In this edition of Cointelegraph’s VC Roundup, we shine a spotlight on a diverse array of crypto startups securing funding from various sources, including grants and node sales, showcasing the dynamism and growth potential within the sector.

Venture capitalists are reentering the crypto space with vigor, bringing with them a range of funding options for startups, including grants and node sales, to fuel innovation in the industry. Notably, Seamless, a lending platform native to Base, has unveiled a collaborative initiative with layer-3 Degen Chain and semi-fungible token protocol Pandora, earmarking almost $600,000 in grants for creators and developers contributing to the Base ecosystem.

Degen Chain focuses on nurturing developers interested in building within Farcaster and Degen Chain, while Pandora seeks creators keen on exploring ERC-404 technology for their collections and memecoins. Ras, a pseudonymous member of the Seamless Community Grants Program, emphasized the importance of fostering innovative ideas to uplift relevant ecosystems.

SingularityNET ecosystem is also gearing up to launch the Deep Funding Round 4, offering over $1 million to support decentralized artificial intelligence projects, underscoring the growing availability of grants in the crypto space.

While grants provide valuable support for nascent projects, the funding landscape for crypto startups is becoming more inclusive. Investment in crypto firms surged by 38% in the first quarter of 2024, with a 49% increase in the number of projects receiving funding compared to the previous quarter, signaling robust growth in the sector.

March witnessed over $1.1 billion poured into 180 crypto-related projects, with a significant portion allocated to infrastructure and decentralized finance initiatives. Notable highlights from April include Monad Labs securing a $225 million round led by Paradigm, while Auradine, a crypto mining hardware provider, raised $80 million in its Series B funding round.

Now, let's dive into some of the noteworthy startups that have recently secured funding:

Sapien Raises $5M in Seed Round:
Sapien, an artificial intelligence data labeling startup, has secured a $5 million seed investment from prominent investors such as Primitive Ventures, Animoca, Ravikant Capital, and Yield Guild Games. Founded by Trevor Koverko in 2023, Sapien aims to address the bottleneck in AI data labeling by leveraging blockchain technology to gamify the process and incentivize labelers to produce high-quality work. The funding will support the expansion of Sapien's team and infrastructure to enhance data quality further.

Alpen Labs Raises $10.6M for Bitcoin-Based Economy:
Alpen Labs, a Bitcoin layer-2 developer, has raised $10.6 million in funding to bolster Bitcoin's blockchain scalability using zero-knowledge proofs. Led by Ribbit Capital, the funding round saw participation from prominent investors, including Castle Island Ventures and Robot Ventures. Alpen Labs aims to introduce smart contract functionality to Bitcoin through its rollup infrastructure, enabling various on-chain financial applications.

HYCHAIN Raises $8M Through Node Sales:
HYCHAIN, a layer-2 decentralized network for gaming, has raised over $8 million through a node sale, attracting 3,357 unique holders who contributed to network security. The protocol rewards node operators with 25% of transaction fees indefinitely, incentivizing community participation and fostering network resilience. With its mainnet launch in March, HYCHAIN offers advanced features and bridges for seamless connectivity with Ethereum and Polygon networks.

Web3Firewall Secures $2.5M in Pre-Seed Funding:
Web3Firewall, a blockchain and digital asset security platform, has completed a $2.5 million pre-seed funding round led by Laser Digital, gumi Cryptos Capital, and SPEILLLP. Founded by Dr. Samer Fayssal in 2023, Web3Firewall offers integrated risk and compliance solutions tailored for DeFi, NFTs, and DAOs. The platform, set to launch in the second quarter of this year, leverages AI and machine learning for real-time threat detection and prevention, addressing the evolving security needs of blockchain-based enterprises.