NODO Weekly: Later-Stage VC, DeFi Bets, and DeSci’s $100B Prize

This week’s issue dives into crypto’s shifting capital landscape. I examine why later-stage startups are winning more VC money, where sector allocations are pointing, and how DeSci is unlocking serious economic potential, if privacy can be solved.

1. Crypto VC in Q1

For the first time since 2020, later-stage crypto startups attracted more venture capital than early-stage ones, accounting for 65% of all crypto VC funding in Q1 2025, according to Galaxy’s latest report.

And even if you exclude MGX’s $2B investment in Binance, the trend still holds. This isn’t a one-off anomaly—it’s a clear signal. Investors are starting to favor traction over promise.

Capital is now flowing toward projects with real users, functioning products, and sustainable revenue, not speculative ideas with nothing shipped. It’s a notable shift in how crypto VCs are evaluating risk and return.

The days of “spray and pray” seed rounds may be fading, giving way to a more focused, growth-oriented cycle. This isn’t just a change in mood—it’s a signal that crypto venture funding is maturing.

For founders, the takeaway is simple: build real value, or risk getting left behind.

In Q1 2025, crypto startups raised $4.9B across 446 deals—the highest total since Q3 2022.

But zoom in, and the picture changes. More than 40% of that funding came from a single $2B investment by MGX, a UAE-linked sovereign fund, into Binance.

Remove that outlier, and the quarter’s total falls to just $2.8B—a 20% drop from Q4 2024 and one of the lowest funding quarters in the last four years.

So while it might look like VC activity is bouncing back, the recovery is far from widespread. Most of the momentum is still driven by a handful of large, strategic deals.

The takeaway is don’t stop at the headlines. Track where the capital is going—and who’s actually writing the biggest checks.

2. Where the Money Went

A closer look at how venture capital flowed across crypto sectors in Q1 2025 reveals where investor attention is truly concentrated.

The Trading, Exchange, Investing, and Lending category brought in the most funding—$2.55 billion, accounting for nearly 48% of total capital raised. But that headline number is skewed by a single $2 billion deal: MGX’s investment in Binance.

Adjusting for that outlier, DeFi emerges as the real frontrunner, attracting $763 million in funding. Infrastructure wasn’t far behind, pulling in $506 million. These figures offer a clearer view of where capital is flowing—and which sectors are commanding real conviction from investors.

When looking at deal count rather than capital raised, a different trend emerges.

Projects in the Web3, NFT, DAO, Metaverse, and Gaming category saw the most activity, leading with 73 deals—about 16% of all funding rounds in Q1 2025. Close behind were Trading, Exchange, Investing, and Lending companies, which completed 62 deals during the quarter.

Interestingly, some categories—like Trading, AI, and Payments/Rewards—saw a rise in deal volume compared to previous quarters. Meanwhile, the Web3 space continued its multi-quarter decline in deal count, signaling shifting investor priorities even as headline activity remains high.

3. $100B+ Revenue Opportunity

“Follow the money” isn’t just a saying—it’s the sharpest way to understand where DeSci is really going.

While much of the focus has been on how DeSci reinvents research funding, the bigger opportunity lies in what happens after a discovery is made.

Two major revenue streams are beginning to take shape:

• IP Licensing — a $37.5B annual market, growing at 7%, where research teams can license their discoveries to pharmaceutical and biotech firms.

• Health Data Marketplaces — a $61B market growing at 19%, enabling patients to monetize their medical data directly.

Together, these channels position DeSci as more than a funding experiment—it’s a path to unlock serious economic value from scientific breakthroughs.

But here’s the challenge: these markets are extremely privacy-sensitive, and most blockchains aren’t built to protect sensitive information.

That’s where Nillion enters the picture. It enables blind computation, allowing data to be processed without ever revealing the underlying information.

When combined with Monad for governance and payments, it forms a compelling DeSci stack:

• Secure data handling

• Compliant monetization

• A new economic infrastructure for scientific collaboration

DeSci isn’t just an idealistic movement anymore—it’s laying the rails for real, revenue-generating applications.

Written by Pascal Abams — Research Analyst at NODO. I research on-chain trends, market narratives, and investment opportunities in crypto. If you have thoughts, insights, or just want to connect, reach out.

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