Funding Wrap: Y Combinator wants more stablecoin startups

Plus, crypto secured $1.9 billion in funding last quarter and Ripple acquires a custody provider


PH German Alvarez/Shutterstock modified by Blockworks


The startup incubator Y Combinator issued its latest “request for startups,” listing 20 ideas it would “like to see more people working on.”

Unsurprisingly, the list heavily featured AI, but it also had a crypto-related pitch — stablecoin finance. Stablecoins are tokens pegged to the prices of fiat currencies, usually the US dollar. Stablecoin issuers often accrue yield on the reserves backing the tokens — a practice that can be highly profitable.

Stablecoins can easily move across borders while avoiding fees and fraud, and their “utility is so straightforward it seems inevitable traditional finance will follow suit [behind startups already using stablecoins],” Y Combinator group partner Brad Flora wrote.

Read more: Tether made nearly $1B in monthly profit during Q4

Y Combinator is a San Francisco-based startup incubator that guides founders through the early stages of their project before making a seed investment in the company. The incubator is known for being among the first backers of some wildly successful startups — including OpenAI, Airbnb and Reddit.

It also counts some crypto heavyweights as alumni, including Coinbase, OpenSea, and Protocol Labs; the company behind Filecoin and IPFS. 

In his blurb on stablecoins, Flora said “it seems clear that stablecoins will be a big part of the future of money.” Flora likened the future adoption of stablecoins to once-illegal music file sharing becoming big business vis a vis Spotify and Apple.

Read more: PayPal Ventures uses its stablecoin for investment in crypto transfer platform Mesh

Some crypto users on social media were slightly surprised but heartened by Y Combinator’s stablecoin embrace. 

“Respect to @ycombinator for coming around to it. Stablecoins are one of the few trillion dollar industries,” Sam Kazemian, founder of the decentralized stablecoin Frax, wrote on X. 

Crypto firms secured $1.9 billion in funding last quarter: PitchBook

Venture capital activity, typically a lagging indicator of crypto market performance, has been turning around. A report on Q4 fundraising from data platform PitchBook found crypto closed 326 deals last quarter totalling some $1.9 billion, a 2.5% increase from Q3. 

Venture activity towards the end of 2023 was buoyed by a series of nine figure rounds, including Wormhole’s $225 million raise at a $2.5 billion post-money valuation

Read more: Lava Network heats up the node landscape with market forces

PitchBook’s data shows there was $9.3 billion in crypto venture funding last year overall, down from $24.8 billion and $29.2 billion in 2021 and 2022. 70 VCs exited their investments last year, taking $1 billion with them, according to the report.

Other notable fundraises

  • New crypto venture firm RW3 Ventures announced a $60 million fund.
  • MetaStreet raised $25 million to build liquid credit tokens, an on-chain debt capital tool for NFTs. 
  • Former FTX US exec Brett Harrison raised $12 million for his institution-focused new venture, Architect.
  • Armistic Capital purchased shares totaling $6 million in value in Bitcoin mining firm Greenidge. 
  • Modular blockchain network LAVA announced a $15 million seed round led by Jump Capital, Hashkey Capital and Tribe Capital.
  • Ripple acquired the custody provider Standard Custody & Trust.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.


Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

recent research

Research Report Templates (1).png


Solana Mobile is a highly ambitious foray into the mobile consumer hardware market, seeking to open up a crypto-native distribution channel for mobile-first applications. The market for Solana Mobile devices has demonstrated a phenomenon whereby external market actors (e.g. Solana-native projects) continuously underwrite subsidies to Mobile consumers. The value of these subsidies, coming in the form of airdrops, trial programs, and exclusive NFT mints, have consistently covered the cost of the phone and generated positive returns for consumers. Given this trend in subsidies, the unit economics in the market for Mobile devices, and the initial growth rate and trajectory of sales, it should be expected that Solana mobile can clear 1M to 10M units over the coming years. As more devices circulate amongst users, Solana Mobile presents a promising venue for the emergence of killer-applications uniquely enabled by this mobile-first, crypto-native distribution channel.


Plus, a look into Lighting Labs’ newest feature


Crypto’s Wild West era is over — it’s time to embrace regulation to secure the future of digital assets


Plus, Solana has now surpassed Ethereum in trailing 30-day decentralized exchange volume


Polymarket betters say Kamala Harris has better odds than Biden of winning against Trump


Bitcoin’s down Tuesday, while ETH-correlated assets like ENS and ARB see growth