From CeFi to DeFi: The Funding Landscape of Crypto is Changing — Are You Ready?
The world of crypto funding can be complex and difficult to navigate, but recent trends suggest a major shift in the funding landscape from centralized finance (CeFi) to decentralized finance (DeFi). According to a recent report by CoinGecko, investments into CeFi projects have plummeted by 73% to $4.3 billion, while DeFi has seen a remarkable increase of 190%, with digital asset investment firms pouring $2.7 billion into these projects. The DeFi space is now emerging as the new frontier for investors in the crypto industry, with on-chain derivative platforms, decentralized stablecoins, and Ethereum L2s being just a few of the exciting investment opportunities that investors are closely monitoring.
One possible reason for this shift is that the CeFi space may have reached a point of saturation, and investors are looking for new and potentially more lucrative opportunities in the DeFi space. However, it is important to note that the crypto market is highly volatile, and there are no guarantees when it comes to investing in any project.
In addition to investing in promising crypto projects, another key factor that investors are looking for in the current market is strong strategic partnerships. These partnerships can bring added social capital to a project and increase its visibility in the industry. Investors are now seeking projects that are being incubated by reputable incubators or accelerators that have strong networks of strategic partners. These partnerships can help the project gain traction in the industry and attract the attention of venture capitalists and other investors.
Strategic partnerships can also provide valuable resources and expertise to a project, particularly in the early stages of development. For example, a project that partners with a leading blockchain platform can benefit from access to technical expertise and development resources that can help accelerate the project’s progress. Furthermore, strong partnerships can also help with market access and user adoption, which are crucial for success in a highly competitive market.
Overall, while investing in promising crypto projects remains a key focus for investors, the importance of strategic partnerships and social capital cannot be underestimated. As such, many investors are now looking to invest in projects that have strong partnerships with reputable incubators, accelerators, and strategic partners, which can help increase the project’s visibility, access to resources, and ultimately, its chances of success in the highly competitive crypto market. As the crypto market continues to evolve, it is essential for investors to stay up-to-date on emerging trends and developments in the space to make informed investment decisions.
Sheesha Finance is a decentralized, tokenized incubator and accelerator that’s helping web3 startups across all industries and blockchain networks build products and services that solve real-world teething problems. Based in the MENA region, Sheesha Finance is one of the first platforms to provide everyday investors with access to a diverse portfolio of early-stage projects, and its smart contract-based system is fully autonomous, making it efficient and user-friendly for both institutional and retail investors.
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Writer: Nathan Cooper, Chief Program and Innovation Officer at Sheesha Finance