Author: RootData Research
I. Overview of Web3 Financing in Q2 2024:
Total financing reached US$2.75 billion, a year-on-year increase of 38.9%
Total financing in the social track surged by 650% month-on-month
II. Distribution of project financing amounts in Q2 2024:
The total number of mid- and late-stage financing in Q2 increased by 20.7% month-on-month
III. Ranking of institutional activity in Q2 2024:
The total investment of the top ten institutions increased by 2% month-on-month.
Animoca Brands invested 36 times and became the most active investment institution in Q2.
IV. Fundraising of Web3 investment funds in Q2 2024:
Total fundraising amount of Web3 investment funds reached US$1.38 billion in the first half of the year.
Airdrop season is here as expected, high valuation and low circulation model may suppress coin price performance
Competition for Binance List Token is fierce, and it is expected that more than 30 large projects will conduct TGE in Q3
The core brands in the Web3 field are distributed in exchanges, underlying public chains, Web3 media and analysis tools
The X Hot Surge List is easier to discover Alpha projects and is highly correlated with investor sentiment
The total number of mid- and late-stage financing in Q2 2024 increased by 20.7% month-on-month. This trend may reflect that as the market stabilizes, investment institutions are more inclined to make strategic large investments in advance. Animoca Brands became the most active institution in Q2 with 36 investments. The investment of the top ten institutions in the GameFi track increased by 71% month-on-month.
Paradigm announced the completion of US$850 million in fundraising, becoming the largest fund-raising event in Q2 and even in the first half of 2024. In the bull market that started at the end of 2023, the total fundraising of Web3 funds was more than 10 times lower than the previous bull market, and the BTC price was no longer driven by the inflow of Web3 funds.
When high FDV and low circulation projects were about to TGE, the search volume reached a peak, but then dropped sharply. Binance List Token competition is fierce: the average valuation of Launchpool projects reached 217 million US dollars, and the institutional investment rate was less than 2%. It is expected that more than 30 large projects will conduct TGE in Q3.
2024 Q2 Bitcoin price trend and total financing amount of Web3 industry Source: RootData
2024 Q2 Bitcoin prices experienced significant fluctuations. On April 8, the price of Bitcoin reached a quarterly high of US$71,630, and then fell to a quarterly low of around US$58,300 on May 1. As of June 30, the price of Bitcoin fell by about 13% from the beginning of the quarter. The total net inflow of Bitcoin spot ETF in Q2 reached US$2.394 billion, down 80% from Q1. As of June 30, the asset management scale was US$51.127 billion, down about 12.4% from Q1. In this complex market environment, the financing heat of Web3 primary market remains unabated. According to RootData statistics, in Q2 2024, there were 418 financing events in the Web3 primary market, with a total financing amount of US$2.75 billion, a year-on-year increase of 38.9%.
Top 3 tracks for investment and financing in Q2 2024 Source: RootData
According to RootData statistics, the top three tracks in terms of financing amount in Q2 are infrastructure, DeFi and social. The total financing amount of the infrastructure track reached US$1.016 billion, a month-on-month increase of 145%. It is worth noting that the social track has emerged, with a total financing amount of US$227 million, a surge of 650% month-on-month and a year-on-year increase of 261%.
The strong performance of the infrastructure track is related to the large financing of multiple Layer1 and Layer2 projects, such as Monad's financing of US$225 million and Berachain's financing of US$100 million. In the DeFi track, there are 56 projects with million-dollar financing, mainly in the seed round, indicating that new projects are emerging in large numbers. The biggest reason for the explosive growth of the social track may be that projects represented by Farcaster have successfully balanced technological innovation and user experience, while cultivating a high-quality, low-noise community culture. This innovative model may solve the sustainability issues of early SocialFi projects and also provide new possibilities for attracting a wider user group, thereby promoting the rapid development of the entire track and a large influx of investment.
Distribution of project financing amounts in Q2 2024 Source: RootData
From the perspective of financing amount range, the number of early-stage investment (below $5M) projects in Q2 was 160, a slight decrease month-on-month; the number of mid-term investment ($5M-$10M) projects was 79, a year-on-year increase of 61.2%. The total number of mid- and late-stage financings reached 146, a month-on-month increase of 20.7%. This trend may reflect that as the market stabilizes and is preparing for the expected next round of market gains, investment institutions may prefer investment opportunities that can be exited in the short term.
The top five projects in terms of financing amount in Q2 2024 received a total of US$725 million in financing, an increase of 81.25% compared with Q1. Among them, Monad ranked first with a financing amount of US$225 million led by Paradigm. It is worth noting that Farcaster completed US$150 million in financing with a valuation of US$1 billion. Previously, the overall financing status of this track has been relatively sluggish, and the total financing amount of projects that disclosed financing amounts in Q1 was only about US$70 million. In addition, Berachain's valuation has reached US$1.5 billion in its Series B financing in April 2024. Its valuation has increased by 257% in one year.
Top 5 Financing Amounts in Q2 2024 Source: RootData
Ranking of Institutional Activity in Q2 2024 Source: RootData
According to RootData data, the top ten investment institutions with the most investments in Q2 2024 participated in a total of 202 investments, an increase of about 2% month-on-month. OKX Ventures ranked first with 30 investments in Q1. Although it dropped to 25 in Q2, it remained active. Infrastructure is still the most popular track, with the top ten institutions investing 81 times in this track, accounting for about 40% of their total investments in Q2.
The top ten investment institutions with the most investments in Q2 invested 53 times in the GameFi track, an increase of 71% compared with Q1. This explosive growth may be due to the fact that projects in this track are shifting from a simple "play and earn" model to a more complex and attractive gaming experience. This shift not only improves the quality of games and user experience, but more importantly, maintains the sustainability of the economic model. In contrast, the DAO and NFT tracks, which lack innovation, continued the sluggish state of Q1.
View real-time data of institutional on-chain holdings: OKX Ventures; HashKey Capital; The Spartan Group
Web3 venture capital fund fundraising quantity and amount (2015-2024Q2) Source: RootData
Although the pace of capital entry has slowed down in the past two years, it is still much higher than in 2020 overall and shows an upward trend. In the first half of 2024, Web3 funds have completed fundraising of US$1.38 billion, of which Paradigm announced on June 13 that it had completed fundraising of US$850 million, becoming the largest fund raising event in Q2 and even the first half of 2024.
In the bull market rising stage that started at the end of 2023, the total fundraising of Web3 funds was more than 10 times lower than the previous bull market, and the price of Bitcoin was no longer driven by the inflow of Web3 funds. This may be because traditional high-net-worth users are more cautious and invest in Web3 currencies through compliant channels such as ETFs. They are also worried about becoming the ones who exit the last bull market, thus driving the rise of Bitcoin alone.
5.1 Airdrop season is here as expected, high valuation and low circulation model may suppress the performance of currency prices
RootData Q2 hot search Token list (Top12) Source: RootData
In the second quarter, Bitcoin fluctuated widely between US$57,000 and US$72,000. Many star projects chose to conduct TGE during this window period, such as Wormhole, io.net, zkSync, Layerzero, Blast, etc. Among the 12 most searched projects that have conducted TGE in Q2, it was found that the search volume reached a peak when the project was about to conduct TGE, but then dropped sharply. At the same time, the attention value is significantly affected by the price of Bitcoin and is closely related to the confidence of the Web3 market.
Many high-profile projects have the halo of "high valuation and low circulation". RootData's previous research pointed out that the average valuation of Binance Launchpool projects in the past three years was US$217 million, and the average valuation of OKX Jumpstart projects was US$373 million. In addition, for projects with FDV within US$1 billion and not listed on Binance, only more than 30% of the projects did not have a primary and secondary valuation inversion.
Between 2021 and 2022, a large amount of capital poured into the primary market, adopted aggressive valuation strategies, and was in an optimistic market sentiment. Many Web3 funds blindly chose high-valuation investment strategies. However, these projects failed to demonstrate a sustainable business model. At the same time, the shrinking liquidity brought about by the US dollar interest rate hike has also had an impact on the Web3 market, which may be one of the external reasons why investors are reluctant to buy new tokens.
5.2 Binance List Token Competition is fierce, and it is expected that more than 30 large projects will conduct TGE in Q3
High FDV and large financing projects may be TGE in Q3 Source: RootData
The Q3 TGE project list released by RootData includes 30 star projects with large financing and high FDV, such as Monad, Fuel, Scroll, Succinct, etc., which have a high probability of being listed on Binance.
According to statistics on the investment portfolios of 288 investors, the average number of projects listed on Binance Launchpool accounts for no more than 2% of their investment portfolios. Of the nearly 30 Binance Launchpool projects, 21 are invested by Binance Labs, accounting for more than 11% of their investment portfolios.
Due to Binance's trading depth and slippage advantages, as well as the competitiveness of contract rates, Binance's highly competitive listing environment has a profound impact on the market. Project parties who choose to conduct TGE on Binance can effectively utilize its market advantages and platform resources, laying a good market foundation for the long-term development of the project.
5.3 The core brands in the Web3 field are distributed in the fields of exchanges, underlying public chains, Web3 media and analysis tools
X Influence Index Source: RootData
The X Influence Index launched by RootData conveniently shows users the most influential Web3 projects, of which the core 12 projects are distributed in 4 key areas:
Exchanges: Coinbase, Binance, Uniswap
Web3 media: CoinDesk, The Block, Cointelegraph
Analysis tools: CoinMarketCap, Messari
5.4 X Hot Surge List is easier to discover Alpha projects and is highly correlated with investor sentiment
As a market dynamic observation tool, the X Hot Surge List has quickly attracted many potential Alpha projects and is updated frequently due to its close linkage with the X platform data. At the same time, the list has become an important window for investors to understand market sentiment. The popularity value showed an overall downward trend in Q2:
April: Web3 market sentiment is optimistic, and projects are highly active
May: Market volatility, investors are cautious
June: BTC rebounded but did not break the previous high, market liquidity declined, and social popularity dropped to freezing point
RootData, founded by Pan Yubo and Quan Yu, is transforming Web3 navigation with its comprehensive database of over 13,000 projects and real-time data integration. Recently, they secured $1.25 million in funding and partnered with OKX Wallet to enhance user access and decision-making.
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