The report states that Ethereum hosts the most dominant Web3 ecosystem
Avalanche, Polkadot also emerging as popular blockchains
DeFi startups are growing in number
The fusion of AI and crypto is giving rise to a promising new category of Web3 startups
Photo Credit: Reuters
The crypto sector is undergoing a regulatory revamp in several parts of the world, aiming to make the industry safer for its members. Countries that have initiated these frameworks are seeing a spike in the number of Web3 startups, bringing business and opportunities to their citizens. A recent report by blockchain startup accelerator Alliance has claimed that Europe, Asia, and North America have registered significant expansion in their Web3 startup ecosystems.
Europe has deployed a comprehensive set of regulations called the MiCA framework to oversee the crypto sector within its region. In Asia, countries like India, South Korea, and Japan are accelerating efforts to implement laws that bring more transparency to the operations of crypto-related businesses. North American regions like El Salvador, where BTC is legal tender, are also supporting startups with their pro-crypto approach.
“Overall, North America, Europe, and Asia continue to be the big three, with each region contributing 1/4 to a 1/3 of all startups,” Alliance said in its report.
In the US and Canada, however, the winds are blowing the other way.
“In H1 2024 we saw the lowest percent ever of startups from the US and Canada. This is likely due to the regulatory uncertainty in the US and crypto gaining real-world adoption in emerging markets,” the report noted.
More Trends Observed
Startups merging AI and crypto have emerged as a budding category of Web3 startups, garnering interest from potential founders. These kinds of startups have been linked to the NFT sector, the report said.
In addition, Web3 projects exploring Decentralised Finance (DeFi) are also growing despite “little public excitement.”
The report showed that Web3 projects are also rapidly exploring use cases in social, payments, and decentralised autonomous organisations (DAOs).
According to the findings, 30 percent of founders initiating Web3 startups have had work experience in big tech companies. Alliance categorises ‘big tech' firms as those that are part of the S&P500 group. The findings further said that about only 1/10 founders in Web3 have had experience setting up companies before, which indicates that tech professionals looking to venture into entrepreneurship are showing an interest in exploring opportunities in Web3.
Blockchain, cryptocurrency, NFTs, and the metaverse comprise a suite of technologies that make up the Web3 sector.
The report presented another insight, claiming that 39 percent of all Web3 startups have two founders, and less than 40 percent are founded by solo founders.
“Among startups with two or more cofounders, about half split their equity equally, and half split unequally. Close to 3/4 of startups work fully remotely,” the report noted.
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