Analysis of industry trends in the first half of 2024: Ethereum still dominates, and Asian and African startups hit a new high

Original author: @QwQiao @xyczzcyx

Compiled by: TechFlow

At @alliancedao , we receive around 3,000 applications per year to join our crypto startup accelerator. We collect data such as the blockchain they use, product type, and geographic location. Because of the large sample size and our neutrality to these factors, we are able to gain unique insights into how the industry is trending.

Blockchain

Layer 1

Ethereum remains the dominant ecosystem. However, Solana is recovering after bottoming out in the second half of 2022, which may be related to the collapse of FTX in the same period. Bitcoin is experiencing a resurgence amid the craze for ordinarys, runes, and Bitcoin L2 technology.

Changes in L1 share over time

L1 share in the first half of 2024

Ethereum Layer 2

Focus on Ethereum L2 (and sidechains). Over the past 3 years, Optimistic rollups have gradually gained more attention. Notably, in the first half of 2024, Base accounted for more than a quarter of startups built on Ethereum L2.

Changes in L2 over time

Product Trends

An increasing number of startups are focusing on infrastructure, DeFi, payments, and the combination of AI and cryptocurrencies, often at the expense of NFTs. In these areas, the development of infrastructure and AI is consistent with the trend of public discussion. However, the rise of DeFi and payments may surprise many people because there is hardly much public attention on them. Coincidentally, we believe that these two areas are also one of the few verticals in which cryptocurrencies have found clear product-market fit (PMF).

Changes in product share over time

Product share in the first half of 2024

Note that this is an imperfect way to categorize products, as these categories are not mutually exclusive. For example, a startup may operate in both the gaming and NFT space, in which case we would assign a weight of 0.5 to both gaming and NFT.

Geographical distribution

In the first half of 2024, we see a record low percentage of startups from the US and Canada, and a record high percentage of startups from Asia and Africa. This is likely due to 1) increased regulatory uncertainty in the US, and 2) increased real-world adoption of cryptocurrencies in emerging markets.

Overall, North America, Europe and Asia remain the three major regions, each contributing 1/4 to 1/3 of all startups.

Geographical changes over time

Geographical distribution in the first half of 2024

What starts here may be more appealing to founders and VCs. If you are one of them, keep reading.

Founder Background

Big Tech

The percentage of founders with a Big Tech background peaked in 2021 and is currently at 30%. We define Big Tech as the tech companies in the SP 500. The exact definition is not important; what matters is the trend over time.

Percentage of founders with a background in large technology companies over time

Proportion of founders from large technology companies in the first half of 2024

Top universities

Likewise, the percentage of founders graduating from top universities peaked in 2021. We define top universities as the QS world’s top 100 universities.

Percentage of founders graduating from top schools over time

Proportion of founders graduating from top universities in the first half of 2024

Repeat founder

About 1 in 10 founders had previously founded a startup.

Repeat founder

Team Composition

Team size

More than half of startups have a team size between 2 and 5 people. We believe this is the optimal size for pre-market fit (PMF) startups.

Team size

Number of co-founders

Less than 40% of startups are founded by a single founder. For reference, various studies show that 20-30% of unicorns were founded by a single founder.

Number of founders

Equity Distribution

Among startups with two or more co-founders, about half split the equity equally, while the other half do not.

Equity Distribution

Remote work

Nearly three-quarters of startups adopt a completely remote work model.

Remote work

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