Review Q2 financing: After the first wave of the bull market, the AI and DEP projects will usher in a period of rapid development

Original | Odaily Planet Daily

Author | How is the husband

The first peak of the bull market has passed in the second quarter of 2024.

At the macro level, the Fed still has not released a clear signal for interest rate cuts, and the future direction of the encryption market is influenced by the US election moment; the US SEC approved the 19 b-4 document at the end of May, but the S-1 document has not been approved, and the market’s enthusiasm for the ETH Spot ETF is slowly declining.

From the perspective of the encryption market, there is still no internal drive to further drive the industry’s development. However, the era of ‘撸毛’ may come to an end with the Layerzero Airdrop, and it is worth looking forward to what new customer acquisition methods will emerge after the wealth effect of ‘撸毛’ diminishes.

Under the influence of various factors, the Primary Market has not changed much compared to the previous quarter. The investment and financing in Q2 has slightly decreased in terms of quantity, but in terms of the investment total value, it is slightly higher than the previous quarter.

Looking back at Q2 Primary Market financing activities, Odaily Star Daily found:

● The financing situation in the encryption market remains stable. Compared to the previous cycle, the first small peak of the Bull Market has passed;

● In Q2, there were 370 financing deals disclosed with a total financing amount of USD 2.416 billion.

● DePIN and GameFi became hot financing zones this quarter;

● The largest single investment amount is 225 million US dollars for Monad.

*Note: Odaily Planet Daily categorizes all projects that disclosed financing in Q1 (actual close time is often earlier than the news release) into 5 major tracks based on the business type, target audience, business model, etc.: infrastructure, applications, technology service providers, financial service providers, and other service providers. Under each track, there are different sub-categories including GameFi, Decentralized Finance, Non-fungible Token, payment, Wallet, DAO, Layer 1, Cross-Chain Interaction, and others.

The encryption market financing situation remains stable, compared to the previous cycle, the first small peak of the Bull Market has passed

In the last quarter report, the view is that the last quarter marked the early stage of the Bull Market. Combined with the encryption market trend analysis, we believe that the first small peak of the Bull Market has passed.

Although the Primary Market’s financing amount and volume didn’t differ much from last quarter, the Primary Market has a certain lag. Besides being able to judge the start of the Primary Market’s investment and financing in the previous Bull Market phase, it is difficult for Primary Market investment and financing to accurately reflect subsequent developments.

Q2 financing amount is 370, with a total disclosed financing amount of 24.16 billion US dollars

According to the incomplete statistics of Odaily Planet Daily, from April to June 2024, a total of 370 encryption market investment and financing events occurred globally (excluding fundraising and mergers and acquisitions), with a disclosed total amount of 24.16 billion US dollars, distributed in the infrastructure, technology service providers, financial service providers, application, and other service provider tracks. Among them, the application track received the most financing amount and quantity, approximately 9.8 billion US dollars and 204 deals; followed closely by the infrastructure track, with a financing amount of 8.55 billion US dollars and 120 deals.

From the above chart, the financing amounts and financing volumes of each track are basically the same as last quarter. Due to the single investment of some star projects, there has been a slight rise in the amount. However, compared with the previous Bull Market, the quantity has dropped relative to the long position. The reason is that there are no emerging zones or asset issuance methods in the current encryption market that have transformative properties. So far, the inscription runes have not passed the market test.

DEP and GameFi were popular financing zones last quarter

According to Odaily Planet Daily’s incomplete statistics, in Q4, financing events in the sub-sectors were concentrated in Decentralized Finance, underlying infrastructure, and GameFi, accounting for almost half of the total financing events. Among them, there were 88 financing events in the Decentralized Finance sector, 61 in the underlying infrastructure sector, and 52 in the GameFi sector.

From the perspective of the distribution of financing amounts in the sub-track:

DePIN and AI are separately calculated due to their high popularity, and almost all institutions have invested in related projects. This phenomenon has persisted since last year. For the encryption market, the investment and financing focus of the Primary Market will lag behind for a period of time based on the difficulty of project development. It can be inferred that in the second half of this year or next year, projects related to AI and DePIN will experience a surge in the Secondary Market, and everyone can make early layouts to understand the high-quality projects in the two zones.

In addition, according to the above figure, it can be found that some zones have an imbalance between the amount and quantity. This is because the investment and financing amount of well-known projects in a single zone is too high, and such projects will be listed separately in subsequent projects.

Finally, the financing news of the GameFi track has been among the top three for several quarters, but there are no high-quality projects in the GameFi zone in the Secondary Market. Instead, Telegram mini-games are quite popular, such as Hamster Smash, etc., tap to earn projects. However, from the investment and financing projects of this quarter, Telegram-related projects did not receive the favor of most capital. Specific follow-ups on the development of GameFi can be found in the weekly blockchain gaming report released by Odaily Planet News.

The maximum amount of single investment received is $225 million for Monad

Among the top 10 projects, it is worth noting that three projects with over 100 million in financing are led by Paradigm. Combining with the author’s “Review and Philosophy Sharing of 20 Active Investment Institutions in the First Half of 2024”, Paradigm only made 7 moves in the first half of 2014. In addition to Paradigm’s position in the encryption industry VC capital, these three projects can be followed closely, namely Monad, Farcaster, and Babylon.

Securitize, led by BlackRock, can be regarded as one of the representatives in the encryption industry, especially the Build Fund, which cooperates with each other to provide a new underlying asset method for on-chain RWA projects.