A guide to VC watching

Using DeFillama

DeFillama has a dashboard that shows the latest crypto funding rounds.

You can easily access it in this way:

→ Go to DeFillama’s main page

→ Click on ‘Raises’ (on the left side)

→ Click on ‘Overview’

DeFillama’s Crypto Raises page

After you complete the steps above, you’ll be able to sort hundreds of projects by the amount of money raised, investor, chain, sector, and more.

I generally look for projects that either:

→ raised a very large amount of money (let’s say over $20M)

→ are building something completely new (an example is Eclipse, the first Ethereum L2 that is leveraging Solana’s Virtual Machine for higher performance)

Many people seem to believe that it’s not worth investing in projects that raised huge amounts of money from VCs and already have high token valuations at launch.

However, Celestia’s $TIA is an example of a token that has shown that this isn’t always the case.

Celestia’s token called $TIA had a $2B fully diluted valuation at launch and its team raised $50M from VCs. Yet $TIA did an 8x last year in just a few months.

Obviously, this doesn’t mean that all projects with strong VC backing will do well, but it’s generally worth monitoring those that raised lots of money.

Using Spot On Chain

Spot On Chain is an on-chain data analytics platform that makes it easy to interpret on-chain data.

Its database labels hundreds of influential people, investment funds, and CEXs.

You can monitor VCs’ on-chain activity with its help using 2 of its features:

1. Labels

If, for example, you want to track the on-chain activity of a16z, a well-known crypto fund, all you have to do is search “a16z” on Spot On Chain search bar.

After you do that, Spot on chain will show you the latest on-chain transactions, the PNL details by token, and the tokens held by a16z’s public wallet addresses.

The most popular crypto VCs are all tracked by Spot on chain. So you can monitor in this way the on-chain activity of almost any major crypto fund.

1. Signals

On the platform, you can find a feed with streamlined on-chain signals that show the most interesting things that are currently happening on-chain.

From time to time, here you can also find details regarding the transactions of VCs or other well-known crypto entities when they transfer large amounts of money.

There are several ways how you can take advantage of this data.

For instance, in most cases, a whale moving large amounts of a token supply to a CEX signals its intention to sell that token, so this is something bearish.

Together with Lista DAO

GET REWARDED FOR YOUR DEFI ACTIVITY

Lista DAO, the largest stablecoin protocol on Binance Smart Chain, has just released Season 2 of its Cosmic Adventure Challenge.

By simply using the protocol, you can earn a share of a guaranteed $LISTA airdrop.

Here’s what you need to know about Season 2 of Lista’s Adventure Challenge:

• 3% of $LISTA’s total token supply is allocated to the participants
• There are 7 quests that can be completed to earn Lista points
• Season 2 will end on 15th April

To qualify for the airdrop, you have to complete one of the 7 available quests: provide liquidity to Lista, Borrow lisUSD, mint slisBNB against BNB on Synclub, Provide liquidity in lisUSD or slisBNB liquidity pools, Hold or Stake lisUSD, or Create lisUSD and slisBNB Trading volume.

LisUSD is Lista’s own overcollateralized stablecoin.

There are less than 30 days until the end of Cosmic Adventure Challenge Season 2, so if you want to participate, now is the opportune time.

Explore Lista DAO today and farm for its airdrop!

Using CryptoRank

The last tool I want to cover is CryptoRank, which also provides some valuable insights regarding VCs’ activity.

To find them, follow these steps:

• go to CryptoRank
• click on “Fundraising” → Funds
• select a crypto fund

After you do that, you’ll be able to see all the projects that are part of that crypto fund’s portfolio, its main investment categories, and the past performance of the tokens that they invested in.

On the Funds page, you can see a metric called “Retail ROI” for every VC listed. This can be useful to determine which VCs are highly profitable.

The higher this Retail ROI is, the better, as this metric essentially shows how successful most projects from that VC’s portfolio have been.

Based on Retail ROI and other data displayed on CryptoRank, you can compile a list of some of the most profitable Venture Capitalists.

After you do that, one thing you can do is to sort the recent crypto raises on the DeFillama Raises page by these investors in order to see only the projects in which the best VCs invested.

How to use all this VC data to your advantage

Now that I’ve finished covering how you can monitor VC activity, let’s talk about how you can actually leverage this data to make some money.

Most (but not all) projects that raise money from VCs are tokenless.

While this means that in many cases you can’t directly bet on their success by buying their tokens, there are 2 other things you can do:

1. create an X (Twitter) list and add to it the official X accounts of the projects that raised money from VCs and that you find the most interesting

This can be helpful if you plan to buy their tokens at launch and you want to make sure you don’t miss out on their token launch event.

By creating an X list and monitoring it regularly rather than just following the projects’ X accounts, it’s way easier to stay on top of their developments.

Historically, new shiny coins outperform in bull markets.

That’s the main reason why I believe that it’s a good idea to pay attention to new/upcoming protocols that just raised money from VCs.

1. farm their airdrops (when it’s possible and the project has a live product)

If a project has raised a large amount of money in funding (let’s say over $20M) and has an interesting product, its airdrop might be worth farming.

Generally, the more money a project raises from VCs, the higher the valuation of its future token will be, which makes it likely that the project will distribute a big airdrop.

Eigenlayer Case Study

Eigenlayer, the ETH restaking protocol, has grown at an astonishing rate over the past few months. Now it is the #3 largest app in DeFi by TVL.

In March last year, its team announced that they’ve raised $50M in funding.

This happened even before the Eigenlayer mainnet went live. $50M is quite a lot, especially given that crypto was still in a bear market at that time.

I heard about Eigenlayer for the first time before the team made this announcement, but when I learned about its funding round I started diving deeper into it.

Knowing about Eigenlayer’s large funding round and its innovative product, I closely monitored it and I started farming its airdrop right after its official launch.

This enabled me to gain an edge over the airdrop farmers who discovered Eigenlayer and its points program only 2-3 months ago.

So this is a practical example of how you can use crypto funding activity data to your advantage for airdrop farming purposes.

In short, my playbook is the following:

• monitor the latest crypto raises (the easiest way is with DeFillama)
• research the protocols that raised large amounts of money
• add the most interesting ones to my watchlist to monitor their progress and eventually farm their airdrops when this becomes possible

Through this strategy, you can discover many high-potential airdrop opportunities way earlier than most airdrop farmers.

Disclaimer：

1. This article is reprinted from [thedefinvestor )], Forward the Original Title‘A guide to VC watching’, All copyrights belong to the original author [THE DEFI INVESTOR]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.

2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.

3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.