Web3 startups surge in Asia and Europe amid expanding regulation: report
The crypto sector is undergoing a regulatory overhaul in various parts of the world, with the aim of making the industry safer for its members. Countries that have initiated these frameworks are seeing a spike in the number of Web3 startups, bringing businesses and opportunities to their citizens. A recent report by blockchain startup accelerator Alliance claims that Europe, Asia, and North America have registered significant expansion in their Web3 startup ecosystems.
Europe has implemented a comprehensive set of regulations, the MiCA framework, to oversee the crypto sector within its region. In Asia, countries like India, South Korea, and Japan are accelerating their efforts to implement laws that bring more transparency to the activities of crypto-related companies. North American regions like El Salvador, where BTC is legal tender, are also supporting startups with their pro-crypto approach.
“Overall, North America, Europe and Asia remain the big three, with each region contributing 1/4 to 1/3 of all startups,” Alliance said in its report. report.
In the US and Canada, however, the wind is blowing the other way.
“In H1 2024, we saw the lowest percentage of startups from the US and Canada ever. This is likely due to regulatory uncertainty in the US and rising crypto adoption in emerging markets,” the report said.
More trends observed
Startups that merge AI and crypto have become an emerging category of Web3 startups, attracting interest from potential founders. These types of startups are linked to the NFT sector, the report said.
Additionally, Web3 projects exploring Decentralized Finance (DeFi) are also growing, despite “little public excitement.”
The report finds that Web3 projects are also rapidly exploring applications in social, payment, and decentralized autonomous organizations (DAOs).
According to the findings, 30 percent of founders who launch Web3 startups have work experience at large tech companies. Alliance categorizes “large tech companies” as companies that are part of the S&P500 group. The findings further indicated that about 1/10 founders in Web3 have experience in founding companies, indicating that tech professionals who want to venture into entrepreneurship are showing interest in exploring opportunities in Web3.
Blockchain, cryptocurrency, NFTs, and the metaverse are a suite of technologies that together form the Web3 sector.
The report provided another insight: 39 percent of all Web3 startups have two founders, and less than 40 percent are founded by sole proprietors.
“Among startups with two or more co-founders, about half split their wealth equally and the other half split it unequally. Nearly three-quarters of startups operate entirely remotely,” the report said.
