Original | Odaily Planet Daily (@OdailyChina)
Author | jk
The cryptocurrency venture capital market is undergoing a quiet transformation. In DefiLlama's latest funding data, among the 73 projects that completed financings exceeding $10 million in the past three months, there are almost no Layer 1 or Layer 2 public chains to be found. The public chain sector, once considered the "holy grail," has now nearly disappeared. Meanwhile, prediction markets, payment systems, RWA (Real World Assets), and infrastructure targeting ordinary users are attracting massive capital inflows.
L1, L2 Boom Ends, Large AI Financings Also Nearly Extinguished
Looking back at the peak of the 2021-2022 bull market, new public chains like Solana, Avalanche, and Fantom routinely raised hundreds of millions of dollars, with investors vying to bet on "Ethereum killers." However, three years later, the market landscape has fundamentally changed.
From Movement, Story, to this year's Berachain and Monad, the era of large public chain financings is no longer the norm.
According to data from The Block, the overall funding for blockchain networks (including L1 and L2) in 2024 was approximately $1.8 billion. While still an important sector, growth has noticeably slowed. According to statistics by user @pgreyy on X, in Q4 2025, aside from Tempo (a new public chain focused solely on payments and backed by Paradigm), no new L1 or L2 managed to secure an investment exceeding $10 million.
Can a public chain without a $10 million investment still fulfill the role of a "world computer" or an "Ethereum killer"?
Investors have realized that the market doesn't need more "high-performance public chains"; it needs applications that can bring real users and real revenue. Crypto influencer @sjdedic stated his conclusion on X: "No one cares about infrastructure anymore. The spotlight has shifted to the application layer—consumer-facing products and real use cases. Those L1s stuck in the 'medium intelligence trap,' focusing only on technology while ignoring everything else, are in trouble." He further predicted: "I wouldn't be surprised to see applications valued at tens of billions of dollars in the coming years, while L1 tokens gradually lose market share and slowly become irrelevant."
Similarly, although AI is the hottest tech concept of 2025, among the crypto projects that raised over $10 million in the past three months, only two belong to the AI sector: Inference secured an $11.8 million seed round, and TAO Synergies Inc completed a $11 million private equity round, totaling just $22.8 million. Even removing the $10 million threshold, there are only 9. This number is a drop in the bucket compared to Web2. For comparison, a mid-sized payment company, Coinflow, raised a single round of $25 million.
Who would have thought that just a year later, not only has the spectacle of Virtuals vs. ai16z become彻底的历史 (thoroughly history), but the entire AI x Web3 sector has also cooled down.
Rise of Emerging Sectors
Prediction Markets: From Fringe to Mainstream
Prediction markets are undoubtedly the dark horse of 2025 and the most prominent sector in this round of data. Polymarket and Kalshi alone attracted over $3.15 billion in funding, dominating the entire list. Polymarket generated over $3.3 billion in trading volume during the 2024 US election period, and its predictions were even more accurate than traditional polling agencies. In October 2025, the Intercontinental Exchange (ICE)—the parent company of the New York Stock Exchange—announced a massive $2 billion investment in Polymarket, pushing its valuation to $8-9 billion. Polymarket had also completed a $150 million funding round earlier.
Meanwhile, Kalshi not only completed a $1 billion Series E round but also secured a $300 million Series D round for its DeFi business, with investors including Sequoia, a16z, and Paradigm.
Payments & Banking: The Stablecoin "Super Cycle"
So who picked up the heat from public chain funding? The answer is undoubtedly the payments/banking sector.
Judging by the funding data, the payments sector raised nearly $1.3 billion, covering a complete ecosystem from underlying infrastructure to consumer applications. In 2025, stablecoin circulation grew by approximately $30 billion since the start of the year, with monthly transaction volumes exceeding $1 trillion, now comparable to Visa's scale.
Ripple Labs secured a $50 million strategic investment, and Rapyd completed a $50 million Series F round. These two companies alone raised $100 million, accounting for the majority of the payments sector. While giant players continue to lead, new digital banks, interbank B2B services, and financial services are also active. Singapore's Pave Bank, France's digital bank Deblock, Switzerland's Future Holdings, and the Netherlands' Amdax all received over $20 million in funding.
It's hard to imagine that in 2019, VC investment in the stablecoin field alone was less than $50 million.
RWA: Bridging Virtual and Real
Real World Asset tokenization (RWA) is moving from the experimental phase to scaled application. Looking at the funding data, Figure led the entire RWA sector with an IPO size of $787.5 million. Combined with its additional $25 million funding, one company contributed over 95% of the RWA sector's funding. RWA compliance company Satschel secured a $15 million equity round, on-chain stock trading infrastructure company Block Street completed an $11.5 million round, bringing the total RWA sector funding to over $85 million.
According to data from RWA.xyz, on-chain tokenized assets exceed $36 billion. Among them, the market cap of tokenized gold grew from $1 billion to over $3.27 billion in 2025, a 227% increase.
Simultaneously, traditional asset management giants like BlackRock, Apollo, and Franklin Templeton are actively tokenizing institutional-grade products. Private equity fund managers are beginning to adopt blockchain to represent ownership of traditional assets, enabling fractional ownership and instant settlement.
Another focus for VCs is infrastructure projects that can reach ordinary users. The characteristic of these projects is lowering the barrier to using cryptocurrency, allowing non-crypto-native users to easily access blockchain services. Directions like wallet abstraction, social logins, and fiat on/off ramps are attracting investment. The U card RedotPay received a $47 million strategic investment, investment company Finary completed a $29.4 million Series A, and self-custody company Bron secured a $15 million seed round. These projects are lowering the threshold for users to use cryptocurrency, paving the way for the next wave of user growth.
DeFi: Steady Recovery
DeFi showed steady performance in this funding round, raising a total of approximately $74 million. However, compared to the prediction markets and payments sectors, the scale of individual financings was significantly smaller. Decentralized exchange Flying Tulip became the funding champion among pure DeFi projects with a $20 million seed round. Lighter secured $68 million, and Jito received a $50 million strategic investment. The 2025 funding data reflects a more cautious valuation attitude from VCs towards the DeFi sector. According to The Block's data, the DeFi sector completed over 530 financings in 2024; 2025 has clearly not reached that scale.
