Despite a tumultuous 2022 for the crypto market, more than 80% of startups in the sector that raised funds that year continue to thrive. This surprising resilience demonstrates the underlying vitality of the blockchain ecosystem, beyond fluctuations in the price of Bitcoin.
Unexpected resilience in a chaotic crypto market
The year 2022 was marked by resounding collapses in the crypto universe, like the FTX debacle. However, the Lattice Fund report reveals a very different reality for young startups in the sector. Of more than 1,200 startups that collectively raised $5 billion, 76% managed to launch a working product.
This survival rate high demonstrates the solid fundamentals of many projects, beyond spectacular market fluctuations. Infrastructure and centralized finance (CeFi) particularly stand out, with 80% and 78% of projects having achieved their ambitions respectively.
The case of EigenLayer, an Ethereum re-staking protocol, illustrates the potential for exponential growth in this hostile environment. The company was able to capitalize on its strategy to become a major player in 2023.
Bitcoin and Ethereum dominate, challenges persist
The study highlights the predominance of Ethereum as the ecosystem of choice for new projects. With $1.4 billion invested in 314 initiatives, the Ethereum blockchain confirms its status as an essential platform.
Even more surprising, startups built on Bitcoin display flawless resilience: 100% of projects funded in 2022 are still active. This remarkable statistic highlights the strength of the Bitcoin ecosystem, despite its reputation as an “old” technology.
However, challenges remain numerous for this generation of entrepreneurs. The report highlights the difficulty of finding “product-market fit” in a stagnant market, with only 1.5% of startups achieving this. Increased competition and rapidly changing technology trends also make it more difficult for teams looking to stand out.
As investor attention shifts to new niches like artificial intelligence or physical decentralized networks (DePIN), crypto startups of 2022 will need to double down on innovation to maintain their growth trajectory and deliver on their initial promises.
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