Top Web3 Trends for Venture Capital

Venture capital can be seen as a bellwether for the future of the market – these investors are looking to back the technologies and ideas that will shape the industry in the coming months and years. Their decisions are often based on in-depth analysis of market trends, technological innovations and changes in consumer preferences, which allows them to anticipate which trends will be massively developed.

Venture capitalists are always focused not only on the current performance of projects, but also on their potential ability to become part of a larger narrative. This is especially true in a market as dynamic as cryptocurrency, where trends may change every month, but at the same time, long-term prospects for the development of entire industries are being formed.

It's no secret that venture capitalists have a significant impact on the cryptocurrency market. Smart money always knows what narrative will be in vogue and invests in projects that will be able to capitalize on those trends.

By analyzing recent venture capital investments, we can infer which trends and projects will generate interest in the near future.

Andreessen Horowitz (a16z) is a Silicon Valley venture capital fund founded in 2009 by Marc Andreessen and Ben Horowitz. They invest in technology and innovation in sectors such as software, internet, biotechnology and cryptocurrencies.

Through its a16z Crypto Fund, the company supports projects that aim to decentralize the Internet, finance and technology, focusing on creating the future of Web3.

The fund made 3 investments over the summer:

• Story Protocol: Layer 1.
• Morpho: Lending protocol.
• Daylight: Decentralized physical infrastructure networks (DePIN). We talked more about this direction in our Telegram channel.

Multicoin Capital is an American investment company founded in 2017 in the United States, Texas, specializing in early-stage investments in Web3 projects.

Multicoin Capital currently manages several venture capital funds and a hedge fund. In addition, the firm actively manages a long-term private equity portfolio. As part of its venture capital activities, Multicoin Capital invests in both public and private companies.

Its goal is to accelerate the transition from the centralized institutions of the industrial age to the decentralized institutions of the Internet age.

Like the previous fund, Multicoin Capital made only 3 investments over the summer:

• ZkMe: Blockchain Service.
• CrunchDAO: Artificial intelligence.
• Mountain Protocol: Stablecoin.

Polychain Capital (PC) is a venture capital and hedge fund based in San Francisco, California. The firm's founder, Olaf Carlson-Wee, was the first employee of the cryptocurrency exchange Coinbase and left the company in 2016 to start Polychain Capital.

Polychain Capital manages digital assets and invests in blockchain-related companies. The fund launched in 2016 with $5 million in capital raised from thirty investors.

Unlike the previous two funds, Polychain Capital has made many more investments:

Level: Stablecoin.

Solayer: Liquid Staking.

Story Protocol: Layer 1.

Corn: Layer 2.

Sahara AI: Artificial intelligence.

Hyperbolic: Blockchain Service*.

Pac Finance: Decentralized Finance (DeFi).

OpenLedger: Infrastructure**.

Lombard: Decentralized Finance (DeFi).

Pi Squared: Infrastructure.

ORA: Infrastructure.

Nubit: Infrastructure.

* Infrastructure – these are projects that specialize in providing the components and systems that form the foundation of blockchains and ensure their smooth operation.

** Blockchain services are financial instruments in the form of blockchain services and applications. They provide a set of services and operations similar to the traditional banking system: lending, stock exchange trading, bet acceptance, asset management, and others.

Paradigm is a San Francisco-based American investment firm founded in 2018 by Matt Huang (partner at Sequoia Capital) and Fred Ersam (co-founder of Coinbase), focused on early-stage Web3 projects.

Over the summer, the Paradigm Fund invested in four projects:

• Sorella: Decentralized Finance (DeFi).
• MetaDAO: Decentralized Autonomous Organization (DAO).
• Conduit: Infrastructure.
• Symbiotic: Liquid Staking.

Delphi Digital (DD) is an investment firm founded in 2018 that specializes in conducting research for leading cryptocurrency funds, institutions, and investors. It currently operates in three different areas.

The firm's expertise is spread across the following main divisions: Delphi Research, Delphi Labs (a startup accelerator), and Delphi Ventures.

The Delphi Ventures fund was inactive during the summer, but is interested in the TON ecosystem:

• Legion: Blockchain Service.
• Fanton: Gaming.
• Pixelverse: Gaming.

Binance Labs is the investment venture capital arm and incubator of leading cryptocurrency exchange Binance, based in Malta. The fund invests in early stage startups.

Binance Labs aims to expand the Binance ecosystem with a focus on blockchain infrastructure, NFT and DeFi projects.

Binance Labs is one of the largest cryptocurrency venture capital funds in the industry. The number of investments proves it:

• Solayer: Liquid Staking.
• VOOI: Decentralized Finance (DeFi).
• Aggregata: Blockchain Service.
• Sidekick: Social.
• Opinion Labs: Social.
• Corn: Layer 2.
• MyShell: Blockchain Service.
• Sahara AI: Artificial intelligence.
• Pentagon Games: Gaming.
• Particle Network: Layer 1.
• Cycle Network: Infrastructure.
• DILL: Infrastructure.
• aPriori: Decentralized Finance (DeFi).
• Catizen: Gaming.
• Pluto Studio: Gaming.
• Zircuit: Layer 2.
• Infrared: Decentralized Finance (DeFi).
• Rango Exchange: Decentralized Finance (DeFi).

Blockchain Capital was founded in 2013 by Bart Stevens and Brad Stevens and is headquartered in San Francisco, California. The firm is one of the oldest active venture capital funds in the Web3 industry.

This fund was not active during the summer:

• Gameplay Galaxy: Gaming.
• BSX: Decentralized Finance (DeFi).
• Fabric Cryptography: Infrastructure.
• QED Protocol: Infrastructure.
• Mamori: Blockchain Service.

Coinbase Ventures is the venture capital arm of Coinbase, the largest cryptocurrency exchange, focused on Web3 investments. The fund was founded in 2018 in the United States, in San Francisco, California.

It is an equally influential fund, which managed to make quite a few deals over the summer:

• Time Fun: Social.
• Chaos Labs: Infrastructure.
• Satflow: Decentralized Finance (DeFi).
• Morpho: Lending protocol.
• Privy: Infrastructure.
• Spot: Infrastructure.
• Conduit: Infrastructure.
• Squads: Blockchain Service.
• Mountain Protocol: Stablecoin.

Pantera Capital is an investment fund dedicated to investing in early-stage Web3 startups. The fund was founded by the former head of macro trading and CFO of Tiger Management – Dan Morehead.

Pantera launched the first cryptocurrency fund in the US when bitcoin was worth $65 in 2013. Subsequently, the firm launched its first venture capital fund focused exclusively on Web3 investments. Since then, Pantera Capital has been widely recognized as one of the most influential and highly rated funds in the industry.

Pantera Capital invested in several projects over the summer:

• Gamee: Gaming.
• Sahara AI: Artificial intelligence.
• Morpho: Lending protocol.
• aPriori: Decentralized Finance (DeFi).
• B3 fun: Gaming.
• Sentient: Blockchain Service.
• GenomesDAO: Healthcare.
• Nexus Laboratories: Infrastructure.

HashKey Capital is a subsidiary of HashKey Group, a Hong Kong-based technology conglomerate that manages a diverse portfolio of innovative blockchain and financial technology companies.

HashKey Group is a strategic partner of Wanxiang Blockchain Labs, a non-profit organization that supports blockchain entrepreneurs with advice on development, regulation and the digital economy.

HashKey Capital's clients include various financial institutions, high net worth individuals, accredited investors, family offices and venture capital funds.

The last fund on our list, with an impressive number of investments over the summer:

• Moonveil: Gaming.
• Rome Protocol: Infrastructure.
• Compute Labs: Blockchain Service.
• OpenLedger: Infrastructure.
• Sentient: Blockchain Service.
• Prodia: Blockchain Service.
• ORA: Infrastructure.
• Particle Network: Layer 1.
• ZKX: Decentralized Finance (DeFi).
• Halo Wallet: Wallet.
• GoPlus: Blockchain Service.
• Avail: Infrastructure.
• Stash: Social.

Fundamental projects have always occupied a large share of the market, but in recent years clear trends have emerged: infrastructure projects, blockchain services, DeFi, Web3 games and others. The general statistics on the investments of the largest and most influential cryptocurrency funds discussed above look like this:

• Infrastructure: 17
• Blockchain Service: 12
• Decentralized Finance (DeFi): 11
• Gaming: 9
• Artificial intelligence: 4
• Layer 1: 4
• Social: 4
• Stablecoin: 3
• Liquid Staking: 3
• Lending protocol: 3
• Layer 2: 3
• Decentralized physical infrastructure networks (DePIN): 1
• Decentralized Autonomous Organization (DAO): 1
• Healthcare: 1
• Wallet: 1