Investments in Crypto Infrastructure: 2022’s Impact Today

After examining over 1,200 publicly available crypto pre-seed and seed rounds from 2022, Lattice Fund discovered that the seed-stage crypto market saw a shift in investor attention towards the more stable and established areas of Infrastructure and Centralized Finance (CeFi).

This transition followed a period of exploration into emerging sectors during 2021.

Infrastructure and CeFi

According to the latest report from venture capital group Lattice Fund, this renewed interest led to nearly $2 billion and $450 million being allocated to these sectors, indicating a 3x and 2x increase over the previous year.

This change reflected “strong investor confidence,” with 80% of CeFi projects and 78% of Infrastructure projects successfully launching on mainnet, significantly outperforming sectors such as Consumer Web3 and DeFi.

As newer areas like NFTs and the metaverse began to lose traction, infrastructure projects—primarily serving other crypto companies—proved to be a reliable choice for long-term growth. Eigenlayer, for instance, completed a seed round in January 2022 and effectively scaled its AVS go-to-market strategy, garnering interest from middleware projects.

In total, investors allocated $5 billion to nearly 1,200 startups from the 2022 cohort, showcasing a 2.5x increase from the prior year.

Ethereum further reinforced its status as the leading layer-one ecosystem in 2022, drawing in $1.4 billion in investments, significantly outpacing competing networks like Solana, which raised nearly $350 million.

While Ethereum and Solana projects experienced similar successes in obtaining follow-on funding, other ecosystems encountered difficulties. For instance, Polkadot’s ecosystem saw a notable 40% drop in fundraising, and no teams within the NEAR ecosystem succeeded in acquiring additional capital.

Meanwhile, Binance’s ecosystem dealt with significant attrition, with one-third of its teams shutting down their operations. Solana’s failure rate also increased, doubling from 2021 to 26%.

In spite of these obstacles, Bitcoin projects showed remarkable resilience, with 100% of teams remaining active after two years, underscoring its sustained stability amid a turbulent market.

NFTs and Metaverse Lose Momentum

Engaging users became progressively harder during the bear market as retail interest waned. Sectors that thrived during the 2022 wave, such as NFTs, the metaverse, and gaming, are finding it difficult to sustain user engagement compared to two years prior.

The report also mentioned that the sectors dominating today’s discussions may not necessarily align with long-term investor interests.

Even with 75 teams raising nearly $280 million, the metaverse has yet to see any project achieve product-market fit, and over 21% of teams have shut down operations.

Conversely, sectors like DePIN and AI, which were scarcely mentioned in 2022, have emerged as some of the hottest topics today.