Autor Cointelegraph By Cointelegraph Research

2021 was an interesting year in the crypto world. Bitcoin (BTC) hit all-time highs in several different metrics including adoption, media coverage and price action. It has been exciting to see all of the coverage and attention being paid to everything crypto including interest in nonfungible tokens (NFTs), decentralized finance (DeFi) and even large publicly traded companies like MicroStrategy holding serious amounts of BTC on its balance sheet. All of this is the public face of the crypto industry. However, this does not happen on its own. There are teams of people and projects working every day to improve existing applications for crypto and trying to be the next DeFi phenomenon, NFT craze or solution to a legacy problem that only blockchain can efficiently solve.Pulling from the Cointelegraph Research Terminal’s database of venture capitalist deals, mergers and acquisitions (M&A) activity, investors and crypto companies, this 12-page report shows insights from investment activities in 2021. The report brings meaningful insights into the trends over the past few years and what VCs concentrated on in 2021. The next blockThe next stages of the blockchain revolution are building behind the scenes, but this takes time, and an important aspect that can be overlooked is capital investment. Venture Capital (VC) can come from many different sources such as high-net-worth individuals (HNWI), family offices, institutions, funds and even decentralized autonomous organizations (DAOs). Knowing what is being built, who is behind it and the network helping to build a project can help interested parties get a leg up on the future of the blockchain industry, as opposed to reading online news articles about the results after the fact.Download the full report here, complete with charts and infographics.The Cointelegraph Research Terminal, in conjunction with Keychain Ventures, will publish quarterly reports on the events behind the scenes on the inflows of capital from VC into the blockchain industry. Before publishing the 2022 Q1 VC report, Cointelegraph Research will release a 12-page report that highlights VC activity in 2021.Venture capital interest in crypto and blockchain is on the rise2021 saw an unprecedented rise in active deals and total capital inflows. In 2020, there were 838 deals with an aggregate capital total of $4.9 billion. The number of deals jumped in 2021 to 1349 deals and just under $30.5 billion in capital investments. The worldwide impact of COVID-19 accelerated interest in digital assets, and mainstream firms such as Visa, Mastercard, PayPal and Nike all invested heavily into different sectors of the blockchain space including DeFi, infrastructure and NFTs. The top ten most active VC funds comprised around 65% of all individual deal activity in 2021. Nine of the ten favored DeFi for investment in 2021, except for Animoca Brands, which went against the norm and heavily invested in NFTs. The second most invested sector was NFTs, and third place was shared between Web3 and Infrastructure. CeFi, interestingly enough, was the least invested sector. Only Alameda Research and Coinbase Ventures invested in the double-digit percentages of their overall activity. Considering all individual investments in 2021, the majority of VC investment rounds were in Pre-Seed & Seed Rounds. However, these rounds did not gain the greatest capital funding compared to others. Series B, for example, had only 61 rounds yet garnered $6.8 billion. Post-Series B’s Expansion rounds, which include debt financing, strategic partnerships, and treasury diversification, had over 200 rounds and almost $10.27 billion in investments.Mostly acquisitions in the world of crypto 2021 M&AThere were significant deals in the Mergers & Acquisitions department in 2021. The major concentration on acquisitions over mergers in the business cycle stage of the blockchain industry does make sense, as it has not reached any real maturity level yet. While almost every deal on this list was of high importance, several stand out for their greater import to the blockchain industry and the direction of markets in general. These include Mastercard acquiring CipherTrace, PayPal’s procurement of Curv, Visa obtaining Tink, and Nike buying RTFKT Studios. These strategic purchases have significant meanings for Mastercard, PayPal, and Visa’s actions will expand each corporation’s involvement in DeFi and Infrastructure such as fiat on and off-ramps, payment gateways, and systems that leverage blockchain’s unique technological advantages like triple-ledger accounting. Nike’s acquisition of RTFKT Studios shows a willingness to embrace the expanding marketplace interest in NFTs, which can have a large impact on the sports world.Quarterly VC reports from Cointelegraph Research Terminal and Keychain Ventures The report pulls from Cointelegraph Research Terminals’ expansive database along with analysis from Michael Tabone, an Economist from Cointelegraph Research. Michael has an extensive background in economics, business, finance, cryptocurrency, blockchain technology, and working with emerging technologies. Besides working for Cointelegraph Research, Michael is a Ph.D. candidate working on his dissertation, which is focused on the theory and application of DAOs. Keychain Ventures is a crypto investment firm that engages in investing different funds in the blockchain space. Keychain Ventures, along with Cointelegraph Research, will be presenting quarterly interviews with VC firms as well as crypto/blockchain projects which have recently gone through a funding round. These interviews will open up different viewpoints of investment practices from all parties. This article is for information purposes only and represents neither investment advice nor an investment analysis or an invitation to buy or sell financial instruments. Specifically, the document does not serve as a substitute for individual investment or other advice.

Ethereum is a decentralized finance giant that has seen significant growth over the past few years, spurred on by events like “DeFi Summer” and the rise of nonfungible tokens (NFTs). Ethereum’s popularity, however, may be leading to its downfall, as other protocols look to eat away at or completely consume its market position. Bitcoin and the birth of Ethereum Bitcoin (BTC) is the mother of all blockchains and was the first modern iteration of what is widely known today as cryptocurrency. Since then, there have been numerous attempts to provide users greater functionality, but most have not had the staying power. One that has risen to the challenge is Ethereum, with its native Ether (ETH) coin now the second-largest cryptocurrency by market capitalization. Cointelegraph Research has released a 74-page report that does a deep dive into Ethereum’s rise to this position, starting off by examining Bitcoin alongside Ethereum’s history and where it is today. Ethereum provided users with a way to create smart contracts in a way Bitcoin could not, which helped propel Ethereum to its current status as the leading blockchain for DeFi. It’s clear that Bitcoin is here to stay, and there have been advancements in its DeFi capabilities — mostly utilizing layer-2 solutions to help scalability, such as Lightning Network, Portal and DeFiChain. However, Ethereum is still out in front of Bitcoin in the DeFi space, but can it stay there?The current strengths and weaknesses of Ethereum Ethereum saw unprecedented adoption in 2021, peaking at 800,000 daily active users in November. It has real-life adoption use cases, with a total value locked of over $150 billion across DeFi applications running on the blockchain in 2021. Some of the services offered by decentralized applications on Ethereum include lending, derivatives, asset management, stablecoins, trading and insurance. However, due to the increasing adoption of the blockchain over the past several years, its popularity is also its curse. Download the full report here, complete with charts and infographics.The more the network is used, the more congested it gets and the higher the transaction costs, also known as gas fees, subsequently become. These fees are there to help incentivize the network’s miners to engage with the proof-of-work consensus mechanism it utilizes. There is an answer to the congestion and scaling issue, and that is Ethereum’s switch to proof-of-stake and other upgrades in its full transition to what is known colloquially as Ethereum 2.0. However, delays in going live with the various stages of Eth2’s full rollout, combined with the rising popularity of other smart contract blockchains, could knock the crown off of Ethereum’s head. New kids on the block There are plenty of blockchain protocols out there trying to climb to the top of the crypto charts. In recent years, only a few have shown strong adoption, popularity and real-world use cases, and they are starting to get attention from some in the blockchain space who would normally go to Ethereum. Cointelegraph Research’s report dives into three of these blockchains: Solana, Polkadot and Algorand. Each protocol’s history, unique characteristics, ecosystem and potential to scale are explained in detail to help determine if any of these chains have what it takes to be the “Ethereum Killer.”Solana reports that it can process over 50,000 transactions per second (TPS), but the network has yet to reach these levels, though it still provides faster transaction speeds than Ethereum at a small fraction of the cost per transaction. Polkadot brings interoperability to the picture, allowing various chains to work seamlessly together. However, this has not been fully launched yet, and it is unclear how Polkadot will function when it really counts in the real world. Algorand is a blockchain created by some of the best minds in cryptography, with high TPS, low network fees, and no downtime history. Its adoption metrics show a slow but steady pace — will that strategy be a winning one in the end?Solana, Polkadot, and Algorand operate very differently from one another, and each offers advantages over Ethereum in its current form. While it is true that the future may be multichain and complete with paths toward interoperability, only the best can dominate in the DeFi space — which one will it be?Can Ethereum hold its position in 2022 and beyond? Ethereum has some stiff competition in the likes of Solana, Polkadot and Algorand. Each provides solutions to Ethereum’s current issues. If the full rollout of Eth2 is not executed well or continues to be delayed, these up-and-coming protocols would be happy to take Ethereum’s place as King of DeFi.This article is for information purposes only and represents neither investment advice nor an investment analysis or an invitation to buy or sell financial instruments. Specifically, the document does not serve as a substitute for individual investment or other advice.