Crypto Funding Landscape 2025: Deep Tech Rising, Consumer Protocols Evolving
The crypto venture capital landscape has undergone significant transformation over the past 12 months. While overall funding volumes have adjusted from the 2021 peak, investors continue to deploy substantial capital across the ecosystem, albeit with more selective thesis-driven approaches.
Our analysis of 6,109 crypto funding rounds from 2014 through May 2025 reveals several key trends that founders, investors, and ecosystem participants should understand as we move through the second half of 2025.
Where the Money is Going
DeFi and CeFi continue to absorb the lion's share of funding, capturing over $30 billion across 1,306 deals all-time. However, the average ticket size in this sector has decreased from $20.4 million to $10.4 million (excluding two outlier $100M+ rounds), signaling a broader repricing across the ecosystem.
| Rank | Category (group) | Capital raised all time (USD M) | # Deals | Capital raised last 12 mo (USD M) | # Deals |
|---|---|---|---|---|---|
| 1 | DeFi & CeFi | 30,400 | 1,306 | 5,190 | 255 |
| 2 | Web3 Infra & Tools | 18,057 | 837 | 2,164 | 148 |
| 3 | Base Layers & Scaling (L1/L2/rollups) | 13,027 | 345 | 1,408 | 80 |
| 4 | NFT, Gaming & Metaverse | 7,865 | 558 | 598 | 71 |
| 5 | Un-/mis-categorized¹ | 33,613 | 1,954 | 1,256 | 163 |
| 6 | AI, Analytics & Data | 1,820 | 186 | 583 | 75 |
| 7 | Social / Creator platforms | 2,182 | 65 | 1,141 | 21 |
| 8 | Stable-/RW Assets (stablecoins, RWA) | 438 | 40 | 109 | 14 |
| 9 | Security & Audits / MEV | 565 | 43 | 116 | 11 |
| 10 | Wallets / Key mgmt | 234 | 28 | 234 | 7 |
¹Approximately one-third of entries lack proper categorization; many appear to be trading or CeFi-oriented.
Some notable shifts in the last 12 months:
- Social/creator apps have leapt to the #3 position by average check size ($54M) despite only 21 rounds, with Story Protocol's $80M Series B accounting for half of the total.
- Web3 infrastructure remains essential "picks-and-shovels," with investors continuing to back modular execution layers (Monad $225M, Xion $25M) and restaking middleware (Symbiotic $5.8M, Lombard $16M).
- DeFi & CeFi have seen their average check size decrease by 40% compared to 2021 levels, though deal count remains stable.
Deep Tech vs. Consumer Protocols: A Tale of Two Trajectories
When comparing deep tech (AI/quantum) with consumer-oriented protocols (L1s, L2s, apps), we see diverging trajectories:
| Metric | Deep-tech (AI / quantum) | Consumer (L1 + L2 + apps) |
|---|---|---|
| All-time capital | $2.8B across 199 rounds | $21.0B across 1,306 rounds |
| Last 12 months | $1.26B on 83 deals (avg $15.1M) | $2.68B on 279 deals (avg $9.6M) |
| YoY change vs. prior 12 mo | +78% in $ volume | -14% in $ volume |
| 2025 YTD (to May 16) | $383M | $1.17B |
| Largest recent raise | Monad Labs - $225M Series A (modular AI-optimised L1) | Story Protocol - $80M Series B (IP/creator L2) |
AI Momentum is Real
Funding into on-chain AI infrastructure and data has jumped 78% year-over-year. The largest checks have gone to modular AI-first execution layers (Monad) and provable compute networks (Gevulot, Irreducible).
Quantum Remains Niche
The quantum crypto segment remains small, with only $117 million raised across nine funding rounds involving six unique companies:
| Project | Sector | Funding Rounds |
|---|---|---|
| HUB Security | Cyber-security HSMs & quantum-safe key management | • May 2020: $5M Series A |
| HUB Security (cont.) | • Jun 2021: $50M post-IPO equity | |
| Mesh | Institutional payments with PQ-secure rails | • Mar 2025: $82M Series B |
| Post-Quantum | Quantum-safe cryptography middleware | • Mar 2015: $0.9M Seed |
| Post-Quantum (cont.) | • Jul 2016: $10.3M Series A | |
| QANplatform | Quantum-resistant hybrid Layer-1 | • May 2021: $2.1M private sale |
| QANplatform (cont.) | • Dec 2023: $15M private round | |
| Quantum Resistant Ledger | QRL chain using XMSS signatures | • Jan 2017: $2M angel |
| Quantum Temple | NFT marketplace with PQ proofs | • Jan 2023: $2M pre-seed |
Most quantum-focused projects emphasize security-first approaches, with five of the six focusing on post-quantum cryptography, hardware security modules, or quantum-resistant base layers. The pipeline remains sparse and early-stage, with only one post-Series A round since 2021 (Mesh's Series B).
Consumer Stack: Repriced but Resilient
The consumer-facing crypto segment has seen deal count remain flat while average round sizes have decreased approximately 30% from the 2021 peak. More importantly, we're witnessing capital rotation within the consumer space, with social/creator applications and gaming L2s drawing funds away from NFT marketplaces and consumer DeFi.
Underserved Areas and Funding Gaps
Our analysis reveals several thinly funded areas that represent significant opportunities:
| Underserved Area | Current Status | Notable Examples |
|---|---|---|
| Real-world assets (RWA) beyond stablecoins | Only $109M across 14 deals in past year | Florence Finance ($3M), Manifest ($2.5M) |
| Decentralized Physical Infrastructure (DePIN) | No dedicated category tag, fewer than 10 identifiable deals | Nova Labs (Helium) last large raise was 2014 |
| Privacy-preserving compute / ZK services | ZK hardware funded, but consumer privacy wallets and credentials underfunded | Irreducible ($24M), Gevulot ($6M) |
| Verticalized AI + crypto tooling | 75 raises ($7.8M avg) in generic "AI infra"; few for specific verticals | - |
| Reg-tech & compliance rails | Chainalysis-type mega-rounds dried up; little funding for KYC/Travel Rule middleware | - |
| Insurance / risk markets | Only three on-chain cover projects identified since 2021 | Nexus ($2.7M) |
| Consumer on-ramps in emerging markets | Very limited funding activity | CFX Labs ($9.5M), Rain (2021) |
What VCs Are Hunting for in H2 2025
Based on funding patterns and identified gaps, we project VCs will focus on these areas in the second half of 2025:
| Opportunity | Why VCs Care | Expected Check Size |
|---|---|---|
| Composable RWA primitives | High-yield off-chain cash flows, clear regulatory frameworks | $5-30M (Seed-A) |
| DePIN coordination layers | Token-incentivized infrastructure reaching scale; need for dev kits and standardized billing | $7-15M |
| Privacy UX (AA + ZK wallets) | Post-MiCA Europe will require opt-in privacy; consumer apps need it built-in | $5-12M |
| MEV-aware execution environments | L2s focusing on fair ordering and market auctions to prevent "invisible tax" | $10-25M |
| On-chain AI data marketplaces | Explosion of synthetic data needs crypto-native provenance solutions | $8-20M |
| Parametric insurance & risk tranching | Institutional DeFi requires coverage before large deposits move | $5-15M |
| Compliance SDK / Reg-tech | FATF Travel Rule, MiCA push costs onto apps; middleware has no clear leader | $3-10M |
Cross-cutting Opportunities for Deep Tech and Consumer Protocols
Several white spaces stand at the intersection of deep tech and consumer applications:
-
On-chain AI data markets & model verification: AI models need verifiable provenance (deep tech angle) while opening paths to creator royalties and synthetic-media licensing (consumer angle).
-
Quantum-safe key management: Long-horizon LPs worry about quantum breakthroughs, yet solutions at the MPC/HSM layer are scarce. Consumer wallets could market "quantum-resistant" as a trust feature.
-
Privacy-preserving compute: ZK and fully homomorphic encryption face proof compression and hardware acceleration bottlenecks (deep tech), while enabling apps to ship mainstream UX without leaking everything on-chain (consumer).
-
Insurance/risk wrappers: Institutions need coverage before depositing into AI-traded RWA (deep tech), and casual users still lack "Apple Care-like" protection for wallet hacks (consumer).
-
DePIN SDKs: AI inference at the edge is trending, creating demand for token-incentivized GPU/telecom grids with billing/governance rails (deep tech) that can bridge web-scale traffic to consumer L2s.
Key Takeaways for Founders
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Investors haven't pulled back—they've repriced. Average DeFi check size is down 40% vs. 2021, but deal count remains steady.
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Large, thesis-driven rounds are clustering around core infrastructure (Monad, Nexus) and IP/creator economy (Story Protocol, Mocaverse).
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White space exists where regulation or deep tech challenges deter generalist funds: RWA plumbing, insurance, privacy, and reg-tech.
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Having a clear compliance narrative or deep technical moat is the ticket to the next wave of crypto VC funding.
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AI momentum is real, with on-chain AI funding growing 78% year-over-year, while quantum remains a niche but potentially significant frontier.
For founders building in these spaces, the data suggests focusing on clear regulatory compliance narratives for consumer protocols and demonstrating deep technical moats for infrastructure plays. The most successful raises are likely to combine both elements with a convincing go-to-market strategy in underserved verticals.
This analysis is based on a comprehensive dataset of 6,109 crypto funding rounds from 2014 through May 16, 2025.