Investors Capitalize on Security
Total funding this week was little changed on a week-over-week basis, with $286 million raised compared to $278 million last week. Infrastructure continued to lead funding, with an extension round from hardware wallet manufacturer Ledger ($109m) accounting for over one-third of total funding for the week. Ledger has benefited from implosions on centralized exchanges which led to an increasing demand for cold storage. They raised at the same valuation as their last round in 2021 ($1.4bn), an impressive feat given a tough fundraising environment where most start-ups are raising down rounds.
DeFi has continued funding momentum, seeing the third week in a row with more capital raised than the last, at $40 million this week. Web3 and NFTs funding pulled back this week, with $28 million raised compared to $90 million announced last week.
Deal of The Week
This week’s deal of the week is EigenLabs, a staking protocol developer who raised $50M in a Series A round led by Blockchain Capital with participation from Electric Capital, Polychain Capital, and Coinbase Ventures, among others. EigenLabs is the developer behind EigenLayer, a restaking protocol that will allow users to “restake” tokens staked on Ethereum to secure protocols other than Ethereum in exchange for protocol fees and rewards. This round comes after EigenLab’s seed round, which raised $14.5M in a round led by Polychain Capital and Etheral Ventures.
Why is this Deal of The Week
Establishing strong crypto-economic security has posed a significant challenge for crypto since its inception. Whether it be the initial stages of Bitcoin or the latest upgrades to Ethereum and other Layer 1 networks, creating a secure crypto-economic system involves navigating complicated problems and making difficult tradeoffs. EigenLayer introduces a novel crypto-economic primitive called restaking, which enhances security. Blockchain security today is fragmented; applications built on top of the Ethereum network are responsible for generating their own security and trust, which can be inefficient and expensive. EigenLabs’ founder describes this issue: “One of the central bottlenecks to innovation in today’s crypto ecosystem is the requirement for projects to bootstrap trust or crypto-economic security. We started working on EigenLayer in the hopes of creating a new model in which developers can easily consume trust, instead of needing to build trust, and design powerful systems of assurances that make the crypto ecosystem safer and more useful.” EigenLayer aims to solve this problem by enabling the restaking of ETH on the consensus layer so that staked ETH can be used to validate more than just Ethereum itself. Users staking ETH will be able to use EigenLayer’s smart contracts to restake their funds to extend crypto-economic security and validation to other applications on the network. This aggregates crypto-economic security and allows for more efficient validation of novel applications built on the Ethereum network.
Selected Deals
Cega is a DeFi-based derivatives protocol with a focus on options. The platform aims to allow users to generate safe yields in varying market conditions. The company has secured $5M in funding through its seed extension round led by Dragonfly Capital. In addition, the funding round also included investor participation from Robot Ventures and Pantera Capital. Cega intends to use the capital raised for workforce expansion, product development, and launch on Ethereum.
Ledger is an infrastructure-based platform aiming to provide its users with a secure hardware wallet solution for digital assets. The company has secured nearly $109M in funding through its Series C extension round at a $1.4B valuation. In addition, the funding round included investor participation from Morgan Creek Capital, True Global Ventures, Digital Finance Group, Vayner Fund, and others. Ledger intends to use the capital raised for product development.
Econia Labs is a DeFi-based platform on the Aptos blockchain aiming to provide users with increased capital efficiency. The platform plans to accomplish this by offering access to decentralized order books. The company has secured $6.5M through its seed round led by Dragonfly Capital. In addition, the funding round also included investor participation from Hudson River Trading, Aptos Labs, Wintermute Ventures, and others. Econia Labs intends to use the capital raised for community initiatives, product development, and workforce expansion.
Fetch.ai (FET 0.74% ) is an infrastructure-based platform aiming to provide application developers with the ability to automate Web3 systems. The company has secured $40M in funding from DWF Labs. Fetch.ai intends to use the capital raised to deploy additional infrastructure and features on its platform.
LI.FI is a DeFi-based platform aiming to provide users with multi-chain liquidity. The platform plans to accomplish this through its SDK (software development kit). The company has secured $17.5M in funding through its Series A round, co-led by Superscrypt a CoinFund. In addition, the funding round also included investor participation from Three Point Capital, Theta Capital, Bloccelerate, and others. LI.FI intends to use the capital raised for product development.
