Weekly Recap

Weekly funding fell by almost 50% to $182 million, while the deal count fell by about a third to 23. The Infrastructure category led both funding and deal count, bolstered by Avail’s $47 million Series A round. CeFi saw $26 million in funding, including XREX’s $18.75 million strategic round with Tether. XREX will use the funding to help facilitate regulatory-compliant cross-border payments using USDT. Gaming had the second most deals this week (7), with a notable uptick in deal flow over the last two weeks.

There was $108 million in Series A funding across five deals, as more projects are beginning to expand past the very early stages of development and are seeing meaningful adoption and growth. There were only four seed rounds totaling $19 million, a relatively low amount compared to 2024 trends. There was one token sale this week, with Pantera purchasing $5 million of Connext’s token (NEXT) as they rebrand to Everclear and become a clearing layer for intents-based bridges.

A notable M&A deal was announced this week, with Robinhood acquiring Bitstamp for $200 million in cash. Bitstamp was founded in 2011 and is one of the longest standing crypto exchanges. Robinhood will leverage Bitstamp’s 50+ active licenses and registrations to expand its crypto business.

Funding by Category

Funding by Stage

Deal of the Week

Fhenix, the first L2 powered by fully homomorphic encryption (FHE), raised $15 million in a Series A round with participation from Hack VC, Collider, Gate, Amber Group, and others. The Series A round brings Fhenix’s total funding to $22 million. Fhenix uses fully homomorphic encryption from Zama to ensure confidentiality when transacting on its network. Fhenix launched its open testnet called Helium on Tuesday where developers will be able to deploy confidential smart contracts.

Why is This Deal of the Week

Beyond transaction scaling, confidentiality remains a key issue for blockchains if institutional and individual finance is going to be facilitated on open blockchain rails. FHE is a math-based encryption scheme that facilitates data computation without decrypting the data. Therefore, data can remain encrypted throughout the entire computation process, ensuring privacy. Fenix can support end-to-end fully encrypted smart contracts to allow for a new design space for blockchain applications, supporting use cases like confidential voting, anonymous auctions, trustless gaming, DID, private social networks, and more.

Fhenix is also developing an FHE co-processor, which is designed to offload encrypted computational tasks from a host chain (Ethereum / rollup) to a designated processor not native to the host chain, vastly improving the efficiency of FHE operations while maintaining host-chain security. Fhenix recently partnered with EigenLayer to help develop an FHE co-processor. EigenLayer’s security model would ensure the validity of the co-processor’s responses. Fhenix is expected to launch its mainnet in the first quarter of 2025.

Selected Deals

M^0, a stablecoin middleware protocol, raised $35 million in a series A round led by Bain Capital Crypto, with participation from Galaxy Ventures, GSR, and others. M^0 is led by former Maker and Circle employees and allows approved entities to mint stablecoins overcollateralized by US Treasuries. Entities can only be approved by going through the protocol’s governance process, and then collateral will be independently verified, allowing entities to mint stablecoins. M^0 enables issuers from all different countries to become minters, each complying with jurisdictional requirements. M^0 is unique in that it allows minters to keep a competitive share of the yield their underlying collateral is earning while also utilizing the liquidity of minted stablecoins. M^0 is launching on Ethereum in the coming weeks, and the first minter and validator have been approved but will be disclosed at a later date.

Glacier Network, a data-centric blockchain network, raised $8 million across its angel and seed funding rounds, valuing the network at $100 million. The round saw participation from ForesightX, Laser Digital, Kucoin Ventures, Signum Capital, and others. Glacier is building a programmable network for data storage, indexing, and computing to help supercharge AI applications. Glacier Network leverages data from Arweave, Filecoin, and BNB Greenfield and has also built its own data availability layer. Glacier has handled over 10 billion queries and 10.5 million CRUD transactions and has seen over 700k unique addresses on the network. The funding should help Glacier continue improving its traction across the crypto ecosystem.

Avail, a web3 unification layer, and one of our former deals of the week, raised $43 million in a Series A round led by Dragonfly Capital, Founders Fund, and Cyber Fund. The $43 million round was the largest of the week, and the fresh financing brings Avail’s total funding to $75 million as it continues its mission to unify the industry with its Avail Trinity. The trinity is comprised of a data availability layer, a cross-chain coordination hub, and a multi-asset staking solution. Avail’s mainnet and token AVAIL are expected to launch in the coming weeks with its cross-chain coordination hub set for the second half of 2024, and its staking solution in 1H 2025.