How to Raise Money
for DeFi Projects

Relevant Market Analysis

Market analysis showed that only 60 investment rounds with a total volume of 360 million dollars took place in January. During the same period last year, there were 157 rounds for $5 billion. The difference is huge. Although if we were comparing other periods, the changes would be smoother, with only slight shifts by industry.

The thing is that the total investment volume which you can receive from funds has significantly changed. Also, analyzing market conditions during the year, we can notice some interesting correlations. Different events influenced the way investors accepted new products and protocols and funded them.

For example, the CeFi market had overtaken the DeFi market in terms of funds and the number of rounds before Luna, Celius and FTX fell. But after this, the situation started to change. First, the ratio of rounds and funds was balanced. After a while, the number of funds on the DeFi market rose.

The main trend of the DeFi market

Now it's highly important to understand whether you create something trendy and acceptable by the market. Depending on that, the volume of investments and average check will differ. You have to check if the amount of funds would be enough to cover your development costs.

In general, we can state this main trend of the DeFi market:

• It's unlikely to receive funds without good preparation. You will need an MVP prototype, an experienced team, clear vision of goals and development processes.

• We can notice a heyday of auxiliary services. They help projects find support, grow and charge a commission for this. The most common option is the success fee. On average, it's 5-7% but may raise to 10% per round. It's important to mention that those services often fail to perform on promises.

• It's possible to receive an initial boost for development from accelerators, influencers or business angels. It might be enough to achieve the MVP stage.

If you've developed a product related to DeFi, it can be a great choice for you. Take a closer look at each of the top infrastructure projects. Pay attention to proposals from pools, tasks of the community and how they deal with them. If they can't get some of the tasks done, you can think of implementing it in your product.

Considering this top of infrastructure projects, you can move forward and decide whether to build your products and services to fit them or to solve their problems via functional improvements. This process can be compared to the synergy of a whale and a clinging fish.

Total Value Locked

Total Value Locked helps to evaluate the cost of funds on protocol contracts. This metric also measures investors' interest.

In the chart below, we can see that the TVL peak was last year. It was easy to receive money, and many analysts predicted further growth. However, the market is in a slow fall now.

This market condition makes people think realistically and willing to be guided by something. We can recommend paying attention to TOP-10 infrastructure projects. You can see them in the picture below. All of them have their own money, support, possibilities and tools to help other projects.

Strategy for getting into the big system

Representatives of large infrastructure projects are ready to pay for solving their problems. In this case, these projects are almost like funds, only with a smaller check and different terms. Your first steps are to find out what these projects are already investing in and how to become an asset with minimal changes.

Pay attention to:

• L1 blockchains;
• professional communities;
• infrastructure projects.

If you embed into the ecosystem, be ready to commit to the selected blockchain, although there are several successful cross-chain projects.

If you manage to find a solution for specific users, you will be able to:

• build a go-to-market strategy easily;
• get first users;
• get an easy way out, grant support and easy funding.

Examples

Axelar

This option is for projects with solutions like cross-chain bridges. Axelar has two investment areas. The first one is a Longhash accelerator. You can get funding if you go through the accelerator. The second option is to receive a grant from their $60 million fund for Web3 developers. But the easiest way to do it is through the Longhash accelerator.

TonPlay Ecosystem

These guys also offer several options. The first is an out-of-the-box solution that helps developers transfer their game to Ton's smart contracts. The second way is an opportunity for initial traction with their audience. After that, you will also have a chance to receive a grant or get funding.