Around the Block sheds light on key trends in crypto. Written by Connor Dempsey, sourced from the work and insights from the entire team at Coinbase Ventures & Corp Dev
TLDR:
- Coinbase Ventures deal activity reflected the overall pace of the venture landscape, down 34% QoQ. Activity remained up 68% YoY, reflecting the steady growth of our venture practice over the past year
- Among the key trends observed, we believe that Web3 gaming will onboard the next massive wave of crypto users, with experienced founders from Web2 gaming continuing to pour into the space
- We’re excited about Web3 user applications working to upend the captive models of Web2 and give users control over their audiences and communities
- The Solana ecosystem continues to show impressive momentum and developer traction
- Massive UX improvements are coming to crypto that will obfuscate away complexity and deliver experiences on par with Web2
- The United States continues to be home to the bulk of companies in our portfolio, with Singapore, UK, Germany, and India all establishing impressive innovation hubs
- Where CeFi lenders faltered this year, DeFi lending platforms were resilient
- Current price action aside, we remain convinced that the opportunity within crypto and Web3 are far greater than most realize.
The first half of 2022 was turbulent for all markets. The Dow and S&P had their worst first halves since 1962 and 1970. The NASDAQ had its worst quarter since 2008. Bitcoin had its worst quarter since 2011, DeFi TVL ended down 70% from its high, and June NFT sales slumped to levels not seen in a year.
A core part of the crypto market chaos stemmed from the collapse of the $60B Terra ecosystem in May. This contributed to the implosion of a $10B crypto fund (Three Arrows Capital) that had leveraged exposure to Terra along with a few other trades that moved against them (GBTC, stETH). Next, it was revealed that Three Arrows Capital had borrowed heavily from some of the largest centralized lenders in crypto. Unable to recoup these loans, several of these lenders were forced into bankruptcy.
The macro market downturn seeped into the venture landscape as well.
Venture landscape
The broader venture market began to show signs of cooling in Q1, with total funding dropping for the first time since Q2 2019. That trend continued in Q2, with total venture funding dropping 23%, marking the largest dip in a decade. The quarter also saw later stage companies like Klarna raising down rounds; a further sign of the times.
Click Here to Read the Full Original Article at The Coinbase Blog – Medium…
