AllianceDAO’s accelerator program, which receives around 3,000 applications each year, has revealed some interesting developments in the crypto startup world in the first six months of 2024. This large sample size provides exclusive information on industry trends, especially regarding popular blockchains, product focus, geographic distribution, and founder profiles. Below are five key trends impacting the crypto startup landscape.
1. Dominant Chains and Layer 1 Ecosystem
Ethereum continues to be the top ecosystem for new cryptocurrency startups, with Solana showing signs of a strong comeback after hitting major roadblocks following the collapse of FTX in late 2022.
Meanwhile, Bitcoin is currently receiving renewed attention due to the growing excitement surrounding Bitcoin Ordinal, Rune, and Layer 2 solutions.
2. The Rise of Ethereum Layer 2
Optimistic rollups have been gaining a lot of traction within the Ethereum Layer 2 ecosystem in recent years, and in the first six months of 2024, Base stood out as housing more than a quarter of cryptocurrency startups developing on Ethereum Layer 2.
3. Shift in product focus: from NFTs to infrastructure, DeFi, and AI
The product landscape is changing, marked by a decline in non-fungible token (NFT) projects and an increase in infrastructure, decentralized finance (DeFi), payment solutions, and AI crypto projects.
This shift, while not generating much excitement from the general public, signals that real-world use of DeFi and payment solutions is gaining popularity and the industry is growing.
4. Geographic Distribution of Cryptocurrency Startups
There has been a significant increase in startups originating from Asia and Africa, reaching their highest percentage ever, while the percentage of startups originating from the United States and Canada is at its lowest ever.
This shift is likely due to regulatory uncertainty in the U.S. and the growing use of cryptocurrencies in emerging markets. North America, Europe, and Asia remain the leading regions for cryptocurrency startups, with each region accounting for around 25-33% of all new projects.
5. Founder background and team dynamics
The influence of founders from Big Tech reached its highest point in 2021, but remains important as 30% of current founders have this experience. Similarly, the proportion of entrepreneurs from prestigious universities also reached its highest point in 2021. Around 10% of founders have previous entrepreneurial experience, suggesting a good balance of experience and fresh perspectives.
In terms of team structure, the majority of startups consist of 2-5 people, which is considered the ideal size for a company before its product has achieved market success. Interestingly, around 75% of startups function fully remotely, demonstrating the flexibility and adaptability of the industry.
Conclusion
Patterns seen in the first half of 2024 point to a dynamic state of the crypto startup scene. Ethereum’s growing influence, Solana’s newfound strength, the emergence of Layer 2 solutions, and the growing importance of infrastructure, DeFi, and AI highlight a sector that is rapidly developing and advancing. The future of crypto startups looks bright and promising with a growing presence in developing markets and a mix of experienced and new founders.
