Global blockchain industry development monthly report: May funding amount hit a new high, reaching $3.925 billion

The global blockchain investment and financing market remained hot in May 2021. A total of 161 financing events took place in a single month, with a record high financing amount of US$3.925 billion in a single month.


The global blockchain investment and financing market remained hot in May 2021. A total of 161 funding events took place in a single month, with a record high funding amount of $3.925 billion in a single month. The digital currency-related track has always remained hot and the market attention continues to climb, while the physical application scene track has recently underperformed.

From the domestic market: on the policy side, the Financial Commission of the State Council cracked down on bitcoin mining and trading practices in May 2021, and Hong Kong imposed a fine of 5 million yuan and imprisonment for seven years for conducting regulated virtual asset activities without a license, strengthening the regulation of blockchain-related financial activities; on the industry side, digital RMB access to Alipay, digital RMB pilot steadily progressed, and Dalian City built a digital RMB application demonstration village.

From the international situation, cryptocurrency regulation is gradually improved and policies are further liberalized. The U.S. State of Nebraska passed a financial innovation bill to allow the establishment of state-level crypto banks; the U.S. Internal Revenue Service (IRS) announced its plan to seize citizens’ crypto assets to pay off tax debts, and South Korea will impose a 20% tax on cryptocurrency mining. On the other hand, DBS Bank and others jointly launched Climate Impact X, a blockchain carbon-neutral trading marketplace, and CRC, a crypto rating council consisting of Coinbase and others, released a new framework for evaluating the attributes of cryptocurrency securities.

In the crypto community, Ether scaling solution continued to be upgraded; Polkadot v0.9.0 was released by Polka.

In terms of capital market performance, most of the top-ranked cryptocurrencies in terms of market capitalization have maintained their upward trend so far this year, despite the significant shrinkage of most cryptocurrencies’ market capitalization in May. Driven by the public chain ecology of major exchanges, the platform coins of major cryptocurrency exchanges, including BNB, have risen by a staggering rate, with BNB having risen by more than 969.22% year-to-date.

Global Blockchain Investment and Financing Overview
According to 01 Blockchain’s incomplete statistics, 161 financing events occurred in the global blockchain-related industry in May 2021, of which 119 revealed specific financing amounts, with total financing amounting to $3.925 billion (based on the real-time exchange rate on June 7). Specifically.

1、The average financing amount of a single project in May was as high as $32.9873 million, a record high financing amount
From the global blockchain-related financing situation in the past six months, there were 161 financing events in May 2021, down slightly from the previous month; from the total amount of financing in a single month, the amount of financing in May 2021 rose 20.37% year-on-year. the amount of financing in May hit a record high since September 2020

Based on the publicly funded projects, the average funding amount of individual projects by month was reported at $32,987,300 per project in May 2021. With the exception of January when it spiked to $44,255,300 per start, the overall trend has been a steady upward trend since September 2020 to date.

2、Strategic investment is about 62%, and the proportion of seed/angel round is up from last month
Observed from the aspect of financing rounds, strategic investment was the main form of financing in the blockchain field in May, with 62 cases occurring in May, accounting for about 62%; the proportion of seed/angel rounds increased slightly, accounting for about 33%.

3、Million-dollar-level financing performed outstandingly, with 76 cases
Although the average financing amount of a single project in May was as high as $32,987,300, among the projects with disclosed financing amount, those with financing amount below $10 million occupied the majority, with a proportion of about 71%; 26 and 8 financing events occurred at the level of $10 million and hundreds of millions of dollars respectively.

4, the United States accounted for about 30% of the number of financing
In terms of regional distribution, the U.S. took the lead with 32 financing events in May, accounting for about 34% of the total. The number of financing in the United States remained the same as last month.

The U.K. ranked second with 10 cases in a single month, up from 5 cases in the previous month. China had 8 financings in May, almost half the number from the previous month.

In addition to the U.S., U.K. and China, Singapore and Canada saw 7 and 5 cases respectively, while the blockchain industry in other countries saw less than 5 funding cases in May.

  1. Cryptocurrency track is hot, and application-based projects are performing well
    Referring to the blockchain industry classification standards of the Tongzhi Tong Research Institute, the Information Center of the Ministry of Industry and Information Technology of China and other institutions, combined with 01 Blockchain’s own experience, we divide the blockchain industry into three categories: blockchain underlying layer and infrastructure (underlying layer), expansive technologies and solutions (expansive layer/data layer) and industry applications (application layer), which are subdivided into more than 10 secondary categories such as blockchain underlying protocol, blockchain hardware and services, expansive technologies, digital currency-related, financial application-related, entity application-related and industry supporting services, etc. The major categories are further subdivided into more than 100 tertiary categories.

From the primary categories, industrial application projects and blockchain underlying and infrastructure projects performed well in May.

From the secondary category, the digital asset-related track in the application category remained hot, with 84 projects receiving capital investment; followed by solution providers/platforms and on-chain applications, which also became the track favored by capital in May, with 36 and 21 projects receiving financing respectively. In addition, 8 projects were financed in physical application scenarios and 8 projects were financed in financial application scenarios.

From the three-level segmentation scenarios, cryptocurrency, DeFi and payment-related items were quite hot in the financing market in May, with 46, 45 and 43 related projects receiving capital investment respectively; meanwhile, NFT and other tracks also achieved remarkable performance in May.

Cryptocurrency Public Opinion and Market Performance in May
Public Opinion Fever
According to the data shown by GoogleTrends and Baidu Index, Bitcoin has remained the focus of public attention since the beginning of 2021, both domestically and globally, and Ether has been hotter than others. It is worth noting that both bitcoin and ethereum experienced a wave of heat in the first half of May. This may be somewhat related to the tightening of Chinese cryptocurrency regulatory policies in the first half of May, which caused bitcoin and ethereum prices to plummet.

Market Performance
Year-to-date in 2021, the overall performance of the A-share market has been positive, with yields around 3%, including -0.01% for the SZSE, while the rest have been positive. In terms of global capital markets, the overall performance has been steady to positive so far this year, with most of the major global stock indices achieving positive returns, including US crude oil which has gained 51.91% year-to-date, and the Austrian ATX which has also gained 26.20%.

In addition, the overall market for cryptocurrencies has continued to be hot so far this year, with most of the top-ranked coins in terms of market capitalization seeing significant gains and their overall strong performance still far outperforming the mainstream capital markets. The worst-performing BTC among the top 15 market capitalization has also made a 24.10% gain so far this year, higher than most mainstream assets; while the best-performing BNB has gained as much as 969.22% year-to-date; XRP’s gain is also very high, about 306.11%; in addition, DOT, ETH, LINK, EOS and CRO have all gained more than 100%.

Global News Overview
Domestic Industry Policy
[State Council Financial Committee: Crackdown on Bitcoin Mining and Trading]

On May 21, the Financial Stability Development Committee of the State Council (hereinafter referred to as the Financial Committee) held its fifty-first meeting to study and deploy the next phase of key work in the financial sector. The meeting called for resolute prevention and control of financial risks. Adhere to the bottom-line thinking, strengthen the financial risk all-round scanning and early warning, promote the reform of small and medium-sized financial institutions to transform the risk, focus on reducing credit risk, strengthen the supervision of financial activities of platform enterprises, crack down on bitcoin mining and trading practices, and resolutely prevent the transmission of individual risks to the social sector.

[HKSAR Government: Conducting regulated virtual asset activities without a license is punishable by a fine of $5 million and imprisonment for seven years]

On May 21, the HKSAR Government said that the public consultation on legislative proposals to amend the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) (AMLO) has been completed and the Government published a paper outlining the views collected during the consultation period and the relevant responses, as well as a summary of the next steps to be taken. It is proposed that reference be made to similar enabling provisions in the SFO to give the SFC the power to intervene to restrict or prohibit the operation of licensed virtual asset service providers and their associated entities where necessary. Conducting regulated virtual asset activities without a license is punishable by a fine of $5 million and imprisonment for seven years; and, in the case of a continuing offence, a further fine of $100,000 for each day during which the offence continues.

[NDRC and other four departments: layout of national hub nodes of national arithmetic network]

On May 26, the National Development and Reform Commission, the Central Network Information Office, the Ministry of Industry and Information Technology, and the National Energy Administration jointly issued the “National Integrated Big Data Center Collaborative Innovation System Arithmetic Hub Implementation Plan” (hereinafter referred to as the “Plan”), clearly proposing the layout of the national hub nodes of the national arithmetic network, and launching the implementation of the “East Digital West Arithmetic” project The Plan clearly proposes to lay out the national hub nodes of the national computing network, start the implementation of the “East Digital West Computing” project, and build the national computing network system. The Plan lays out the construction of national hub nodes of national computing network (hereinafter referred to as “national hub nodes”) in Beijing, Tianjin and Hebei, Yangtze River Delta, Guangdong, Hong Kong and Macao Bay Area, Chengdu and Chongqing, as well as Guizhou, Inner Mongolia, Gansu and Ningxia, focusing on promoting integrated planning in terms of data center layout, network, electricity, energy consumption, computing power and data, etc. The National Hub Node is the backbone connection point of China’s arithmetic network. Through the national hub node, the layout of data center construction is planned in an integrated manner, and large-scale data centers are guided to gather moderately and form data center clusters. Between the clusters and the clusters, a high-speed data center direct connection network will be established to implement the “East Data and West Computing” project to support large-scale computing power scheduling and build a new computing power network pattern oriented to data flow.

Yunnan Province will subsidize up to 10 million yuan for a single blockchain project

On May 29, the official website of Yunnan Provincial Development and Reform Commission released the “Rules for the Implementation of Measures to Support the Development of Blockchain Industry in Yunnan Province (for Trial Implementation)”, in which the province will strongly support the development of new blockchain infrastructure, select three blockchain platforms with active applications and outstanding drive each year, and give a one-time post-facto subsidy to the project construction body according to 30% of the project R&D, purchase or rental equipment and testing and certification costs, with the maximum subsidy for a single project not exceeding 10 million yuan.

Domestic Industry News
Dalian City to build a digital RMB application demonstration village

On May 6, with the support of Dalian Central Branch of the People’s Bank of China, Dalian Branch of Post and Reserve Bank is making efforts to build a digital RMB pilot demonstration village. The demonstration village will have a wide coverage of the “three rural” service scenarios such as farmers’ markets, stores, farms, fruit and vegetable sales, pharmacies, snack stores, agricultural machinery stations, auto parts stores, etc. The demonstration village will have a wide coverage of digital RMB collection and payment functions. At present, Dalian Branch of Post and Reserve Bank has set up 224 scenarios and completed 1,558 transactions in rural areas.

Digital RMB is connected to Online Merchant Bank, and three Ali merchants are added to the sub-wallet

On May 7, the Digital RMB App was updated again, and “Net Merchant Bank”, which had previously been grayed out among the wallet operators, was now “lit”. “The sub-wallet merchants have also been updated, with all three Ali-system merchants, including Hungry Mamma, Boxma Fresh, and Tmall Supermarket, joining the support.

The first international standard for blockchain privacy protection was successfully established by Antchain and ICT Academy

On May 12, the standard “TEE-based Blockchain Privacy Calculation” jointly initiated by Antchain and China Academy of Information and Communication Technology was successfully established as the world’s first international standard for general data privacy protection on blockchain, marking the high recognition of Chinese technology companies’ privacy protection technology in the blockchain field by the international community. It includes more than 190 countries and 900 companies and academic institutions, and is also an authoritative international standardization organization on a global scale.

The SEC decided to file a case against blockchain leading stock E-See for investigation]

After the release of the news that the annual report for 2020 and the quarterly report for 2021 were “difficult to produce”, the former blockchain leader Ease2P2P (600093.SH) announced after the market hours on May 14 that it had received the Notice of Investigation from the China Securities Regulatory Commission. Because the company is suspected of information disclosure violations, according to the relevant provisions of the Securities Law of the People’s Republic of China, it was decided to file a case against the company for investigation.

[A number of mining pool-related companies divested their domestic related businesses in a hurry]

Power supply to mining farms is suspended in Xinjiang and some areas of Sichuan, and several mining pool-related companies divest their domestic-related businesses in a hurry. On Friday, the State Council’s Financial Committee proposed “cracking down on bitcoin mining and trading practices” in a meeting. As a result of this incident, a large number of domestic miners are now ‘going abroad’ to find suitable sites to build new mining sites, mainly in the United States, Kazakhstan, Russia, Canada and other places, which has led to local sites have become in short supply. In addition, there are also a number of miners who are selling off their bitcoin mining machines domestically.

International Regulatory Trends
[South Korea to Impose 20% Tax on Cryptocurrency Mining]

South Korean officials from the Ministry of Strategy and Finance will impose a 20% tax on cryptocurrency miners who earn more than $2,220 per year. The miners should be responsible for paying the tax and the corresponding amount should be deducted from their income. However, the regulator clarified that cryptocurrency miners are able to deduct electricity costs from the total taxable income declared, as these are “necessary expenses.” In addition, the country’s digital asset miners should submit a tax return in May each year detailing the value of the profitability of the virtual currency mined in the previous fiscal year. It is reported that the new tax ruling may take effect from January next year.

[IRS Announces Plan to Seize Citizens’ Crypto Assets to Pay Off Tax Debts

The Internal Revenue Service (IRS) recently announced that it will seize citizens’ cryptocurrency assets to pay off overdue taxes. The announcement comes on the heels of a series of initiatives by the IRS aimed at limiting citizens’ tax avoidance through trading cryptocurrencies. It is known that the IRS had previously disclosed in its 2014 guidelines related to treating cryptocurrency assets as property and not as currency. As a result, Robert Wearing, deputy chief counsel of the IRS, said that the property (cryptocurrency) could be seized like any other property.

[U.S. Treasury Requires Crypto Transfers Up to $10,000 to be Reported to IRS

The U.S. Treasury Department announced that it is requiring crypto digital currency transactions over $10,000 to be reported to the Internal Revenue Service (IRS). In a tax enforcement recommendation report, the Treasury Department said that companies that accept crypto assets as a method of payment as cash transfers should also report to the IRS if the fair market value of the transfer transaction crypto assets exceeds $10,000.

[Nebraska Passes Financial Innovation Bill to Allow for State Crypto Banks]

A bill to allow the establishment of state-level crypto banks in Nebraska has been signed into law, known as LB649 or the Nebraska Financial Innovation Act, which was introduced in January by state Senator Mike Flood of the new district. The bill was drafted by a Japanese crypto company called Telcoin, which has promised to relocate to Nebraska if the bill becomes law. Wyoming passed similar legislation last year, paving the way for Kraken to become the first official state crypto bank in the United States.

[Australian Taxation Office to Require Crypto Taxpayers to File Tax Returns

The Australian Taxation Office (ATO) has notified about 100,000 taxpayers who hold cryptocurrencies that the ATO will be reviewing their previously filed returns and ensuring that they are filed correctly. The tax authority will also require approximately 300,000 people to submit their 2021 tax returns.

International Industry News
[CRC, a crypto rating committee comprised of Coinbase and others, releases new framework for evaluating the attributes of cryptocurrency securities]

The Cryptocurrency Rating Council (CRC) has released a new evaluation methodology for security-based virtual currencies, which includes an evaluation of how the virtual currency is issued (public/private offering/mining/airdrop), the rights of the virtual currency (whether it has the right to profit distribution/governance, etc.), and whether it has a reasonable expectation of profitability. The final score is used to determine whether the virtual currency is a security-based token. Members of the Cryptocurrency Rating Committee CRC include Coinbase, Anchorage, Kraken and Circle.

DBS Bank and others jointly launched the blockchain carbon neutral trading marketplace Climate Impact X]

DBS Bank, Singapore Exchange, Standard Chartered Bank and Temasek will jointly develop Climate Impact X, a carbon trading marketplace that will allow companies to access high-quality carbon credits to address difficult emissions reductions. Climate Impact X will use satellite monitoring, machine learning and blockchain technology to improve the transparency, integrity and quality of carbon credits.

[Sony Corporation Files Patent to Allow Users to Bet on Gaming Matches Using Bitcoin]

On May 16, Sony has filed a patent for an e-sports betting platform that allows users to bet on the outcome of e-sports matches, with bets that can be monetary, such as fiat currency or bitcoin, or non-monetary, such as game assets, digital rights and virtual currencies.

[Convenience store giant Sheetz to start accepting dogcoin, bitcoin, ethereum and other payment methods]

US convenience store giant Sheetz has announced its acceptance of digital currencies after partnering with crypto payment startup Flexa. It will support bitcoin, dogcoin, ethereum, litecoin and other cryptocurrencies in select café stores this summer. By the end of the year, it will also be possible to pay for gas at Sheetz locations using cryptocurrencies. Note: Sheetz was founded in 1952 and currently has 634 stores with $6.2 billion in annual revenue.

[BurgerSwap Updates Lightning Loan Details, 4,400 WBNB, 1.4 Million USDT and Other Tokens Stolen]

BurgerSwap, the first automated market maker on the BSC chain, updated the details of the lightning loan. On May 28th around 03:00, BurgerSwap BSC chain suffered a lightning loan attack and $7.2 million was stolen through 14 transactions. The attackers created fake coins (non-standard BEP-20 tokens) and created BURGER transaction pairs. By adjusting the routing, the attacker creates the BURGER to fake coin to WBNB route through the BURGER/fake coin transaction pair, the attacker re-enters BurgerSwap through the fake coin and manipulates the amount of reserve0 and reserve1 in the transaction pair contract, causing the price to change. Then re-enters the transaction again and trades back to WBNB to obtain the additional amount of WBNB entered. The attackers stole a total of 4,400 WBNB ($1.6 million), 22,000 BUSD ($22,000), 2.5 ETH ($6,800), 1.4 million USDT ($1.4 million), 432,000 BURGER ($3.2 million), 142,000 xBURGER ($1 million), and 95,000 ROCKS.

Latest crypto projects/technology news
[Polka released Polkadot v0.9.0].

On May 6, Polka Code released a new version of Polkadot v0.9.0. This version contains client changes that enable the parallel chain to function correctly. This means that the parallel chain functionality will be officially deployed to the Kusama chain when all nodes are successfully upgraded to this version. It also integrates Beefy and MMR (Merkle Mountain Range) in preparation for the Poca-Ethernet bridge, as well as the Poca-Kusama bridge that Gavin mentioned earlier (which, once connected, allows 1% of the DOT to be transferred to the Kusama network) and other cross-chain bridges.

[Uniswap V3 main network is up and running].

Uniswap v3 has been deployed to the Ethernet mainnet. According to the official article, Uniswap v3 is the most powerful version of the protocol to date, with centralized liquidity providing unprecedented capital efficiency for liquidity providers, better execution for traders, and a core infrastructure for decentralized finance.

[Ether 2.0 Successfully Completes PoS Merge in Developer Test Network]

Ether 2.0 clients Teku, Lighthouse, Nimbus and Prysm, and Ether 1.0 clients Geth, Besu and Nethermind have successfully completed a PoS merge in the developer test network (devnet). The test was conducted for one day under the name Steklo. Ether 2.0 developer Diederik Loerakker said that the test network is in a rather unstable state right now and serves more as a tool for developers to debug their clients. We will be running more user-centric test nets in the coming weeks.

[Ether Foundation: Berlin Hard Fork Addresses Longstanding Threats to Ether]

The Ether Foundation said that the updates in the Berlin hard fork, such as fixing the gas fee and adding transaction types, will address a long-standing threat of vulnerabilities in Ether. This vulnerability, triggered by random trie lookups, can be exploited by malicious transactions to cause blocking of block times at the minute level, and was revealed by Ether security researchers Hubert Ritzdorf and Matthias Egli back on October 4, 2019, when they submitted the Ether vulnerability bounty program.

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