2021 is a pivotal year for the Web3 industry, which has grown from a nascent community to an emerging industry.
Over the past year, we have seen a massive influx of talent and capital into the Web3 ecosystem, resulting in a lot of innovation in the underlying infrastructure and consumer-facing DApps.
They are disrupting money, finance and even the internet itself.
Web3 refers broadly to the Internet owned by its builders, users and creators.
Destroy centralized institutions by leveraging tokens and decentralized technology. Cryptocurrencies, DeFi and NFTs, these are the first to find suitable market entry points and gain consumer acceptance.
However, the mass adoption of Web3 technology is just beginning. Less than 10% of the world’s population owns cryptocurrencies, and the users of Web3 applications, despite reaching tens of millions, are still dwarfed by the billions of users of Web2.
Internet user growth
Experience with the first two waves of internet and mobile technology shows that mass-market applications only begin to gain major traction once the technology reaches 1 billion users.
By comparison, Ethereum currently has only 180 million addresses, and at the current growth rate, it will take 5 years.
We are likely in the early stages of the greatest technological innovation since the advent of the internet, offering VCs one of the most asymmetrical upside opportunities in recent history.
In 2021, VCs are betting $30+ billion in crypto startups globally.
There are now over 65 crypto unicorns, over 40 of which were created in 2021, and nearly 50 crypto startups that have raised over $100 million in 2021.
Blockchain-related startups are raising an average of $20 million per day in 2021, with average seed funding rising to $3.3 million from $1.5 million in 2020.
Global Venture Capital Investments in Cryptocurrency and Blockchain Companies
a16z raised a $2.2 billion crypto fund in June and Paradigm raised a $2.5 billion crypto fund in October. In addition, large traditional funds like Tiger and Sequoia are also waiting to aggressively enter the market through late-stage equity.
Coinbase Venture is the investor with the most crypto unicorns in its portfolio, making over 100 investments in 2021.
As more institutional capital flows into the Web3 ecosystem, valuations are expected to be inflated and competition among VC funds will intensify.
Differentiation in different verticals as distribution becomes more competitive, such as stage (early vs. late), geography (West vs. East), value-add (token economics, governance, developer access, liquidity, etc. ) will be the crux of the fund.
Start a business
Nearly 50 crypto startups have raised more than $100 million in funding in 2021, historically dominated by exchanges, fintechs and institutional services platforms. This year is still the case with FTX, Celsius, Gemini and Fireblocks.
We’re also seeing an increased focus on consumer applications, as evidenced by the massive rounds raised by Sorare, Moonpay, Forte and Dapper Labs – each of them focused on getting the next billion users into the digital asset ecosystem.
Mainstream consumer-grade adoption of Web3 will be inevitable as decentralized technologies and applications mature, and things like Metaverse adoption.
The Web3 ecosystem is currently a melting pot of talent (developers and entrepreneurs) and capital (VCs and institutions), and when combined with new technology primitives (blockchain/Crypto), there is an explosion of innovation and value creation All the elements needed for growth.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/web3-startups-have-all-the-ingredients-for-an-explosion-of-innovation/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.