The Funding: Ethereum restaking, DePINs, Bitcoin ecosystem and RWA tokenization lead crypto VC trends

Crypto venture capital funding has seen a notable resurgence this year, with investors injecting over $4 billion into startups. Four areas, in particular, have witnessed increased investment activity: Ethereum restaking, DePINs (decentralized physical infrastructure networks), the Bitcoin ecosystem, and RWA (real-world asset) tokenization.

Ethereum restaking, a relatively new vertical, has grown substantially this year thanks to its pioneering protocol, EigenLayer.

EigenLayer facilitates the restaking of ether (ETH) and liquid staking tokens with validators in other blockchain networks, enabling users to earn additional rewards. In less than a year, the protocol has accumulated nearly $15 billion worth of assets. EigenLayer's success has spurred the launch of several EigenLayer-based liquid restaking platforms, which have collectively garnered over $9 billion in assets.

All three leading EigenLayer-based Ethereum liquid restaking protocols — Ether.Fi, Renzo and Puffer Finance — have raised funding this year. In February, Ether.Fi raised a $27 million round co-led by Bullish and CoinFund. Puffer Finance followed suit with an $18 million Series A round in April, co-led by Brevan Howard Digital and Electric Capital, bringing its valuation to $200 million, as reported exclusively by The Block at the time. Renzo, meanwhile, raised $3.2 million in seed funding led by Maven11 in January, valuing it at $25 million at the time. Both Puffer and Renzo received additional funding from Binance Labs recently.

Secondly, DePIN projects are gaining traction, particularly those operating on the Solana blockchain. Several DePIN projects, including Io.net, peaq, IoTex, Natix, and SendingNetwork, have all raised funding in recent months. Io.net, for instance, reached a $1 billion token valuation in March, two sources told The Block at the time. DePIN projects leverage blockchain technology to decentralize their physical hardware infrastructure and incentivize users with tokens for expanding their networks. As of April this year, around 70 projects have collectively raised about $192 million across the DePIN and DeAI (decentralized artificial intelligence) categories, per The Block Pro's Funding Dashboard.

The Bitcoin ecosystem is rapidly expanding, too, with startups building on the network witnessing increased investment activity. So far in 2024, there have been more Bitcoin ecosystem-related deals than in all of 2023 — 81 deals year-to-date compared to 77 in 2023 — according to The Block Pro's Funding Dashboard.

Last but not least, the tokenization category is also gaining popularity, with several startups in this vertical — including Securitize, Centrifuge and Backed — all securing funding in recent months. Over 25 tokenization-related startups have raised a total of $80 million this year as of April, according to the dashboard.

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