Page 77 - Cyber Defense eMagazine April 2023

The third quarter of 2022 saw large-scale flocking of VCs toward this technology.

Decentralized finance (DeFi) along with Web3 were the principal targets of the early-stage startup capital
from some of the most prominent private investors in the third quarter of 2022, despite a drop in total
venture capital investments.

Web3 - a phrase used to characterize a hypothetical future phase of the internet - enterprises working
on decentralized software projects in addition to blockchain-based products and services attracted the
most capital during the quarter, with $879 million invested across 24 agreements. Some of the largest
transactions in the industry have been funded, including a $300 million Series B funding for Mysten Labs
and a $200 million Series A funding for Aptos Labs, two innovative blockchain networks that could
challenge existing giants such as Solana and Ethereum.

And these investments continue to eye for various start-ups, considering their growth potential in the long
run. Such developments are expected to bring in more opportunities for blockchain firms, aid them to
take up risks, and aim for high gains in the future.

Blockchain offers investors better security.

The blockchain is a digital ledger that keeps track of all online transactions. This public information is
dispersed over a computer network, making it nearly hard to hack or alter. In light of this, the blockchain
is frequently hailed as being the most secure method of data storage.

The blockchain provides more transparency and security in the context of venture capital funding. The
specifics of an agreement, such as when a venture capital company invests in a business, are
documented on the blockchain network. All participants in the transaction then have access to this
information, making sure that each individual is on the same page.

Additionally, the usage of smart contracts allows for automating some elements of the transaction, such
as the distribution of payments. This increases process efficiency and lowers the possibility of human
mistakes.

In the end, the venture capital sector may undergo a transformation owing to the blockchain. It may assist
VC firms in establishing confidence with their investors and portfolio companies by making agreements
more safe and transparent. This may then result in increased funding entering the VC ecosystem,
spurring development and expansion.

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