Valuations of crypto projects have fluctuated in the past year. Companies such as LayerZero and Ledger have recently raised rounds that valued each company at multi-billion dollar amounts. LayerZero’s $120 million fundraise, led by a16z and Sequoia Capital, tripled their businesses’ valuation to $3 billion. At the same time, a report by advisory firm Architect Partners found that median seed and early-stage crypto valuations dropped 36 and 30 percent respectively from first to fourth quarter of 2022.

The successful raises come after several downward shifts in the space. Last May, the implosion of Terra’s algorithmic stablecoin likely caused a decline in funding that was furthered by the bankruptcy of crypto exchange FTX in November. Steve Payne, a partner at Architect Partners, suggested that such high-fly valuations in the past were “irresponsible.” Yet at the same time, he highlighted LayerZero as an “outlier”, saying the three-fold value jump was due to increased usage of the platform.

LayerZero is a protocol that connects legacy and next generation digital assets. It was specifically created to make it easier to access major blockchain platforms. Perhaps this is why venture capital giant a16z and Sequoia Capital had faith in investing in the $120 million round. Commenting on the move, Ali Yahya, a general partner at a16z, noted that “there is no longer any question that the future of crypto and web3 is multi-chain” and suggested that LayerZero was handling more transactions than the native blockchain infrastructure.

It’s also notable that at the same time, hardware wallet company Ledger raised $109 million, valuing them at around $1.4 billion. This was similar to the value from their 2021 fundraise and comparatively insulated from the market changes.

The bigger picture? Ilya Volkov, CEO and co-founder of fintech platform YouHodler believes we will soon witness more mega-valuation companies, particularly those integrating crypto into traditional finance, or those utilizing the technology for “common, everyday use cases”.

Overall, while crypto valuations were trending downwards in the past year, there is still potential for huge new investments. The recent fundraises by LayerZero and Ledger are evidence of this, as they have been valued at multi-billion levels. What’s more, with major venture capital firms on board, the confidence of traders in the digital asset space is revitalized. It’s clear that the future of crypto is here.



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