In a year marked by significant growth for the crypto industry, a new report has revealed that over one-third of the projects funded in 2021 have not yet delivered a product.

The report by crypto venture funding firm Lattice provided a comprehensive analysis of the performance of nearly 800 companies that had collectively received $2.6 billion in investments last year.

According to the report, only about 5% of crypto projects have successfully found a product-market fit (PMF) despite two years of development.

The remaining projects are still in various stages of development, with 70% having shipped a product to mainnet or its equivalent. However, 20% of the projects have shut down or halted development.

Interestingly, the report also revealed that investor interest did not necessarily correlate with the success of the companies.

Investors showed a preference for the application layer, but it was the CeFi and Infra teams that demonstrated more traction and raised more follow-on rounds.

Regarding product delivery, nearly 90% of infrastructure projects shipped to mainnet, while fewer than 75% of DeFi projects did the same.

DeFi, Consumer/Web3, and especially gaming projects have struggled to find PMF.

Despite these challenges, nearly 50% of the projects have launched a token, with gaming projects — 70% of which have chosen to launch a token — leading the way.

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The report also highlighted the dominance of Ethereum (CRYPTO: ETH) in the layer-one ecosystems. However, it noted that BNB (CRYPTO: BNB) teams are most at risk, with a 30% failure rate.

On the other hand, 75% of Solana (CRYPTO: SOL) teams delivered a product to the mainnet, while Polkadot (CRYPTO: DOT) lagged at 62%, according to the report. 

2021 was a significant year for the crypto market, with the total value locked on all protocols climbing from $15.3 billion in January to a high of $175 billion by November.

Amid this growth, the report's findings underscore the challenges and opportunities that lie ahead for the industry.

The report was compiled based on a combination of first-party data, information from Messari (formerly Dove Metrics), and numbers from Crunchbase.

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