Blockwall's Year in Review - 2024
Dear Founders, Investors, and Friends,
As 2024 comes to an end and the holiday season approaches, we want to express our heartfelt gratitude to all our investors, founders, partners, and our overall community for your continued trust and support.
We want to thank you for being an integral part of our journey, making our success possible and we look forward to continuing our relationship in the coming year and beyond.
We wish you a joyous, safe holiday season and a happy and healthy New Year!
That said, we’d like to take this opportunity to revisit this year's most important developments, as 2024 was not only one of the most transformative years for crypto and digital assets but also one of the most pivotal for us at Blockwall.
2024 – A Year of Two Tales
The first half of 2024 was marked by an aggressive regulatory stance in the United States. High-profile enforcement actions by the SEC against leading crypto companies cast a shadow over the industry, forcing innovation offshore and raising uncertainty.
But the tide began to shift mid-year, driven by a convergence of political, legislative, and market forces.
Donald Trump’s election campaign introduced a dramatic pro-crypto narrative, promising to end the "unlawful crypto crackdown".
This rhetoric, combined with unprecedented lobbying efforts by the crypto industry – totaling $197 million in targeted contributions – led to significant progress.
Congress discussed and voted on pivotal legislation, including FIT21 and the repeal of SAB 121. Additionally, the SEC approved ETH spot ETFs, a move that surprised many analysts and experts.
Looking ahead, the new U.S. administration is expected to usher in what many are calling a "golden era" for crypto regulation. A crypto-friendly SEC chair and clearer legislative standards could open doors for institutional adoption, provide clarity for innovators, and strengthen the U.S. position in crypto.
But what does this mean for Europe?
Europe is poised for its own transformation.
The long-anticipated Markets in Crypto-Assets (MiCA) regulation takes effect on December 30, 2024, providing the first comprehensive framework for crypto assets in the EU.
This landmark legislation will establish uniform rules across member states, with the goal of encouraging innovation while ensuring investor protection.
With MiCA, Europe is likely to become a fertile ground for regulated growth in crypto. We anticipate increased institutional participation and a more vibrant ecosystem driven by collaboration between startups, regulators, and financial institutions.
Going forward, it will be fascinating to watch how Europe's approach compares to the evolving landscape in the U.S.
The Digital Asset Space and Infrastructure Matures
Beyond regulation, the launch of Bitcoin Spot ETFs – with inflows exceeding $37 billion in their first year – marked the most successful ETF debut in history.
This underscores the growing acceptance of digital assets among traditional financial institutions and paves the way for further institutionalization of the space in the coming years.
Technological innovation continued to drive growth, with highly scalable networks like Solana and Sui, along with Layer-2 solutions, experiencing a meteoric rise in usage.
New rollups and the adoption of Ethereum’s Dencun upgrade drastically reduced transaction costs in the Ethereum ecosystem, propelling user activity to record levels. Base, Coinbase’s Layer-2 network, emerged as a standout performer, demonstrating the potential of tightly integrated ecosystems to capture value and scale rapidly.
With numerous high-throughput networks set to launch next year, blockspace costs are expected to decline further, accelerating this growth.
The Convergence of Decentralized and Traditional Finance
DeFi rebounded strongly, evolving into a more mature and resilient sector.
Protocols with sustainable cash flows, the launch of innovative platforms like EigenLayer and Ethena, and the seamless integration of DeFi into consumer-facing financial products and traditional fintech solutions reaffirmed the sector’s potential to disrupt traditional finance.
Stablecoins solidified their position as blockchain's “killer use case,” with global adoption reaching unprecedented levels.
Their use in emerging markets as a reliable store of value and medium of exchange and the increased efforts of major players like Visa and Stripe in the space highlighted their transformative potential in bridging traditional and digital economies.
The trend is clear: the old and new financial worlds are converging, with crypto infrastructure slowly but surely establishing itself as the backbone of the emerging financial system.
If you're looking for a deeper dive into this year's developments in the crypto industry and what lies ahead in 2025, I highly recommend checking out the recent reports from Messari and Coinbase. As always, they offer excellent overviews and valuable insights.
Research Highlights
Building on last year’s efforts, we once again published our own research and shared more insights about our investments this year.
Some Highlights include…
- Applying Metcalfe’s Law to a Valuation of the Urbit Network
- Zero Knowledge Proofs: Empowering the Future of Data Privacy and Scalable Infrastructure
- Open Capital Market on Crypto Rails and Why We Invested in Spiko
- An Overview of Staking
- Introduction to Fully Homomorphic Encryption (FHE): What It Is and Why It Matters
- Bringing Securitization Into the Digital Age: Why We Invested in Tranched
Reflections on Our Growth in 2024
This year has been a transformative one for Blockwall. Internally, we focused on professionalizing and optimizing our operations, which resulted in significant progress. We streamlined processes in deal screening, portfolio management, and internal communication. These changes helped us screen over 2,100 deals this year – a 30% increase compared to 2023 – while maintaining a high standard of quality in our evaluations.
From an investment perspective, Fund I continued to demonstrate its strength, achieving a 4x net DPI for investors and a 43.2% net IRR. This performance places it in the top 5% benchmark globally by Cambridge Associates, a result we are especially proud of as it validates our long-term, thesis-driven approach. At the same time our Fund II has now made 16 investments and is showing the first positive follow-on investment cases in 2024.
Investments We Made
This year, we concluded seven investments, including six new additions to our portfolio and one follow-on investment:
- Spherity: Provides secure and verifiable digital identity solutions for regulated industries, enhancing trust and compliance in digital ecosystems. See here on why we invested.
- Tlon: Develops Urbit, a decentralized personal server platform aiming to redefine digital identity and data ownership for users and a new communication tool with the vision to evolve into a social OS.
- Nilos: Offers a global payment infrastructure that unifies crypto and fiat treasuries, streamlining cross-border transactions for businesses.
- Tranched: Provides real-time on-chain securitization, enabling fintech lenders and professional investors to launch institutional-grade transactions more efficiently. See here on why we invested.
- River: An in-person event and social platform that helps brands organize community events at scale, turning online audiences into real-life communities. See here on why we invested.
- Byzantine Finance: Provides a decentralized protocol for creating custom restaking strategy vaults, enabling permissionless cross-protocol restaking with enhanced security and optimized returns.
- Validation Cloud (follow-on investment): Delivers high-performance Web3 infrastructure solutions, including node and staking services, enabling fast, scalable, and intelligent connectivity to blockchain networks. See here on why we invested.
Rebranding
2024 also marked a milestone in how we present ourselves to the world. We launched our first major rebranding, aligning our messaging and identity across funds.
As part of this rebranding, we also released the updated Blockwall Thesis 3.0, which captures our investment philosophy and reinforces our commitment to supporting the infrastructure and applications driving the next phase of the digital economy while at the same time doubling down on our venture capital approach.
So, the rebrand wasn’t just a cosmetic change; it clarified how we communicate our mission to investors, founders, and the broader ecosystem. The positive feedback from our community confirmed that this step was both timely and necessary.
Blockwall Investor Summit
A major highlight of the year was our investor summit in Frankfurt, where we brought together an incredible group of investors, founders, and industry leaders.
The summit was a platform for deep discussions about Web3, crypto, and the future of the internet, and it sparked meaningful conversations about where the industry is headed.
There, we discussed the following topics:
- Venture Capital in Web3 – with Amos Meiri from Node.Capital, Mathijs van Esch from Maven 11, and Ivan de Lastours from Bpifrance
- How will Web3 shape the Future of Finance? – with Ambre Soubiran from Kaiko, Valerio Cicco from Banca Sella, and Michael Elalouf from Tranched
- Why Privacy and Security Matter? – with Anthony Day from IOHK, Kurt Hemecker from the Mina Foundation, and Dr. Jones Groß from the Digital Euro Association
- Exploring the Future Web’s Interface Layer – with Jens Hilgers from BITKRAFT, Prof. Dr. Wolfgang Prinz from Frauenhofer FIT, and Dr. Jürgen Sturm from ZF Friedrichshafen AG
- Is Crypto the Future of Payments? – with Adeoye Ojo from Busha, Axel Cateland from Kulipa, and Alex Nwaka from Validation Cloud
- The On-Chain Financial Revolution – with Mike Silagadze from EtherFi
- Artificial Intelligence and how it will influence our Digital Future – with Sebastian Heinz from statworx & AI HUB Frankfurt
- The Intersection of AI and Web3 – with Illia Polosukhin from NEAR Protocol
The positive feedback from attendees reaffirmed that these events are more than just gatherings – they’re a platform to drive meaningful conversations and strengthen relationships across the industry.
For anyone who couldn't attend: The entire event was recorded and will become available on Blockwall's Substack Channel for rewatching in January.
We will also share the most interesting clips with you on LinkedIn – so stay tuned!
The Road Ahead
2024 was primarily about building, professionalizing, and standardizing our execution engine and deal-screening processes.
In 2025, the focus will shift to scaling—expanding these processes, growing our team, and increasing our impact as a venture capital firm.
The groundwork has been laid, and we’re excited to see how far we can take it.
P.s.: We have an🌟 Exciting Internship Opportunity at Blockwall! 🌟. Please share with someone who might be a great fit. Share this post or tag them in the comments!
Are you passionate about Web3, blockchain, and exploring the world of venture capital? Blockwall, a leading European venture capital firm, is offering a Visiting Investment Analyst internship at our Frankfurt office.
This is an incredible opportunity to gain hands-on experience in venture capital, explore the fast-paced Web3 ecosystem, and develop skills in evaluating investments, market trends, and startup potential.
📍 Location: Frankfurt, Germany (min. 6 months)
📅 Apply Here: Visiting Investment Analyst Application
Whether you’re passionate about investing, startups, or emerging technologies, this role is perfect for ambitious individuals looking to launch their career in a dynamic and cutting-edge industry.
Disclaimer
To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.
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