A study by venture capital firm Lattice Fund revealed that over 80% of crypto startups that received funding in 2022 continue to operate despite major market collapses and related issues.
Overview of the Lattice Fund Report
According to the October 1st report, Lattice Fund analyzed over 1,200 crypto startups that collectively raised $5 billion in 2022. Of these, 76% managed to launch a product on the mainnet, though 18.5% are no longer active or have shut down.
Top Performers and Underachievers
The Ethereum re-staking protocol Eigenlayer emerged as the most successful among the startups that raised funds in 2022. Only 1.5% of startups found what Lattice dubbed 'Product Market Fit' (PMF), and 12% secured additional rounds of funding. Infrastructure and centralized finance projects proved to be the most successful, while gaming and the metaverse had the highest failure rates. CITE_W_A: 'Chasing narratives can get you rekt,' said Lattice co-founder Regan Bozman.
Challenges Ahead for 2022 Startups
Data shows that Ethereum remains the preferred layer-1 ecosystem for new projects, while Bitcoin-based projects showed the highest resilience to failure. 26% of Solana-based projects failed to make it to 2024, while all 18 Bitcoin-based projects remain active. Another challenge includes the increasing number of new startups and a tighter token launch market, which makes it harder for teams to reward their investors. CITE_W_A: 'This highlights that returns come not from chasing what is hot right now but from asking what will be hot in 1-2 years,' wrote the report.
Despite the success of the 2022 cohort, they still face significant challenges, such as a lack of retail investor participation and a tough environment for new projects.
