that investor interest in the crypto space remains consistent. If these projects are raising more money, it suggests a potential growing investor confidence in the sector's profitability and future potential.

Now let's turn our spotlight to the rockstars of May. There were some clear winners in the capital-raising arena. In the spirit of the times, projects flexing their muscle in roll-up protocols or Web3 music were attracting substantial interest and capital. Meanwhile, the once star-studded NFT platforms found themselves in the unusual position of wallflowers, struggling to pull in the same levels of capital as they once did.

Get ready, as we are about to introduce the top ten projects that successfully navigated the market turbulence to raise capital in May. These ventures serve as clear evidence that even in the face of fluctuating market dynamics, innovation and determination still have the potential to triumph. Let's delve into their narratives and acknowledge their accomplishments.

Fare Protocol

FARE Protocol is a novel cryptocurrency startup that recently secured $6.2 million in seed funding. Fare Protocol will become an ecosystem where different DeFi projects can launch. The platform is known for its innovative approach of using probability smart contracts, a unique technology that activates based on transparent, on-chain events influenced by probability variables. A key application of these contracts is the randomized minting and burning of FARE tokens.

One of the fascinating aspects of FARE Protocol is the unique risk-reward system it employs. The probability of a token being burnt (or lost) is higher than that of minting (or winning). While this may initially seem reminiscent of a traditional casino model, FARE Protocol diverts from this paradigm significantly. Instead of profits going to a centralized "house," the value derived from lost tokens is distributed across the ecosystem, benefitting the FARE token holders through a deflationary mechanism.

The buzz around FARE Protocol is set to increase as it prepares to launch its ecosystem and native token on Ethereum's layer 2 blockchain, Arbitrum. This move follows hot on the heels of Arbitrum's recent highly publicized airdrop of its long-awaited ARB token and is expected to create a significant sensation in the crypto space.

FARE Protocol's seed funding round was led by Goat Capital, the firm helmed by Twitch founder Justin Kan, and C Squared Ventures. The funding round also saw participation from other notable investors, such as 6th Man Ventures, Arrington Capital, Eniac Ventures, Spark Digital Capital, Morningstar Ventures, Quantstamp, and DWeb3.

Tristero

Tristero Protocol is an innovative crypto startup that aims to revolutionize the way cryptocurrency trading operates. It's poised to create a trustless dark pool using advanced cryptography, making it impossible for anyone, including operators, to see inside the trading pool.

Where Tristero's dark pool distinguishes itself from traditional ones is in its use of zero-knowledge proofs. These mathematical methods enable a party to prove the validity of a statement without conveying any detail beyond the fact that the statement is indeed true. In the context of Tristero's dark pool, this means that nobody, not even Tristero itself, can peek into the trading details. The outcome is a trading environment that is much fairer and more equitable.

Tristero recently secured $4.8 million in seed funding to develop a robust and secure crypto market. Its unique strategy is to use smart contracts to finalize large buying or selling orders, contingent on the availability of a counterparty willing to accept the trade. This approach allows for substantial trades without causing abrupt price movements in the market. The seed funding round, co-led by General Catalyst and Steel Perlot, will help Tristero in its mission to create a genuinely "dark" dark pool. This technology aims to make markets fairer, more transparent, and redistribute wealth from intermediaries back to the investors and company builders.

Tristero is also on track to launch a stablecoin clearinghouse in the second quarter of 2023. This platform seeks to lower the costs associated with cross-chain stablecoin transactions, facilitating the trustless conversion of any stablecoin into any other stablecoin on any blockchain. With the launch of its first actual dark pool later this year, Tristero aims to establish a benchmark in the crypto market that could have far-reaching effects on large-scale trading environments across various markets. In essence, Tristero seeks to prove that anywhere large trades might cause significant price fluctuations could benefit from dark pools, thereby improving market fairness and efficiency.

Smilee Finance

Smilee Finance is a decentralized finance (DeFi) platform that focuses on providing on-chain derivatives enabling volatility trading at scale. The platform aims to become the de-facto liquidity layer and the most capital-efficient primitive for DeFi options and structured products. By modeling liquidity providers as options sellers, Smilee Finance transforms impermanent loss (IL) into a portfolio of options.

Smilee Finance offers decentralized volatility products (DVPs) for liquidity providers (LPs) to hedge against impermanent loss. These DVPs can be divided into two types of strategies: long volatility and short volatility. The platform leverages liquidity from decentralized exchanges (DEXs) to offer maximum composability, creating a new DeFi primitive that uses DEXs as the baseplate.

Recently, Smilee Finance raised $2 million in a seed funding round. The funding round was led by Dialectic, with participation from Synergis Capital, Concave Ventures, Owl Ventures, Yunt Capital, Dewhales Capital, Outlier Ventures, New Order, Multisig Ventures, GTS Ventures, and Strategic Angels including Marc Zeller, 0xSami, and Barry Fried.

The funds will be used to build on-chain derivatives that enable volatility trading at scale and to become the de-facto liquidity layer for DeFi options and structured products. The investors involved in the funding round are not explicitly mentioned in the provided search results.

DoloMite

Dolomite is a platform focused on decentralized exchange margin trading and portfolio management, which just secured significant funding to continue pushing the boundaries of decentralized finance. The main focus of Dolomite is to improve the way decentralized money markets operate, aiming for greater efficiency and a wider range of supported assets. With their groundbreaking design, they hope to attract power users of decentralized finance (DeFi) and enable better integrations with other platforms.

A recent achievement for Dolomite was the full integration of GLP, a yield-generating asset. This allows users to use their GLP as collateral and borrow against it while still earning yields and rewards. Dolomite is the first to achieve this and promises more valuable integrations to come.

Dolomite has successfully raised $2.5 million in a recent round of funding. This significant investment round was led by venture capital firms Draper Goren Holm and NGC, with additional contributions from over a dozen companies, including Coinbase Ventures, WWVentures, and 6th Man Ventures.Dolomite's future plans include integrating more assets and partnerships.

NGC's Chris Miller praised Dolomite's ambitious vision and talented team. He particularly highlighted their focus on efficiency and versatility, making them the ideal choice for traders of all types, from hardcore DeFi users to institutional traders and other protocols. They believe their successful funding round places them in an ideal position to respond to the increasing demand for DeFi protocols and continue innovating in the field.

Anotherblock

Anotherblock is a platform where owners of music sell NFTs containing a share of the streaming royalty rights of your favorite songs. As an NFT owner, you will receive your share of the streaming royalties, which are normally paid out to the owners quarterly, bi-annually, or annually, and the payout is divided between the rights holders based on their share of ownership.

The process for buying an NFT containing a share of streaming royalty rights may vary depending on the platform. However, on anotherblock, you can buy your share as an NFT and earn royalties alongside your favorite artists. As an NFT owner, you will receive your share of the streaming royalties, and you will also get access to exclusive utilities. It is important to note that the royalty structure of NFTs is customizable, and the percentage of sale that goes to the creator can be written into the smart contract of the NFT.

Anotherblock has just secured €4 million (about $4.3 million) in its latest investment round. The round was led by Stride.VC, a UK venture capital firm recognized for supporting successful businesses like Deliveroo and Zoopla. Notably, Axwell from the Swedish House Mafia also supported the round, making him the second member of the group to back anotherblock.

The company previously raised $2.5 million from a variety of sources, including Inventure, a Nordic venture capital firm, and $1.2 million in a pre-seed funding round led by J12. Now, with this new funding, anotherblock plans to grow its global operations and expand its services to more artists and record companies.The company's mission is to change how music ownership works, believing that fans should have the opportunity to own a piece of their favorite songs and earn royalties along with the artists. The platform has already given fans access to streaming rights of popular songs from artists such as The Weeknd, Rihanna, and Martin Garrix.

Hourglass

Hourglass, a cryptocurrency startup, has launched the world's first marketplace for trading Time-Bound Tokens (TBTs). These are unique tokens that represent a user's staked assets in a decentralized finance (DeFi) protocol, based on how long those assets are locked up. The new marketplace lets users trade their position in the queue for accessing their locked-up assets. This essentially means a user can transfer ownership of a staked asset to a buyer. According to Charlie Pyle, Hourglass's founder, a user can simply take a time-bound token and transfer ownership of it.

The launch coincides with the deployment of Lido's Version 2. Lido is currently the biggest liquid staking platform in the DeFi space, holding over $12 billion in value. Hourglass's marketplace will tokenize Lido's withdrawal queue, which otherwise could delay withdrawals for weeks or even months. This way, users can trade their spot in the queue to get liquidity for their staked ether.

How does it work? Basically, users can sell the rights to their locked-up assets' time duration in a secondary market, getting liquidity in return. For instance, if someone stakes 10 Frax ether into the Frax protocol for a month, they will receive 10 TBTs that can be traded in the marketplace. The platform can also offer discounts on TBTs based on how long the asset is locked up. For example, a trader could bid for a 3% discount on ether that has a 10-month lock-up period, with the discount varying according to the lock-up time. These TBTs are issued by smart contracts and are semi-fungible tokens based on the ERC1155 standard. They are non-custodial, meaning the Hourglass team doesn't control the deposited assets.

Aside from launching this innovative platform, Hourglass has also raised $4.2 million in seed funding from investors such as Polychain Capital and Electric Capital. The funds will be used to further develop Hourglass' platform, expand its team and will also be used to support the development of new features and partnerships

Story Protocol

Story Protocol is working on a revolutionary technology aimed at changing how narratives are created. Their platform allows for the creation, management, and licensing of intellectual property (IP) using blockchain technology. By using the blockchain as an IP registry, Story Protocol ensures that ownership of IP is provable and that creators can prevent infringements.

The IP is stored as an encrypted document on the blockchain, and represented by a digital certificate that guarantees tamper-proof proof of ownership with transactions that are timestamped. This fosters transparency and decentralization, which are key principles of blockchain technology. The platform currently has no release date.

Story Protocol recently secured $29.3 million in a seed funding round. The funding round was led by A16z Crypto, Andreessen Horowitz's crypto fund, with other notable investors such as Hashed, Mirana Corp, Samsung Next Fund, and Two Small Fish Ventures also participating. The funds raised will be used to speed up the development of Story Protocol's innovative Web3 platform.With this new funding, Story Protocol is well-positioned to continue developing its Web3 platform and contribute to the digital creation of narrative universes.

The company is led by Seung Soo Kim, who also co-founded Radish Fiction, a company that was bought by Kakao, a Korean social media giant, for $440 million in 2021. The team also includes other co-founders, Jason Levy and Jason Zhao, and CFO Ben Sternberg, all bringing a wealth of experience to the table.

Unitea

Unitea is a loyalty platform that rewards fans for streaming and sharing the music they love. It is a mobile and web-based social music community platform that brings artists closer to their fans by recognizing and rewarding the most engaged fans. Fans can earn Karma, a social currency, for listening to music, sharing it with friends, and engaging with artists. Artists can give back to their most devoted fans while also building their fan base.

This platform has already shown promising results, with over 2,000 reward activations since its inception in 2020. Unitea has collaborated with big names like Procter & Gamble, and has been involved in several music festivals such as Breakaway, Gem & Jam, and Dirtybird Campout.

The engaging content created by fans allows them to earn digital tokens, which can be exchanged for unique rewards, from custom digital assets to concert tickets and meetings with artists. The tangible rewards drive genuine fan engagement, providing artists and brands with valuable insights about fan interactions. Unitea plans to serve as a useful platform for building communities for Web3 music collectives. Unitea, ultimately, aims to revolutionize the music industry by nurturing a closer bond between fans and artists.

Unitea has recently secured $7 million in a seed funding round. The funding, led by prominent investors such as 1st Class Guernsey, Chaos Capital, TokenSociety, and Fuel Venture Capital, will be used to enhance their unique platform and broaden its capabilities. The funds will be used to grow the team and further develop the platform. Unitea have unlocked the key to obtaining significant benefits through the engage-to-earn model within the music space. The platform empowers artists and brands to nurture and expand their passionate fan base organically.

Tanssi Network

The Tanssi network provides developers with tools and services that streamline the process of creating and launching scalable, user-friendly applications. By minimizing barriers to early-stage development, Tanssi promotes faster customer growth and more rapid product iterations. Essentially, Tanssi is simplifying the process of creating scalable blockchain applications.

Tanssi's permissionless protocol differs from other appchain infrastructure protocols in that it offers a dev-friendly environment with a suite of tools and services that eradicate appchain deployment complexities. The protocol is designed to simplify and accelerate appchain deployment for developers, providing them with indispensable tools and services for rapid appchain deployment.The Tanssi Network aims to provide a seamless and effortless deployment of application-specific blockchains

Tanssi's protocol also brings the advantage of shared security and native interoperability from the Polkadot relay chain. This feature simplifies the usually complex and lengthy process of traditional blockchain implementation, making it easier and more efficient for developers.

Moondance Labs, the team behind the development of the Tanssi appchain infrastructure protocol, recently celebrated the completion of a $3 million seed funding round. The investment was led by Arrington Capital, a firm renowned for its work in digital asset management and blockchain-based capital markets. Other contributors to the funding included Borderless Capital, HashKey Capital, D1 Ventures, Hypersphere, C² Ventures, and Jsquare. Going forward, Moondance Labs plans to continue developing Tanssi with key milestones like the Test Network launch expected later this year and the mainnet going live by 2024. To further cultivate a vibrant community of builders and boost interaction with the Tanssi protocol, Moondance Labs will introduce the Tanssi Ecosystem Pioneers program. The ultimate goal is to make appchain deployment easier and more efficient for developers, pushing the boundaries of what's possible in the world of blockchain technology.

Odsy network

The world has seen an increasing demand for interconnected solutions that can handle real-world use cases. However, the absence of a solid infrastructure for decentralized access control has led Web3 developers towards more centralized solutions. The downfall of centralized Web3 giants like Celsius and FTX revealed the dangers of centralized access control in Web3.

Odsy Network plans to address this issue by introducing a novel crypto element known as dWallets (dynamic decentralized wallets). These programmable and transferable mechanisms live on the decentralized Odsy Network and can sign transactions on nearly any blockchain. As blockchains multiply and managing different wallets becomes more challenging, Odsy aims to simplify the process, making it more accessible for widespread use.

dWallets' programmability allows Web3 developers to implement any access control logic in a fully decentralized manner. This could allow for the creation of new solutions, like multi-chain DAOs or wallet marketplaces, as well as the recreation of existing solutions in a trustless manner.

Although still in development, the Odsy Network already has over 10 active projects in its ecosystem. Some of these include VC-backed projects like dWallet Labs and Fun.

The Odsy team has also made significant strides in modern cryptography, enabling the potential of dWallets on the Odsy Network. In the future, the Odsy Network could be the first platform where users can generate signed transactions to other blockchains, such as Bitcoin or Ethereum, alongside a large-scale permissionless set of validators.

The Odsy Foundation, a non-profit aiming to enhance the Odsy Network ecosystem, has successfully raised $7.5M in seed funding. This impressive round, leading to a $250M valuation for the Odsy Network, was spearheaded by Blockchange Ventures with support from numerous venture capital firms and strategic partners such as Rubik Ventures, No Limit Holdings, and Node Capital, among others.

May Crypto Venture Capital

In May 2023, there were about 61 cryptocurrency projects that got money from investors.This number is the same as the month before. The total amount of money they got increased. They got $603.09 million in May, which is a 10.2% increase from the $547.25 million they got in March. The steady number of projects funded indicates that investor interest in the crypto space remains consistent. If these projects are raising more money, it suggests a potential growing investor confidence in the sector's profitability and future potential.

What can we expect next month? We think these trends will keep going, but changes in the economy could cause some shifts. Things like political problems around the world and new rules for crypto could make the market uncertain. This might affect how much money is invested and how many deals are made. In addition, the broader economic conditions, including inflation rates, interest rates, and the performance of traditional financial markets, will also influence investor sentiment and activity in the crypto venture capital space.

But there's still a lot of excitement about blockchain and DeFi, and more and more industries are using digital assets. This should keep investors interested. So, despite some ups and downs in the short term, things still look good for cryptocurrency investments in the long term.

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