RootData: 2024 Q2 Web3 Industry Investment Research Report

Author: RootData Research

Table of Contents

1. 2024 Q2 Web3 Financing Overview:

• Total financing reached US$2.75 billion, a year-on-year increase of 38.9%
• Total financing in the social track surged 650% month-on-month

2. Distribution of project financing amount in Q2 2024:

• The total number of mid- and late-stage financing in Q2 increased by 20.7% month-on-month
• The total financing amount of the Top 5 financing increased by 81.25% month-on-month

3. Institutions are active in Q2 2024 Ranking list:

• The total investment volume of the top ten institutions increased by 2% month-on-month
• Animoca Brands made 36 times and became the most active investment institution in Q2

4. Q2 Web3 investment fund fundraising situation in 2024 :

• The total amount of funds raised by Web3 Investment Fund in the first half of the year reached US$1.38 billion
• Investors tend to be cautious and compliant, and ETFs continue to promote the independent rise of Bitcoin

5. Review of hot searches for Q2 projects in 2024:

• The airdrop season is coming as scheduled, high valuation and low circulation model may inhibit currency price performance
• Binance List Token competition is fierce, and it is expected that there will be more than 30 large-scale projects in Q3 for TGE
• The most core brand distribution in the Web3 field In the fields of exchanges, underlying public chains, Web3 media and analysis tools
• X hot surge list makes it easier to discover Alpha projects and is highly correlated with investor sentiment

Abstract

Web3 industry financing will maintain strong momentum in Q2 of 2024, The total amount reached US$2.75 billion, a year-on-year increase of 38.9%. The social track has suddenly emerged, and total financing increased by 650% month-on-month. The total net inflow of Bitcoin spot ETFs in Q2 reached US$2.394 billion, a month-on-month decrease of 80%, and total asset management decreased by 12.4% month-on-month.

The total number of mid- and late-stage financings 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 a fundraising of US$850 million, becoming the largest fund raising event in Q2 quarter and even in the first half of 2024. In the bull market rising stage that started at the end of 2023, the total amount of funds raised by 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.

The search volume of high FDV and low circulation projects reaches a peak when it is about to TGE, but then declines like a cliff. The competition for Binance List Token is fierce: the average valuation of the Launchpool project reaches US$217 million, and the institutional investment rate is less than 2%. It is expected that more than 30 large-scale projects will conduct TGE in Q3.

1. The total amount of financing in Q2 2024 will reach US$2.75 billion, a year-on-year increase of 38.9%; the total amount of financing in the social track surged 650% month-on-month

Q2 Bitcoin Price Trend and Web3 Industry Financing Total in 2024 Source: RootData

The Bitcoin price in Q2 2024 has experienced significant fluctuations. On April 8, Bitcoin price reached a quarterly high of $71,630 before falling to a quarterly low of around $58,300 on May 1. As of June 30, Bitcoin prices were down approximately 13% from the beginning of the quarter. The total net inflow of Bitcoin spot ETFs in Q2 reached US$2.394 billion, a decrease of 80% from Q1. As of June 30, the asset management scale was US$51.127 billion, a decrease of approximately 12.4% from Q1. In this complex market environment, the popularity of Web3 primary market financing continues to grow. According to RootData statistics, a total of 418 financing events occurred in the Web3 primary market in Q2 2024, with a total financing amount of US$2.75 billion, a year-on-year increase of 38.9%.

Top 3 tracks in Q2 investment and financing amount in 2024 Source: RootData

According to RootData statistics, the top three tracks in Q2 financing amount are infrastructure, DeFi and social networking. Total financing in 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 total financing reaching US$227 million, a surge of 650% month-on-month and 261% year-on-year.

The strong performance of the infrastructure track is related to the large financing received by multiple Layer1 and Layer2 projects, such as Monad financing of US$225 million and Berachain financing of US$100 million. In the DeFi track, there are 56 projects with million-dollar financing, mainly in seed rounds, indicating that a large number of new projects are emerging. The biggest reason for the explosive growth of the social track may be that projects represented by Farcaster successfully balance 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, thus promoting the rapid development of the entire track and the influx of large investments.

2. The total amount of mid- and late-stage financing in Q2 increased by 20.7% month-on-month, and the total financing amount of the Top 5 increased by 81.25% month-on-month

Distribution of project financing amount in Q2 in 2024 Source: RootData

From the financing amount range Look, the number of early-stage investment (below $5M) projects in Q2 was 160, a slight decrease from the previous quarter; 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 it may be preparing for the expected next round of market rise, investment institutions are more inclined to invest in investment opportunities that can be exited in the short term.

The top five projects with the highest financing amount in Q2 2024 received a total of US$725 million in financing, an increase of 81.25% compared to Q1. Among them, Monad topped the list with a US$225 million financing led by Paradigm. It is worth noting that Farcaster completed US$150 million in financing at a valuation of US$1 billion. The overall financing status of the track has been relatively sluggish before. The total financing amount of the projects disclosed in Q1 was only about US$70 million. In addition, Berachain’s valuation has reached US$1.5 billion in Series B financing in April 2024. Its valuation increased by 257% in one year.

Top 5 Financing Amounts in Q2 2024 Source: RootData

3. The total investment number of the top ten institutions in Q2 increased by 2% month-on-month. Animoca Brands made 36 transactions and became the most active investment institution in Q2

2024 Q2 Institutional Activity Ranking 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, a month-on-month increase of approximately 2%. OKX Ventures topped the list with 30 transactions in Q1. Although the number dropped to 25 in Q2, it continued to be active. Infrastructure remains the most popular track, with the top ten institutions investing in this track 81 times, accounting for approximately 40% of all their Q2 investments.

The top ten investment institutions in Q2 made a total of 53 times in the GameFi track, an increase of 71% compared to Q1. This explosive growth may stem from the fact that projects in this track are changing from a simple "play and earn" model to a more complex and attractive game experience. This transformation not only improves game quality and user experience, but more importantly It is maintaining the sustainability of the economic model. In contrast, the DAO and NFT tracks, which lack innovation, still continued the sluggish state of Q1.

View real-time data on institutional holdings on the chain: OKX Ventures; HashKey Capital; The Spartan Group

4. Web3 Investment Fund raised US$1.38 billion in the first half of the year. Investors tend to be cautious and compliant, and Bitcoin maintains its independent rise

Web3 Venture Capital Fund Raising Number and Amount (2015-2024Q2) Source: RootData

Public data since 2015 shows that Web3 A total of fields There were 177 fund-raising events, with the total amount raised exceeding US$39.6 billion. Large-scale external capital will drive the bull market explosion from 2021 to 2022, leaving a large number of highly valued projects, such as StarkNet and zkSync.

Although the speed of capital entry has slowed down in the past two years, it is generally still much higher than in 2020 and showing an upward trend. In the first half of 2024, Web3 Fund has completed fundraising of US$1.38 billion. On June 13, Paradigm announced the completion of US$850 million in fundraising, becoming the largest fund raising event in Q2 quarter and even in the first half of 2024.

In the bull market rising stage that started at the end of 2023, the total amount of funds raised by Web3Funds was more than 10 times lower than the previous bull market, Bitcoin price is 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 compliance channels such as ETFs, and are worried about becoming the successors to the exit wave of the last bull market, thus promoting the independent rise of Bitcoin.

5. Review of Q2 project hot searches

5.1 The airdrop season is coming as expected, high valuation and low circulation model may inhibit currency price performance

RootData Q2 Hot Searches Token list (Top12) Source: RootData

Q2 quarter Bitcoin fluctuated widely between 57,000 and 72,000 US dollars. Many star projects chose to conduct TGE during this window period, such as Wormhole, io.net, zkSync, Layerzero, Blast wait. Among the 12 most searched projects that have undergone TGE in Q2, it was found that the search volume reached a peak when the project was about to be TGE, but then dropped off a cliff. At the same time, the attention value is significantly affected by the price of Bitcoin and is closely related to Web3 market confidence.

Many high-profile projects have the aura of "high valuation, low circulation". RootData's previous research pointed out that The average valuation of the Binance Launchpool project in the past three years was US$217 million, and the average valuation of the OKX Jumpstart project was 3.73 One hundred million U.S. dollars. In addition, only more than 30% of projects with FDV within US$1 billion and not listed on Binance have not experienced first- and second-level valuation inversions.

During 2021-2022, there will be a massive influx of primary market capital, adopting aggressive valuation strategies, and under optimistic market sentiment, many Web3 funds blindly choose high-valuation investment strategies. However, these projects failed to demonstrate a sustainable business model. At the same time, the shrinking liquidity caused by the U.S. dollar interest rate hike has also had an impact on the Web3 market, which may be one of the external reasons why investors are unwilling to purchase new Tokens.

5.2 Binance List Token competition is fierce, and it is expected that more than 30 large-scale projects will conduct TGE in Q3

Q3 may be TGE’s high FDV, large-amount financing projects Source: RootData

The Q3 expected TGE project list released by RootData includes 30 large-amount financing, high FDV star projects, such as Monad, Fuel, Scroll, Succinct, etc. have a high probability of being listed on Binance.

According to statistics on the investment portfolios of 288 investors, it was found that the average number of Binance Launchpool projects accounted for no more than 2% of the investment portfolio. 21 of the nearly 30 Binance Launchpool projects were invested by Binance Labs, accounting for more than 11% of its investment portfolio.

Due to Binance’s trading depth and slippage advantages, as well as the competitiveness of contract rates, Binance’s fiercely competitive currency listing environment has a profound impact on the market. The project team chooses to conduct TGE on Binance to 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, among which the core 12 projects are distributed in 4 key areas:

• Exchanges: Coinbase, Binance, Uniswap
• Underlying public chains: Bitcoin, Ethereum, Solana, Polygon
• Web3 media: CoinDesk, The Block, Cointelegraph
• Analysis tools: CoinMarketCap, Messari

5.4 easy to discover Alpha projects, and are highly correlated with investor sentiment

X Popularity List, as a market dynamic observation tool, has quickly attracted many potential Alpha projects due to its close linkage with X platform data, and is updated frequently. At the same time, This list has become an important window for investors to understand market sentiment, and the popularity value showed an overall downward trend in Q2:

• April: Web3 market sentiment is optimistic, project activity is high
• May: Market shocks, investment Investors are cautious
• June: BTC rebounded without breaking the previous high, market liquidity declined, and social popularity dropped to freezing point

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About RootData

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Disclaimer

This report is produced by RootData Research. Neither the information nor the opinions expressed in this report constitute investment strategies or recommendations for anyone. The information, opinions and speculations contained in this report only reflect the judgment of RootData Research on the day this report is released, and past performance should not be used as a basis for future performance. At different times, RootData Research may issue reports that are inconsistent with the information, opinions and speculations contained in this report. RootData Research does not guarantee that the information contained in this report is kept up to date. Reliance on the information in this material is at the reader's discretion. This material is for reference only.

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