{"id":889,"date":"2022-06-08T12:00:00","date_gmt":"2022-06-08T12:00:00","guid":{"rendered":"https:\/\/grandpascrypto.com\/?p=889"},"modified":"2022-06-07T18:15:16","modified_gmt":"2022-06-07T18:15:16","slug":"a16zs-mid-year-crypto-report","status":"publish","type":"post","link":"https:\/\/grandpascrypto.com\/a16zs-mid-year-crypto-report\/","title":{"rendered":"a16z\u2019s Mid-Year Crypto Report"},"content":{"rendered":"\n

tl;dr Summary:<\/strong> a16z, one of the largest Venture Capital firms in Web3, recently released its state of crypto report. The report comes at a turbulent time in Web3 where prices of crypto have been slashed, networks are failing, and the appetite for digital assets seem to be fading. In their report, they reiterate areas of web3 they continue to be excited about. The report provides a much needed step back, giving a by-the-numbers look at current trends and highlighting just how much room for innovation web3 technologies still have.<\/em><\/p>\n\n\n\n

Venture Capital firms like a16z have been a major stimulant of innovation within the web3 space. As one of the largest investors of web3 companies, a16z has driven the growth of notable technologies such as Uniswap, Sky Mavis and Solana. <\/p>\n\n\n\n

On March 17th<\/sup>, a16z Crypto, Andreesen Horowitz\u2019s Web3 venture fund, released their <\/a>State of Crypto 2022 report outlining the trends they are seeing in multiple areas of web3.\u00a0<\/p>\n\n\n\n

The release of the report is interesting for two main reasons:<\/p>\n\n\n\n

  1. The broader market dynamics of 2022 have seen a decrease in start-up valuations and withdrawal of Venture Capital (VC) investing. Despite these challenges in the wider VC ecosystem, crypto start-ups have remained insulated from these negative dynamics, enjoying high valuations and an abundance of funding from firms.<\/li>
  2. Web3 has experienced a handful of challenges such as LUNA\u2019s crash<\/a>, an almost 50% decline in NFT trades<\/a>, and the decline of bitcoin down to below $30,000<\/a> for the first time since July of 2021.\u00a0<\/li><\/ol>\n\n\n\n

    With these factors in mind, the question on everyone\u2019s mind is whether web3 will see a pullback from Venture Capital firms or will the party go on?<\/p>\n\n\n\n

    \"\"<\/figure>\n\n\n\n

    a16z\u2019s report outlines why the major web3 proponent doesn\u2019t plan on backing down but plans to lean even deeper into the promising space. With the announcement of their 4th $4.5 billion fund on May 25th<\/sup>, 2022, it seems the firm\u2019s sentiment aren\u2019t merely words. Below we discuss the major highlights of the report and dig deeper into why the fund remains excited by web3. <\/p>\n\n\n\n

    Innovation Cycle<\/strong><\/h2>\n\n\n\n

    The central theory to a16z\u2019s near-term optimism around web3, despite recent challenges, is this idea of innovation cycles. By looking at the trends between market cap and developer activity you can see this correlation between their trends.<\/p>\n\n\n\n

    When market cap goes up, it breeds interest from developers which eventually becomes entrepreneurial ventures. <\/p>\n\n\n\n

    Layer 1 Blockchain<\/strong><\/h2>\n\n\n\n

    On the layer 1 level, their report shows interesting dynamics into the competition we have been hearing about. Solana boasts the highest number of active addresses and daily transactions at 15.4 million and 15.3 million respectively versus Ethereum\u2019s 5.5 million active addresses and 1.1 million daily transactions. While the number of active addresses and transactions are higher for Solana, the values listed don\u2019t account for the activity taking place off layer 1, instead only looking at direct layer 1 activity. <\/p>\n\n\n\n

    It also doesn\u2019t provide insight into the significant activity Ethereum has been seeing from a development standpoint. With approximately 4,000 monthly active developers, Ethereum has over four times more monthly developer interest than any other chain. The closest second is Solana which has approximately 1,000 monthly developers.<\/p>\n\n\n\n

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    For more insights sign up for web3 weekly, a new newsletter by a16z crypto that\u2019s your go-to guide on web3 and the next internet \ud83d\udce8 https:\/\/t.co\/2AwFmtsEG9<\/a><\/p>— a16z (@a16z) June 6, 2022<\/a><\/blockquote>