The Return of Stablecoins, The Top 10 Crypto Venture Capital Raises in September

Introduction

According to DeFi Llama, 53 cryptocurrency projects secured funding in September. The total capital raised increased month over month, with $352 million raised in September compared to $278 million in August, marking a 26.7% increase. This increase can be attributed to the projects and venture funds getting back in the office. The month of August is very slow due to summer break and in September everyone gets back to the office.

Now, let's focus on the standout performers of September. Certain projects, particularly those focusing on payment railways and yield bearing stablecoins, attracted significant interest and capital.

Let's now introduce the top ten projects that successfully raised capital in September despite market turbulence. These projects demonstrate that innovation and determination can still triumph in the face of fluctuating market dynamics. Let's explore their stories and celebrate their achievements.

Mountain Protocol

Mountain Protocol (website) has started the run of yield-bearing stablecoins. USDM is touted as the first nationally-regulated yield-bearing stablecoin, it's licensed by the Bermuda Monetary Authority. Designed primarily for non-U.S. users, USDM offers a gateway to U.S. Treasury yields.

As an ERC-20 token, USDM can seamlessly integrate with most of DeFi protocols. What sets it apart is its unique backing by short-term U.S. Treasuries. Users holding USDM benefit from daily rewards, thanks to a rebasing mechanism that currently offers a rate of 5% APY. This approach is reminiscent of mechanisms used Lido Finance's stETH. However, USDM is not accessible to U.S. customers, and it hasn't been registered as a U.S. security. This exclusivity is a strategic move to navigate regulatory landscapes while offering a stablecoin that bridges TradFi with DeFi.

Stablecoins are viewed by Mountain Protocol as a game-changer in blockchains. Yet, they've noticed a shift as risk-free yields around 5% seem to be pulling users towards traditional finance. This shift is evident in the dwindling supply of Ethereum stablecoins, now around $74 billion. Due to this, Mountain Protocol was able to raise fresh capital. Nic Carter from Castle Island Ventures lead the funding round. This round drew participation from big names like Coinbase Ventures and New Form Capital, to name a few. The exact fundraising figures are under wraps due to regulatory constraints.

Topic Market

Topic Market (website) is serving as a decentralized marketplace, Topic Market offers users the opportunity to trade topics in a manner similar to trading stocks or crypto. Each topic on the platform represents a specific market sentiment or trend, allowing users to speculate on its future popularity and relevance.

Topic market works when a user creates a topic, it is minted as an ERC-20 token, making it tradable just like any other cryptocurrency. As more users buy into a topic, its value increases, reflecting its growing popularity. Conversely, if interest in a topic wanes, its value decreases. This dynamic pricing mechanism ensures that the market remains fluid and responsive to real-time shifts in sentiment.

A feature of Topic Market is its transparent and fair pricing mechanism. Prices are determined algorithmically, based on a combination of supply and demand dynamics. As demand for a topic rises, its price increases, and as demand drops, the price decreases. This ensures that prices are always a true reflection of market sentiment, free from manipulation or external influence.

The platform announced a $2 million investment from Bakery Incubator. Topic Market is well-positioned to further its mission, expand its offerings, and solidify its place as a leading decentralized marketplace for trading topics.

Parallax

Parallax (website) offers a streamlined solution to cross-border payments, a challenge that has long plagued businesses and individuals. Founded with a vision to simplify global transactions, Parallax is dedicated to removing the friction often associated with international payments. Their platform allows users to effortlessly send and receive money across borders, ensuring that transactions are not only faster but also more cost-effective.

One of the features of Parallax is its approach to payments. Users can opt to get paid in USDC or other currencies. This method offers a blend of the traditional financial world's stability with the flexibility of crypto. Parallax ensures that payments are secure, transparent, and instantaneous. For those unfamiliar with the crypto realm, the platform provides a comprehensive guide on how to get paid in USDC, making the process accessible even to novices.

Recently, Parallax secured $4.5 million in funding. Dragonfly Capital lead the round with help from Circle Ventures, General Catalyst, gumi Cryptos Capital, Palm Drive Capital, Comma Capital, Firsthand Alliance and angels like Balaji. This influx of capital is a testament to the industry's confidence in Parallax's potential to revolutionize cross-border payments.

Essential

Essential (website) aims to simplify the complexities of the DeFi ecosystem, making it more accessible and user-friendly. The idea is to build intent-centric infrastructure. An intent is a message signed by a user to express a desired outcome. It contains information about certain parameters, and a solution is only valid if the conditions relating to those parameters are met. Unlike a transaction, an intent describes an ideal end state, rather than a set of instructions to be executed. Intents are journey-agnostic. As long as the desired outcome is reached according to the rules set by the user, the path to that destination is inconsequential to the user.

They believe in a future where everyone, regardless of their technical expertise, can benefit from the vast opportunities that DeFi presents. This vision is underpinned by a mission to create a platform that's intuitive, transparent, and reliable. Essential is committed to delivering a user experience that's seamless and efficient, ensuring that even those new to the world of DeFi can harness its potential.

Recently, the platform announced a successful seed funding round, securing $5.15 million. The round was led by Maven 11, with participation from investors including Robot Ventures, Karatage, Batu, Skip, James Prestwich, Brandon Curtis, and Eclipse founder Neel Somani, among others. With this influx of capital, Essential is well-positioned to further its mission, expand its offerings, and continue its journey towards making decentralized finance accessible to all.

Zunami Protocol

Zunami Protocol (website) is designed to bring tools and mechanisms that enhance stability and yield optimization.

A standout feature of Zunami Protocol is the Zunami APS . This mechanism aims to ensure that stablecoins maintain their peg to underlying assets. By leveraging algorithmic strategies, Zunami APS dynamically adjusts supply and demand, ensuring that stablecoins remain resilient against market volatilities and maintain their pegged value. This approach not only enhances the stability of the DeFi ecosystem but also instills confidence among users and investors.

In addition to the APS, Zunami Protocol has introduced ZETH, a product designed to optimize Ethereum yields. ZETH is a representation of staked Ethereum that earns yield over time. By holding ZETH, users can effortlessly benefit from the compounding interest on their staked Ethereum, making it easier for those looking to maximize their returns in the Ethereum ecosystem.

Zunami Protocol announced their angel fundraising round, which concluded successfully with participation from Cream Finance, as well as individual investors such as Curve founder Michael Egorov, Mr. Block, Convex members with Twitter handles C2tP and Winthorpe, Twitter user Hubirb, and other Stake DAO contributors, and AladdinDAO core contributor pauls. The funds raised in this round will be used for the development and auditing of Zunami V2, which is planned to launch in November.

AnchorWatch

AnchorWatch (website) provides institutional-grade custody services and regulated insurance that make owning bitcoin simpler and safer for businesses, fiduciaries and estates. You hold your Bitcoin, AnchorWatch holds the risk.

The company's mission revolves around the belief that Bitcoin's decentralized nature shouldn't come at the cost of security. By integrating multisig technology, AnchorWatch offers an added layer of protection, requiring multiple signatures for transactions. This approach significantly reduces the risk of unauthorized access or theft. Recognizing that even the most secure systems can face vulnerabilities, they've incorporated insurance into their offering. This means that, in the rare event of a breach or loss, users have a safety net, ensuring their assets are protected financially.

AnchorWatch's vision is clear: to make Bitcoin security both robust and accessible. They envision a future where every Bitcoin holder, regardless of their technical expertise, can benefit from top-tier security combined with the peace of mind that insurance brings.

Recently, the company announced a successful funding round where they secured $3 million. This investment, backed by Ten31 with Axiom BTC, Timechain, Bitcoin Opportunity Fund, UTXO Management and other , is a testament to the rise of Bitcoin focused investments. With these funds, AnchorWatch can expand its reach, and continue its journey towards making multisig Bitcoin insurance a standard for all.

Pimlico

Pimlico (website) is an infrastructure platform for building the next generation of smart accounts. If you are developing an ERC-4337 smart account, Pimlico provides bundlers, verifying paymasters, ERC-20 paymasters, and much more to help build a more stable wallet and iterate faster.

Pimlico has previously launched a suite of three products. Pimlico’s bundlers have been allowing the reliable and fast relaying of smart account transactions on-chain, verifying paymasters have been acting as gas sponsorship modules, giving developers an easy way to sponsor fees for their users on more than 15 chains, and Pimlico’s ERC-20 paymasters have given developers the power to provide users the option of paying with ERC-20 tokens such as USDC and DAI for transaction fees.

Pimlico is driven by a clear mission: to foster a more inclusive and open financial system. The platform's emission strategy aligns with this mission, ensuring a fair and transparent distribution of rewards to its users. By prioritizing community engagement and equitable distribution, Pimlico is setting the stage for a more democratized DeFi ecosystem. Pimlico envision a future where financial empowerment is within everyone's reach, and barriers to entry are a thing of the past.

This vision, combined with Pimlico's innovative approach, has garnered significant attention from the investment community. Recently, the platform announced a successful pre-seed funding round, raising $1.6 million. This round was led by 1confirmation, with further participation from Safe, A16Z and Consensys. With this capital influx, Pimlico can further refine its offerings, expand its user base, and solidify its position.

Freatic

Freatic (website) is designed to provide a seamless interface, bridging the gap between complex blockchain technologies and everyday users. The team behind Freatic recognized the challenges and intricacies often associated with decentralized platforms, which can be daunting for many. This realization spurred the creation of Freatic, a platform that simplifies these complexities, making decentralized systems more accessible and user-friendly.

Freatic currently has 3 products live. Capture The Alpha, currently implemented on Arbitrum, introduces a competitive on-chain reputation system where individuals can register a piece of information and keep it secret with the guarantee that it won’t become public until a set of conditions triggers it, such as time passing or a certain number of people discovering it.

The Alpha Factory, which operates on Polygon, facilitates the curation of unique crypto insights among individuals while incentivizing truthful participation through a peer consistency mechanism.

Since 2020, hotnewcrypto has been the first service that detects, curates, and presents a leaderboard of early crypto projects. The platform enhances the deal flow of investors by connecting them with the stealthiest crypto startups that are about to be launched.

Recently, Freatic announced a significant milestone in their journey, securing a seed funding round of $3.6 million. This funding round was led by a16z Crypto. With this financial backing, Freatic is can accelerate its growth, refine its offerings, and further its mission of making decentralized systems accessible to all.

LayerN

LayerN (website) is a hyperperformant rollup network designed to scale financial applications on Ethereum. Layer N is composed of hyper-performant and customized modular rollups, with best-in-class scalability, shared communication layers for unified liquidity. As an Ethereum L2, Layer N inherits Ethereum's security and stability, and enables seamless bridging with Ethereum L1.

Diving deeper into its technology stack, LayerN boasts a robust and versatile infrastructure Layer N rollups are fully built in Rust for ground-up maximum performance. This is made possible by leveraging RiscZero for ZKFPs, which supports the RISC-V instruction set. Layer N only generates ZK proofs when necessary. Another significant bottleneck that plagues rollups is the blockspace issue. To address this challenge, Layer N leverages EigenDA. The final key to making everything function seamlessly is a unified messaging layer that connects all rollup instances: the Inter-Rollup Communication protocol (IRC). IRC enables every rollup to seamlessly transmit messages to other rollups and instantly bridge liquidity.

Recently, the platform successfully secured $5 million in funding. With this financial backing, The Round was co-led by the Peter Thiel-backed Founders Fund and the decentralized investment group dao5, as well as Kraken Ventures and Spencer Noon. LayerN plans to release its testnet in one to two months.

Restake Finance

Restake Finance (website) is designed to optimize the staking experience for users, ensuring they maximize their returns without compromising on flexibility.

Restake Finance has introduced the first-ever restaked ether, known as rSTETH. rSTETH allows users to stake their Ethereum and, in return, receive an asset that represents their staked ETH along with the rewards it generates. What sets rSTETH apart is its dynamic nature. Unlike traditional staked assets, rSTETH continuously accrues value, reflecting the rewards generated from staking. This means that holders of rSTETH don't have to wait for specific intervals or go through complex processes to claim their staking rewards. Instead, the value of their rSTETH grows in real-time, simplifying the staking and reward process.

rSTETH offers users the best of both worlds: the benefits of staking Ethereum and the convenience of a liquid asset that can be traded, transferred, or used in other DeFi protocols. By bridging the gap between staking and liquidity.

Restake Finance raised 500,000 USD in Seed Round as it continues its journey at the forefront of modular liquid staking for EigenLayer. Restake raised 500,000 USD at a 5,000,000 USD Valuation with the support from the following groups and individuals; Alfa Dao, DCDAO, Y&M, Moni, Bizyugo, 0xJeff and more.

September Crypto Venture Capital

According to DeFi Llama, 53 cryptocurrency projects secured funding in August. The total capital raised increased month over month, with $352 million raised in September compared to $278 million in August, marking a 26.7% increase.

What can we expect in the coming month? We anticipate these trends to persist, but economic changes could induce some shifts. Global political issues and new crypto regulations could inject uncertainty into the market, potentially impacting the volume of investment and the number of deals made. Furthermore, broader economic conditions, including inflation rates, interest rates, and the performance of traditional financial markets, will also sway investor sentiment and activity among crypto venture capital firms.