Lattice Fund’s 2022 report is out, and it's painting a colorful picture of the shifting tides in the crypto investment world. The big takeaway? Investors are playing it cool and putting their chips on more stable bets like Infrastructure and Centralized Finance (CeFi).
After diving into over 1,200 crypto pre-seed and seed rounds from last year, Lattice Fund noticed a clear trend. Investors are now leaning heavily towards the tried-and-true sectors of Infrastructure and CeFi. This comes after a wild ride of exploring the new and flashy sectors back in 2021.
The report reveals that this pivot wasn't just a minor adjustment. We're talking about nearly $2 billion pouring into Infrastructure and a cool $450 million into CeFi. That's a whopping 3x and 2x increase from the previous year! Clearly, investors are feeling pretty confident with 80% of CeFi projects and 78% of Infrastructure projects successfully launching on mainnet. Compare that to the less stellar performance of Consumer Web3 and DeFi, and you see where the smart money is headed.
As the hype around NFTs and the metaverse started losing steam, infrastructure projects—those behind-the-scenes heroes supporting other crypto companies—kept their steady pace. Take Eigenlayer, for example. They raised a seed round in January 2022 and nailed their AVS go-to-market strategy, catching the eye of middleware projects along the way.
All in all, investors splashed a cool $5 billion across nearly 1,200 startups in 2022, marking a 2.5x increase from the year before. Ethereum continued to be the big kahuna of the layer-one ecosystems, pulling in $1.4 billion in investments and leaving competitors like Solana, which raised around $350 million, in the dust.
While Ethereum and Solana managed to keep the investment party going, other ecosystems hit some bumps. Polkadot saw a 40% drop in fundraising, and NEAR couldn't get any teams to raise additional capital. Binance’s ecosystem took a hit too, with a third of its teams shutting down. Solana's failure rate doubled to 26% from the previous year.
Despite the rocky terrain, Bitcoin projects stood tall with a 100% survival rate after two years, showing off their resilience in a shaky market.
Attracting users in a bear market turned into a Herculean task as retail interest waned. Sectors that were the talk of the town in 2022—like NFTs, the metaverse, and gaming—are now struggling to keep users engaged compared to two years ago.
The report also throws a little shade, suggesting that today’s buzzworthy sectors might not always align with long-term investor interest. Case in point: Despite 75 teams raising nearly $280 million for the metaverse, no project has hit that sweet spot of product-market fit, and over 21% of teams have thrown in the towel.
Meanwhile, new kids on the block like DePIN and AI, barely a blip on the radar in 2022, are now the hot topics everyone’s buzzing about.
So, there you have it! The crypto investment landscape is shifting, and the smart money is moving towards stability. Stay tuned as we continue to ride these crypto waves!
