Crypto markets may be in a downtrend so far in 2022, but there is no slowing in the massive amount of venture capital cash that is flooding into decentralized finance (DeFi) and Web3 projects.
The latest big name to raise big bucks is Electric Capital which announced a one-billion-dollar round of funding on March 1. The massive fundraiser will go towards supporting crypto networks, Web3 protocols, and blockchain-enabled businesses it added.
Electric Capital is an investment firm that focuses on early startups in the crypto and Web3 space. Some of its investments include Bitwise, Celo, Dfinity, dYdX, Elrond, Gitcoin, Kraken, and Near. The company pledges financial support ranging from $1 million to $20 million in programmable money and the Web3 economy.
Five DeFi concepts to push
On March 2, Electric Capital partner Ken Deeter highlighted five key areas that the firm would be channeling some of that bumper funding into.
The first area of interest for the firm is growing decentralized finance (DeFi) on alternative chains to Ethereum. While Ethereum is still the “gold standard,” Deeter noted that non-Ethereum chains will be a “more affordable onramp for the next wave of users into DeFi.”
Secondly, Electric Capital will invest in bridging yield opportunities across chains and seeking more ways for users to access yield opportunities across various networks.
It also wants to make DeFi much easier by providing simple exposure to complex strategies.
“Platforms that give users simple exposure to strategies like delta-neutral yield farming, leveraged market making, downside protected lending, and others,”
Growing protocol-owned liquidity is the “new battleground for DeFi protocols,” added Deeter. The firm is interested in bootstrapping mechanisms for liquidity on new protocols.
Payment streams and vesting is the final area of interest. These include streams for employment contracts, DAO-to-DAO contracts, and loan repayments. “Standardized primitives can unlock an entirely new segment of the economy,” said Deeter.
Emerging trends
The announcement also highlighted a number of trends emerging in the DeFi sector. DAOs continue to gain traction, empowering global communities to allocate resources to large and small initiatives.
NFTs (nonfungible tokens) will form the “asset layer for Web3 and the bedrock for new types of financial instruments,” while DeFi will democratize financial access to them.
Engineers will be able to build the next generation of applications without a central point of failure or control on this new decentralized infrastructure, it added before concluding that millions of new users will be onboarded to Web3.
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