Who is funding DeFi protocols?
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The DeFi funding landscape has transformed dramatically in 2024-2025, with venture capital flowing back into protocols after the crypto winter.
Understanding who's writing the checks, how much they're investing, and what they're betting on can make the difference between securing funding and getting passed over. And if you need to understand this market in 30 minutes with the latest information, you can download our quick market pitch.
Summary
DeFi funding reached approximately $4-5 billion in 2024 and is tracking toward $1.6 billion in the first half of 2025, with crypto-native funds like Binance Labs and a16z Crypto leading deal activity while traditional finance giants like BlackRock enter through strategic tokenization investments.
| Category | Key Players | Investment Range | Focus Areas |
|---|---|---|---|
| Top Crypto VCs | Binance Labs (19 deals), a16z Crypto (17 deals), 1kx (11 deals) | $2-100M per round | Restaking, RWA |
| Traditional Finance | BlackRock, Goldman Sachs, JPMorgan | $47-100M strategic | Tokenization |
| Early-Stage Rounds | BitVault, Datagram, Brickken | $2-4M pre-seed | Stablecoins, DePIN |
| Geographic Leaders | US (36% deals), Hong Kong, Singapore | Varies by region | Compliance hubs |
| L1/L2 Ecosystem Funds | Avalanche Blizzard, Polygon Labs, Optimism | $1M grants to $4M rounds | Native ecosystem |
| Hot R&D Themes | EigenLayer, Ethena, DePIN projects | $50-100M Series B | Shared security |
| 2026 Trends | RWA tokenization, AI agents, fixed-rate lending | TBD | TradFi integration |
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DOWNLOAD THE DECKWhich venture capital firms are most active in DeFi right now?
Binance Labs leads the pack with approximately 19 DeFi deals closed between 2024 and the first half of 2025, including Datagram's $4 million pre-seed round in July 2025.
a16z Crypto follows closely with 17 deals, notably leading EigenLayer's massive $100 million Series B for restaking infrastructure. The traditional VC giant has maintained its crypto-first strategy despite market volatility.
Other major players include 1kx with 11 deals (backing Celestia's $100 million Series B for modular data availability), Polychain Capital with 12 deals (leading Morpho Labs' $50 million Series B), and Hack VC with 16 deals focused on AI-DeFi infrastructure crossovers.
These firms differentiate themselves through sector specialization rather than just check size. Binance Labs leverages its exchange ecosystem for portfolio companies, while a16z provides regulatory and compliance support that's increasingly valuable as DeFi protocols seek institutional adoption.
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What are typical investment amounts and terms in DeFi deals?
Pre-seed and seed rounds typically range from $2-10 million, with a median of approximately $8.8 million based on 20 DeFi rounds totaling $176 million in February 2025 alone.
Series A rounds span $10-40 million and often include private token SAFTs (Simple Agreement for Future Tokens) alongside equity. Later-stage strategic rounds reach $50-100 million or more, as seen with EigenLayer and Ethena's recent funding.
Tokenomics terms remain heavily SAFT-focused with 12-18 month cliffs, 2-4 year linear unlocks, and "discount-plus-most-favoured-nation" clauses for strategic L1/L2 investors. These terms protect early investors while ensuring founders maintain sufficient token allocation for long-term incentive alignment.
VCs now scrutinize sustainable tokenomics models more carefully than during the 2021 bull run. They focus on fee-generating protocols that accrue value to token holders, utility token designs with clear use cases beyond speculation, and transparent fund allocation plans.
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Which early-stage DeFi startups received funding in 2024-2025?
Several notable early-stage companies secured significant funding rounds, each targeting specific DeFi infrastructure gaps.
| Date | Startup | Round Size | What They Build |
|---|---|---|---|
| Feb 2025 | Ethena Labs | $100M strategic | Synthetic-dollar stablecoin (USDe) designed for traditional finance settlement with institutional-grade risk management |
| Jun 2025 | BitVault | $2M pre-seed | Bitcoin-backed over-collateralized stablecoin launching on Polygon-incubated Katana chain with GSR and Gemini backing |
| Jul 2024 | BitFi (CeDeFi) | $50M seed | Bitcoin yield aggregator mixing centralized exchange order-flow with DeFi vaults for optimized returns |
| Jul 2025 | Datagram | $4M pre-seed | Interoperability layer for Decentralized Physical Infrastructure Networks (DePIN) led by Avalanche's Blizzard Fund |
| Jan 2025 | Brickken (EU) | €2.4M seed | Real-world asset tokenization SaaS platform targeting SMEs and real estate with regulatory compliance focus |
How much total funding flowed into DeFi in 2024-2025?
Total blockchain venture capital reached $13.6 billion in 2024, representing a significant recovery from the $10.1 billion seen in 2023.
DeFi captured approximately $4-5 billion of this total, representing roughly 40% of total crypto deal count across an estimated 530 DeFi-specific deals. This marked a recovery year after the 2023 funding trough.
For 2025, Q1 alone saw $4.9 billion in crypto funding, with year-to-date reaching $7.7 billion by mid-year. DeFi's share approximated $1.6 billion, representing about 22% of total funding with February 2025 alone contributing $176 million across DeFi deals.
Industry forecasts predict total crypto VC funding will reach approximately $18 billion in 2025, implying roughly $4 billion for DeFi if current sector allocation ratios hold steady. This represents a sustainable recovery rather than the unsustainable boom levels of 2021.
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DOWNLOADWhich regions are seeing the most DeFi funding activity?
The United States maintains its leadership position, capturing 36% of crypto VC deals in 2024, with DeFi protocols benefiting from clearer regulatory frameworks and established institutional infrastructure.
However, Asia is rapidly closing the gap, with Hong Kong and Singapore emerging as compliant DeFi hubs. These jurisdictions benefit from friendlier licensing regimes and increased local funding programs designed to attract Web3 companies.
Europe maintains steady activity, particularly around real-world asset tokenization projects like Brickken's seed round. EU-based VCs are increasingly focused on regulatory-compliant DeFi infrastructure that can bridge traditional finance.
Emerging markets including Latin America, MENA, and Africa see targeted investments in payments and foreign exchange DeFi solutions, though typically with smaller check sizes under $5 million. These regions focus on solving local financial inclusion challenges through DeFi infrastructure.
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Are traditional finance and Big Tech investing directly in DeFi?
BlackRock has emerged as the most aggressive traditional finance player, leading Securitize's $47 million round and launching BUIDL, a tokenized money-market fund on Ethereum that represents institutional-grade DeFi infrastructure.
Goldman Sachs has become an early client on JPMorgan's Onyx blockchain repo platform and is exploring DeFi-style on-chain repos. The investment bank is testing how traditional financial instruments can benefit from DeFi's composability and 24/7 settlement.
Google Cloud's Web3 Startup Program now includes oracle network Gora to nurture DeFi infrastructure, while AWS continues its "Activate for Web3" credits program. Polygon and Avalanche subnets are often incubated through AWS credits, though these are non-equity arrangements.
While Amazon and Microsoft haven't made direct equity rounds, both offer infrastructure credits that materially de-risk early DeFi projects. Their cloud platforms increasingly support the computational requirements of complex DeFi protocols.
JPMorgan, through its Onyx platform, is exploring how DeFi protocols can enhance traditional repo markets and institutional settlement. This represents a bridge-building approach rather than direct protocol investment.
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Which Layer 1 and Layer 2 protocols fund their own DeFi ecosystems?
Avalanche's Blizzard Fund actively leads pre-seed rounds, most notably Datagram's $4 million raise for DePIN interoperability infrastructure that will enhance Avalanche's subnet ecosystem.
Polygon Labs incubated the Katana chain where BitVault will launch its Bitcoin-backed stablecoin, demonstrating how L2 providers create specialized environments for specific DeFi use cases.
Optimism's "Stimpack" program, Arbitrum DAO, Solana Foundation, and StarkWare all operate grant pools offering up to $1 million per team for protocol builders. Awards are typically paid in native tokens with linear vesting schedules.
These ecosystem funds provide more than capital—they offer technical integration support, co-marketing opportunities, and direct access to their user bases. This creates competitive advantages that pure financial investors cannot match.
What R&D breakthroughs are attracting the most investor attention?
Restaking and shared security mechanisms lead current investment themes, with EigenLayer's $100 million Series B from a16z demonstrating massive appetite for protocols that let ETH secure external services while creating new middleware fee markets.
| Theme | Representative Investment | Why Investors Care |
|---|---|---|
| Restaking/Shared Security | EigenLayer $100M Series B (a16z) | Creates yield layer and new middleware fee markets using existing ETH stake |
| Real-World Asset Tokenization | Ondo Finance $95M into BlackRock's BUIDL | Institutions want on-chain Treasuries and repo for instant settlement |
| DePIN Infrastructure | Borderless Capital $100M DePIN fund | Hardware-meets-DeFi creates tangible value beyond pure speculation |
| Account Abstraction | Multiple seed rounds under $5M | Dramatically lowers UX friction for mainstream adoption |
| Fixed-Rate Protocols | Ethena, Maple, Notional upgrades | Institutional demand for predictable yield products |
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DOWNLOADHow do crypto-native funds differ from traditional VCs in their DeFi investments?
Crypto-native funds and DAOs operate with fundamentally different investment criteria compared to traditional venture capital firms.
Uniswap Foundation allocated $99.8 million for 2025-2026 grants with $12.4 million already deployed in Q1 2025, focusing exclusively on permissionless liquidity R&D with no equity requirements—only token-based arrangements.
Aave Grants DAO operates with 3 million GHO plus continuing AAVE buybacks for operations, offering smaller grants ($5,000-$200,000) with milestone-based funding that moves faster than traditional VC processes.
Lido DAO votes on strategic seed tickets paid in LDO/ETH, with governance decisions made publicly and vesting terms decided by token holder vote rather than traditional limited partner committees.
These crypto-native checks are typically smaller but faster, and they come with instant community liquidity and protocol integration opportunities. Traditional VCs write larger equity-plus-SAFT rounds with longer vesting periods but offer more comprehensive business development support.
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What trends are investors betting on for 2026?
Real-world asset tokenization dominates 2026 investment thesis development, with analysts from Fintech Times and European Financial Review pointing to tokenized Treasury bills and RWA debt markets as the next major institutional adoption driver.
Fixed-rate lending protocols are expected to mature significantly as institutions demand predictable yield products that match traditional finance expectations. Current variable-rate DeFi protocols are developing fixed-rate products to capture this institutional capital.
AI agents plugging into DeFi rails represent an emerging intersection that could automate complex yield farming and portfolio management strategies. Early-stage investments are targeting infrastructure that enables AI-driven DeFi operations.
Intent-based DEX user experience improvements, yield-bearing stablecoins, and DePIN rollouts continue attracting significant venture attention. Points-to-airdrop farming mechanisms are expected to evolve into more sophisticated token distribution models.
Restaking and modular rollups remain on every major VC prediction list, with expectations that these technologies will enable new categories of DeFi applications that were previously impossible or economically unviable.
What role do launchpads, grants, and hackathons play in early-stage funding?
Launchpads including Binance Launchpad/Launchpool, CoinList, and Seedify continue facilitating retail-facing token sales that raise $1-10 million per project, often at higher fully diluted valuations but providing instant community engagement.
Major hackathons like ETHGlobal, Encode, and Avalanche Rush offer winner prizes ranging from $10,000 to $150,000, though their primary value lies in serving as pre-seed pipelines for VC scouts who treat them as deal sourcing events.
DAO and Layer 2 grant programs fill the crucial "friends-and-family" funding gap with non-dilutive capital. These grants allow founders to build initial traction without giving up equity or tokens to external investors.
The grant ecosystem has become increasingly sophisticated, with milestone-based funding, technical mentorship, and ecosystem integration support that rivals traditional accelerator programs. Many successful DeFi protocols now trace their origins to initial grant funding.
Where can founders and investors find visibility on upcoming DeFi funding opportunities?
DeFiLlama's "Raises" tab provides real-time feeds of announced rounds, sortable by sector and blockchain, making it the go-to resource for tracking funding activity across all major DeFi protocols.
- RootData and CryptoRank: Comprehensive deal databases with valuation comparisons, with CryptoRank's Q1 2025 report specifically breaking out DeFi versus infrastructure investments
- ICO Drops and CoinList Blog: Calendar tracking for retail-facing token sales and institutional private rounds
- Binance Launchpad/Launchpool dashboard: Upcoming exchange-hosted token launches with detailed tokenomics and vesting schedules
- Grant hubs: Uniswap Foundation, Aave Grants, and Optimism maintain public ledgers of rolling RFPs and funding rounds with transparent application processes
For founders, joining protocol-specific Discord channels and following key VCs on Twitter often provides earliest signals of funding interest. Many deals begin with informal conversations in these communities before formal processes begin.
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Conclusion
The DeFi funding landscape has matured significantly, with approximately $4-5 billion invested in 2024 and strong momentum continuing into 2025.
Success in this market requires understanding that crypto-native funds offer speed and community access, while traditional VCs provide larger checks and institutional credibility—and the best protocols often combine both funding sources strategically.
Sources
- Top 10 Crypto VC Investors Active in Q3-Q4 2024
- Blizzard the Avalanche Fund Leads Datagram's $4M Pre-Seed Round
- EigenLayer Raises $100M from a16z
- Crypto VC deals top $1.1B in February as DeFi interest surges
- Ethena Raises $100M
- BitVault Raises $2M from GSR, Gemini, and Auros
- BitFi Raises $50 Million in Seed Funding
- Brickken closes 2.4 million round
- Crypto funding climbs to $13.6B in 2024
- The Funding: Crypto VC Recap 2024
- Crypto funding hits $4.9B in Q1 2025
- Crypto Funding Surges: $7.7 Billion Invested So Far in 2025
- Hong Kong and Singapore Lead Asia's Race to Become Crypto Hubs
- Securitize announces $47 Million Strategic Funding Round led by BlackRock
- BlackRock Launches First Tokenized Fund on Ethereum Blockchain
- Review of JPMorgan's Onyx Blockchain Platform
- Blockchain oracle network joins Google's Web3 program
- Ondo Finance to Move $95M to BlackRock's Tokenized Fund
- Helium Network releases strong Q4 2024 report
- Borderless Capital Announces $100M DePIN Fund
- Uniswap Foundation reports $140M Q1 revenue, $12M in grants
- Aave June 2025 - Funding Update
- Lido 2025 Company Profile