The graduates emerging from Alliance DAO serve as significant barometers for the levels of enthusiasm investors have, as well as trends in user acceptance, within the cryptocurrency ecosystem. The most recent group from the stage-agnostic cryptocurrency accelerator, revealed today, arrives at a time when the market is experiencing heightened anticipation for its recovery.
Merely two months prior, Bitcoin soared to unprecedented heights; albeit experiencing a decrease in value thereafter, the premier cryptocurrency has managed to maintain trading figures significantly elevated than those seen during the downturn that ensued after the collapse of FTX in late 2022. Venture capitalists have taken notice and are actively channeling investments into web3 startups, propelling the total investment in the sector to an approximate $1.9 billion in Q1, marking an impressive 58% increase from the previous quarter, based on data from Crunchbase.
The resurgence of optimism among aficionados of web3 is demonstrated by expressions such as “we are so back” dominating discourse on crypto X/Twitter platforms. Meanwhile, the rigor of regulatory actions aimed at the sector remains unabated in the U.S., with Changpeng “CZ” Zhao, the Canadian founder of Binance, positioned to become the wealthiest individual to potentially face incarceration. Concurrently, Uniswap, known for its decentralized finance ethos, received formal notice from the U.S. Securities and Exchange Commission (SEC) last month.
The constant regulatory clampdowns in the U.S. unmistakenly influence the demographic composition of Alliance DAO’s participants.
According to Qiao Wang, a founding partner of Alliance DAO, founders from North America constituted 45% of the applicants in H2 2021; this percentage has reduced to a mere 26% in the first half of this year.
Wang, in communication with TechCrunch, pointed out, “The U.S. is observing a trend of relinquishing its market share of crypto founders over the past three years, chiefly because of 1) stringent regulations and 2) the growing traction of crypto projects in emerging markets.”
Interestingly, the accelerator is witnessing an increase in interest from Asia, which accounted for 24% of all applications in the first half of 2024, a noticeable rise from 14% in the latter half of 2021.
The diminishing involvement of North America in Alliance DAO does not signify that founders are giving up on their crypto aspirations. History shows that web3 entrepreneurs are an adaptable and migratory group, evading regulatory pressures and gravitating towards regions with a more welcoming attitude towards crypto. Consequently, some may establish physical operations in these emerging markets to capitalize on a friendlier crypto ecosystem.
As reported by TechCrunch, Asia has emerged as a hotbed for crypto entrepreneurs. The region boasts a large, youthful demographic eagerly embracing new technological and financial concepts. Notably, Hong Kong, Japan, and Singapore have been proactive in crafting clearer regulatory frameworks for the nascent industry, offering a semblance of stability to founders amidst the prevailing policy uncertainties in other regions.
Meet the batch
The twelfth run of Alliance DAO’s three-month program saw an overwhelming 1,503 applications, a steep increase from the previous cohort’s 1,083 applications. This round, only 21 teams made the cut, highlighting a stringent acceptance rate of 1.4%. Twelve of these teams are showcasing their innovations at today’s demonstration event.
The spotlight continues to shine on projects developing on Ethereum, the blockchain with the highest developer activity, although interest is resurging in other ecosystems such as Solana and Bitcoin, as observed by Wang. Prominent themes across this batch encompass decentralized AI, crypto infrastructure (notably, modular blockchain technologies), decentralized finance (DeFi), and crypto-powered payment systems.
Now, breaking down the featured projects:
Company name: Villcaso
Function: Facilitates permissionless investment in U.S. real estate
Founders: Nathaniel Sokoll-Ward, Val Lee
Proposition: REITs exist to lower the barriers to real estate investments by offering fractional ownership. While they provide more liquidity than direct property investments, they largely remain inaccessible to the global market, which is increasingly interested in the U.S. real estate sector. Utilizing a legally compliant, permissionless token, Villcaso aims to expand and distribute fractional ownership in U.S. properties to a worldwide audience. The firm holds minor equity stakes in numerous homes across the United States.
Stage: Initiating seed funding round
Company name: GoBankless
Function: Streamlining cross-border payments with stablecoins, akin to Transferwise
Founders: Ygor Francisco, Khayalethu Mtshali
Proposition: GoBankless targets the burgeoning market for cross-border payments in Africa, where businesses have been hampered by the protracted processing times and hefty fees associated with traditional banking systems or the risks of alternate markets resisting SWIFT’s dominance. Employing stablecoins, this startup is determined to make cross-border transactions instant and exclude banking middlemen. Serving approximately 50 small enterprises across Mozambique and South Africa, GoBankless processes monthly settlements worth $7 million.
Stage: Seeking seed investment
Company name: Wasabi Protocol
Function: Facilitating leverage trading through a protocol
Founders: Eren Derman, Kemal Hasan Atay
Proposition: The realm of crypto trading, particularly the trading of new assets like memecoins and NFTs, has experienced a surge in daily transaction volumes. While platforms like Aevo and Hyperliquid facilitate early access, their efficiency is contingent on ample market liquidity, causing potential missed opportunities. Wasabi addresses this challenge by underpinning user positions with the actual assets, unlike its competitors that rely on algorithmic approaches. Since its launch a few months back, Wasabi’s total value locked (TVL) has escalated to $60 million, with over $200 million in transaction volumes.
Stage: Completed seed round; seeking strategic investments
Company name: Lulubit
Function: Akin to Coinbase, targeted towards Central America
Founders: Ianir Sonis, Diego Hernan Cabrera, Alan Futerman
Proposition: Central America is quickly adopting crypto, yet the region faces significant hurdles in simple buy and sell transactions. Peer-to-peer networks lack reliability, whereas traditional exchanges impose steep fees. Lulubit bridges this gap by enabling Central American retail users to transact crypto directly from their local banks and utilize a crypto debit card for payments. Additionally, users can send remittances via the blockchain to Lulubit and convert them back to local currency at competitive rates. With a launch less than a year ago, Lulubit boasts over 18,000 users and processed over $1.3 million in transactions in April alone, showing a month-over-month growth of 36%.
Stage: On the lookout for seed funding
Company name: ZwapX
Function: Creating a market for tokenized luxury watches
Founders: Yohan Chiovetta, Noah Chiovetta, Rocco Di Capua
Proposition: The luxury watch market, valued in the billions, has yet to fully embrace technological advancements. Peer-to-peer exchanges are plagued by scams, and online platforms grapple with the challenges of verifying authenticity. ZwapX introduces a novel method for users to trade tangible watches in the guise of tokens that represent both ownership and authenticity. To date, it has tokenized 44 watches with a total value locked (TVL) of $1.4 million and a trading volume of $240,000.
Stage: In search of seed funding
Company name: Fractal Payments
Function: Facilitating cross-border payments for global enterprises
Founders: Pavel Skalin
Proposition:: The global business money movement sector, despite being one of the largest industries, continues to suffer from high fees and slow transaction processing. Fractal Payments is setting out to challenge SWIFT using stablecoins, asserting that it can process cross-border payments three times more cost-effectively and six times faster compared to traditional banking channels. Already licensed within the European Union, the startup has overseen over $5 million in payment transactions and collaborates with a partner network facilitating payments in more than 60 countries.
Stage: Seeking seed funding
Company name: Código
Function: Supplying crypto data for AI model training
Founders: Jean-Philippe Emelie Marcos, Diego Besprosvan, Jaziel Guerrero
Proposition:: With the billion-dollar AI training data market poised for growth, there is an opportunity for new entrants focusing on Web 3.0 applications. Código steps in to offer highly refined datasets crucial for training specialized models for critical crypto applications, including financial transactions. Leveraging automated crowdsourcing to gather data, which then undergoes a decentralized review and augmentation process (with reviewers earning tokens), Código has generated 4,000 decentralized apps and 4 million lines of code in just six months.
Stage: Actively seeking seed investment
Company name: Accrue
Function: Developing a stablecoin-based payment network for Africa
Founders: Clinton Mbah, Adesuwa Omoruyi
Proposition:: With the notorious issues of high costs and slow processing for bank transfers in Africa, Accrue is on a mission to establish a payment network that delivers instant, low-cost transactions via stablecoins. The startup is leveraging the widespread network of mobile tellers on the continent, enabling users to execute bank transactions via mobile phones, often through simple text messages. Accrue promises these mobile tellers higher profit shares and an upcoming token, positioning itself as a cash-flow positive entity with $5 million processed in payments.
Stage: Searching for seed funding
Company name: Fig Investments
Function: Tokenizing hedge fund strategies
Founders: Guanzhi Ma, Tony Qian
Proposition:: Amidst the surge in interest from the traditional finance (TradFi) sector towards decentralized finance (DeFi) offerings, as evidenced by moves like BlackRock’s tokenization of stocks, Fig emerges. Founded by veterans from the banking sector, Fig introduces an automated trading platform bridging the gap between TradFi’s interest in crypto and on-chain liquidity providers (LPs) seeking returns. Claiming a performance metric ten times that of its closest competitor, Fig has, since its inception four months ago, escalated its total value locked (TVL) to $10 million, with an additional $40 million in impending transactions.
Stage: In pursuit of seed funding
Company name: 0G
Function: Advancing a modular AI blockchain framework
Founders: Michael Heinrich, TechArena.au
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