Despite the bear market, the decentralized finance (DeFi) ecosystem enjoyed a flourishing fundraising season in 2022. A CoinGecko report revealed that the ecosystem saw $2.71 billion in funding from institutional investors last year, representing a 190% increase.
DeFi Funding Supersedes CeFi Funding
Analysis shows that DeFi protocols’ growth in raised funds for 2022 was nearly triple its worth in the previous year. The DeFi family’s latest rise represents 41x its value in 2020, which was $65 million.
These metrics are significantly higher than the centralized finance (CeFi) ecosystem. CeFi platforms include crypto exchanges such as Binance, FTX, KuCoin, Kraken, etc. At the end of 2022, CeFi platforms saw total funding worth $4.39 billion. It represents less than one-third of its value in 2021, which was $16.29 billion.
Among the several funding rounds held in 2022 was the decentralized exchange Uniswap’s $100 million funding. The funding pushed its valuation to $1 billion at the time. Another DeFi protocol, Lido, raised $94 million during the year.
Some big market players contributed to CeFi’s poor performance last year. Infamous examples included the derivatives exchange FTX and its American subsidiary, FTX.US. These two companies raised a combined total of $800 million in January 2022. Later that year, both exchanges crashed while owing billions of dollars to their creditors amid filing for bankruptcy.
Meanwhile, a January report showed that the total crypto funding in 2022 ($21 billion) was the second-largest within the past five years. Above 2022 was 2021, which saw $37 billion worth of funds enter the purses of crypto companies.
Other Blockchain Products See Decreased Funding
Aside from the CeFi ecosystem, other blockchain-based products like GameFi and NFT ecosystems saw decreases.
Admittedly, GameFi platforms such as Horizon and Vulcan saw a cash influx of $40 million and $8 million, respectively. However, the ecosystem recorded an overall decrease of 43% from its $2.95 billion valuation in 2021.
The non-fungible token (NFT) family, which saw explosive growth two years ago, recorded a 36.9% decrease, bringing its total funding to $883 billion. Notable funding rounds include the NFT project Doodles and domain service provider Unstoppable Domains, which raised $54 million and $65 million, respectively.
