M&A for DeFi protocols are coming as market conditions change – Marketingwithanoy

At the Permitted At the conference in sunny West Palm Beach, talks about crypto mergers and acquisitions heated up as market players began discussing this trend at the protocol-level for decentralized finance (DeFi).

Panelists Nikita Ovchinnik, chief business development officer at 1inch; Vanessa Grellet, managing partner at Aglaé Ventures; and Tom Schmidt, partner at Dragonfly Capital, took the stage with Marketingwithanoy to discuss what DeFi M&A will look like as crypto market conditions turn shaky.

Conference host (and my former employer) Mike Ippolito, co-founder of Blockworks, said while introducing the panel that while mergers and acquisitions often happen in the traditional startup space, it’s something that is researched and developed at the protocol level in real time.

“I think we’re going to see an explosion of mergers and acquisitions in DeFi,” Ovchinnik said. “M&A is ultimately a perfect tool [for] how to scale and expand your product line and roll out the long-term horizon.”

Given the current bearish crypto market conditions, panelists agreed that while some DeFi protocols can survive the downturn and continue to raise funds, it will be harder to sustain themselves when that capital dries up and there will be a lot more consolidation in the coming years. two years.

In 2020, there were 118 crypto mergers and acquisitions, which increased by 233% to 393 deals in 2021, according to a report by PwC. Average deal size also increased 241% from $52.7 million to $179.7 million over the same period. .

In December 2021, two Decentralized Autonomous Organizations (DAOs), Rari Capital and Fei Protocol, were merged through a token swap and united under a new TRIBE token and named FeiRari. Jeff Amico, a partner of the crypto team at Andreessen Horowitz, tweeted that the merger was “a new primitive to align incentives between web3 communities in the future.”

But it’s been about six months since that merger, and clarity and guidance around mergers and acquisitions in DeFi remains limited, the panelists noted.

“I think the M&A infrastructure just doesn’t really exist in crypto right now,” Schmidt said, adding that until the market matures, it will be ad hoc figuring out how these actually happen.

‘It is now the wild, the wild west; there’s no frame,” Grellet said. “We can copy and paste the existing traditional financial framework, but I don’t know if that’s really what we want to do.”

DeFi protocols are consolidating as market conditions increase

On May 17, blockchain analytics platform Nansen announced the acquisition of Ape Board, a multi-chain DeFi dashboard, for an undisclosed eight-figure sum, Nansen CEO Alex Svanevik told Marketingwithanoy.

“We will never rely on M&A as the primary way to expand, but I do think our part of crypto, which is the information landscape, is ripe for consolidation,” Svanevik said. “It’s not nice to have to visit twenty different websites for information.”

Leave a comment