Crypto Funding: DeFi replaces CeFi as VC Favorite

DeFi attracted 41x more capital in 2022 than it did in 2020… and the trend continues

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It’s been a quiet week in crypto funding.

A little under $91 million was handed to cryptocurrency startups — down significantly from the $254 million the week prior. 

The majority of this week’s cash haul went to decentralized finance (DeFi), blockchain infrastructure and NFT companies, a trend that has been consistent over the past year, according to a recent CoinGecko report.

The report highlights that in 2022, DeFi companies received more than three times the amount of money raised in 2021 — and 41 times more than the amount the sector secured in 2020. 

Centralized finance (CeFi) funding, on the contrary, had dipped to less than one-third of the capital it locked down in 2021. 

Bear market conditions had not stopped DeFi funding into DeFi. The opposite was actually true. 

“This potentially points to DeFi as the new high growth area for the crypto industry in the next few years, with the industry maturing and an increasing number of on-chain participants,” Lim Yu Qian, a growth associate at CoinGecko, wrote. “In comparison, the decrease in CeFi funding likely reflects the sector reaching a degree of saturation.”

So, who were some of the companies that landed fresh funding this week?

Few and Far

Few and Far — a digital collectibles platform based in the British Virgin Islands — secured $10.5 million from Pantera Capital, the established crypto investment manager that led the round. 

Other investors include Cypher Capital, Huobi Ventures, Hypersphere, Metaweb, Mantis Partners and K5 Global.

Pantera General Partner Paul Veradittakit said in a blog post that he and his firm are “proud investors in Few and Far and support their mission to bring NFTs to the mainstream.”

“The market has recently seen a systemic shift in royalties. Few and Far’s technologies solve this and protect IP holders’ revenue models,” Veradittakit said. “This is gaining interest from the world’s leading brands that can no longer work with the likes of OpenSea.”

The startup’s latest funding has been designated for additional hires, as well as product improvements and related initiatives.  

Conflux 

Layer-1 blockchain development company Conflux, which is based in China, has closed a token round of $10 million from DWF Labs. 

Conflux recently partnered with China Telecom — one of the country’s largest telecommunications companies —  to develop blockchain-enabled SIM cards. It has also integrated with XiaoHongShu, an interactive Chinese social network, allowing users to showcase their NFTs and digital collectibles. 

The company claims it is one of the only regulatory-compliant blockchains in China and has previously received funding from ​​Sequoia China and Baidu Ventures.

Avalon Corp

Gaming startup Avalon Corp has come out of stealth mode swinging.

The company landed $13 million in a round led by BITKRAFT Ventures, HASHED, Delphi Digital. Coinbase Ventures, Yield Guild Games and others also chipped in. 

The Florida-based company says it’ll use the newly secured funds to expand operations — and propel Avalon’s progress toward its vision of an interoperable metaverse, where users will be able to build their imagination into existence. 

Other notable raises this week:

  • Term Finance secured $2.5 million in a seed round led by Electric Capital with participation from Coinbase Ventures, Circle Ventures, Robot Ventures and MEXC Ventures. The funding is designed to make crypto lending more safe. 
  • NFT finance protocol Insrt Finance landed $2.2 million via a simple agreement for future tokens round co-led by Hashkey Capital and Infinite Capital.
  • Decentralized storage company Impossible Cloud received $7 million in a seed round led by HV Capital and 1kx.

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