They're like those kids at school who shot from nobodies to prom king and queen overnight. How did they pull it off?

You might think they cooked up an idea so unique it would blow Einstein's mind, or maybe they had a team of coders who could out-code anyone at Google. Nope, neither.

Their secret? They've got some serious financial muscle behind them. We're talking about Venture Capitalists, or as the cool kids call them, "VCs".

Polygon (MATIC) was backed by none other than a16z and Coinbase Venture. And not to be outdone, Solana (SOL) also got a slice of the a16z pie, with a side helping from Polychain Capital.

But these big-shot VCs aren't just throwing money at them. They're giving them hands-on help with development, and they're also masters at getting the word out there.

In fact, a16z has such a rockstar reputation that as soon as they get involved in an investment round, all the other investors are falling over themselves to get in on the action.

So, where are they investing now? Where are the next SOLs and MATICs?

TLDR 📃

• SOL and MATIC? They didn't just happen; they were turbo-boosted by the mighty Venture Capitalists (VCs) like a16z and Coinbase Ventures.
• VCs right now? They're splashing the cash across the crypto scene, but they're particularly jazzed about infrastructure – we're talking cross-chain communication, wallets, staking services, and decentralized data storage.
• Sectors to stalk? Eyes on the Base Layers and Infrastructure. They're the VCs' darlings, and market trends are saying, "Yup, makes sense."
• The new kids on the block? Check out Scroll and BeraChain for Base Layers, LayerZero and Eigenlayer for Infrastructure. These are the projects with VC swagger. Oh, and keep your tabs open for Metaverse and Web3. Some noteworthy bets are being placed there too.
• Market shivers? VCs couldn't care less. They're playing the long game and throwing their dollars at sectors with juicy long-term potential in crypto.
• Next crypto superstar? Keep a keen eye on these projects. When they roll out their tokens, you might just spot the next SOL or MATIC in the making.

Disclaimer: Not financial nor investment advice. Any capital-related decisions you make are your responsibility and yours only.

Following the money 💵

Alright, let's cut to the chase. We've been digging deep into where institutional (VC) investments are pouring their funds in the crypto world, and boy, they're spreading their bets wide.

We're talking about the underappreciated, yet money-making, platforms for cross-chain communication, wallets, staking services, and decentralised data storage.

Sure, they're also injecting funds into the metaverse, DeFi, Web3, and CeFi, but let's zero in on what really matters 👇🏼

[caption id="attachment_274715" align="alignnone" width="1800"] What you really need to keep your eye on is the average check size per sector (last row). A larger number means VCs are betting big on that sector and are likely to pump in more resources, like marketing.[/caption]

So, with the full scenario laid out, we see that Base Layers and Infrastructure are the sectors to watch. This fits perfectly with our expectations of market trends and growth trajectories (read our detailed multi-year investment thesis for a peek at which sectors are set to soar when).

The VCs to follow 💳

There are hundreds, if not thousands of VCs, but it doesn’t mean they’re all skilled. Here, we've rounded up the big hitters - the ones whose returns would make your jaw drop.

So, when these names pop up in conversation, take note - they're not just playing the game; they're dominating it.

The Base Layers to watch ⛓️

Base Layers? Yes, these refer to any L0 (like Polkadot), L1 (like Solana) or L2 (like Arbitrum).

The biggest upcoming two with VC backing?

Note: these projects do not have tokens yet, but they all will soon, and you’ll want to be ready, aware and decisive when that time comes.

Scroll 📜

VC investment: $50,000,000

VCs involved: Polychain Capital, Sequoia China, Bain Capital Crypto, Moore Capital Management, Variant Fund, Newman Capital, IOSG Ventures and Qiming Venture Partners.

So, what's Scroll's mission? It's all about supercharging Ethereum's scalability with a layer 2 solution. The result? Users can enjoy speedy, budget-friendly transactions, all while keeping Ethereum's high-security standards intact.

Scroll isn't your run-of-the-mill scaling solution, though. It boasts a unique setup known as zkEVM, reminiscent of the zkSync Era. But here's where it stands out: unlike other solutions such as Arbitrum or Optimism, Scroll packs a more advanced form of rollup. It's based on zero-knowledge (ZK) proofs, giving it a serious security boost.

Another ace up Scroll's sleeve is its dedication to developing an EVM that mimics the Ethereum Virtual Machine to a T - a feat neither ZkSync nor Polygon can claim.

Keep up with their latest updates here.

BeraChain 🐻

VC investment: $42,000,000

VCs involved: Polychain Capital, Hack VC, dao5, Tribe Capital, Shima Capital, CitizenX and Robot Ventures.

It's set on creating the best space for DeFi projects to kick off. The twist? BeraChain ditches the traditional proof of stake model for an innovative "Proof of Liquidity" approach. This allows users to stake big names like ETH and BTC without using a native token.

Better yet, users can stake assets and simultaneously use them for on-chain activities. This clever mechanism ramps up capital efficiency, making your assets work smarter.

Keep tabs on BeraChain's progress here.

The infrastructure plays 🪜

LayerZero

VC investment: $120,000,000

VCs involved: a16z, Circle Ventures, Sequoia Capital and Samsung Next and OpenSea Ventures.

Their mission? To create a platform that makes transferring funds between blockchains as easy as pie and fosters seamless communication across different blockchains.

We've been fans of their potential for quite a while now, even featuring them on a podcast - give it a listen here.

Keep up with their latest developments here.

Eigenlayer

VC investment: $50,000,000

VCs involved: Electric Capital, Polychain Capital, Hack VC, Finality Capital Partners, and Coinbase Ventures.

Their solution? They're all about maximizing users' returns on staked ETH. How? By letting users lend their ETH to beef up the security of other networks and infrastructure, offering them an extra yield. This not only puts more money in users' pockets but also makes it easier for new networks to find stakers ready to contribute to their security.

Stay on top of their latest updates here.

Other notable investments 💰

CCP | Metaverse 🎮

VC investment: $40,000,000

VCs involved: a16z, Makers Fund, Bitkraft, Kingsway Capital, Nexon, and Hashed.

This project is crafting a triple-A game that goes all-in on blockchain technology.

Ever wished for true ownership of your epic in-game loot? This project is here to grant your wish. Expect secure data storage and real ownership of your digital treasures.

Remember the creators of Eve Online, the mammoth game with 9 million users? They're the brains behind this venture too! And this game is not just any game — it's a new addition to the Eve universe. Imagine the potential player rush!

Stay up-to-date with their progress here.

Towns | Web3 🏚️

VC investment: $25,000,000

VCs involved: a16z

Towns aims to establish a decentralised social platform. Imagine a space where you can chat freely without relying on a central company for data storage. It's like having your own digital town square, where the rules are yours to set, and your data remains yours alone.

Keep track of their latest developments here.

Cryptonary’s take 🧠

Even with the market hitting the brakes recently, VCs are still splashing the cash big time. They're all about playing the long game, speculating on which sectors will hit the jackpot and going all-in on those. Right now, their money is on base layers and infrastructure solutions.

Want some inside scoop? We placed our bets on layer-2s (like ARB) and liquid staking derivatives (like LDO) as the standout performers in the next bull run. Trust us, Cryptonary can dish out more insider tips than any VC out there.

Bear in mind VCs are privy to private investment rounds that we ordinary people can't join. But don't fret. These projects will soon have tokens up for grabs, and when they do, they're likely to shine bright on the performance charts (just a prediction, not financial advice!).

Action points 📝

1. Dive deeper into how the crypto market's set to evolve. Check out our multi-year thesis here for a detailed look.
2. Want a bird's eye view of all the VC crypto investments? DeFillama's got you covered with an up-to-date dashboard here.
3. For a more real-time insider perspective, why not follow the smartest investors' moves? Our Smart Money Series takes you one step closer to the action, showcasing on-chain activities of top-performing wallets (they’re smarter than the VCs 👀).