## 2024 Q3 Investment Strategy

This quarter, the core investment strategy of Web3Port Foundation continues to focus on supporting revolutionary Web3 projects, especially those with long-term potential that can significantly change the industry landscape. We believe that Web3 is not only a technological innovation but also a key force driving creativity and changes in production relationships. Therefore, Web3Port Foundation is still laying out in multiple tracks such as DeFi, AI, DePIN, and Payment. We believe that empowering projects that can lead industry development and provide real value will promote the growth and progress of the entire Web3 ecosystem.

## Overall Data Performance

In the third quarter, Web3Port Foundation scanned and filtered a total of 650 projects; among them, 212 projects passed the initial screening, accounting for 32%; after in-depth research and comprehensive investigation, 34 projects were discussed at the IC meeting, accounting for 16%; ultimately, 19 projects were successfully invested in, accounting for 8.9%, with a total investment amount of 10.1 million USD.

The overall heat of the Web3 primary market declined in the third quarter, with market sentiment relatively sluggish. Although industry VCs are full of interest in projects, they choose to be cautious and observe due to overall uncertainty. This market cooling has caused some anxiety among entrepreneurs and investors. However, Web3Port Foundation remains firmly optimistic about the long-term development opportunities in the Web3 industry, continuing to maintain a high frequency of investments and investment amounts. We firmly believe that the transformative potential of Web3 technology is still immeasurable, and true innovation and breakthroughs will come from projects that dare to move forward in the face of challenges. Therefore, we hope that Web3 entrepreneurs can maintain their fighting spirit, fearlessly face difficulties, and persist in pursuing breakthroughs in cutting-edge technologies and applications.

The distribution of projects discussed at the meeting still reflects W3P's investment strategy, which focuses on early pre-Seed/Seed projects and high-quality late-stage pre-listing projects, forming a pyramid-shaped layout that emphasizes certainty.

Web3Port Foundation categorizes all projects into three main categories: Infra: Providing the necessary technical architecture, hardware, and tools for Web3, such as L1/L2 (Movement, Bitlayer), AI computing power (Aethir), and ZK technology services (Zerobase). Middleware (app/Dapp): Connecting infra and applications, providing support for upper-layer applications, allowing upper-layer applications or users to share information, resources, and liquidity across different infrastructures. Examples include the DeFi trio Jupiter, Echelon, and Trusta. Consumer: The core business model serves C-end users, who contribute the greatest commercial value. Examples include UXLINK and Wildforest.

• The projects discussed at the meeting mainly focus on Infra, Middleware, and other projects with higher technical barriers and higher market ceilings.
• Based on the inherent financial attributes of Web3, DeFi projects remain the main track for discussed projects, followed by AI, DePIN, and GameFi projects.

Notes on the above figure: All curves in this figure are abstracted from multiple values into "heat trend values" proportionally, and the dashed lines after Q3 are forecasted values.

1. Investment activity is composed of the investment enthusiasm of Web3Port Foundation, the number of investment projects, amounts, and other datasets;
2. Market Investment Amount is derived from the actual investment and financing amounts in the Web3 primary market and the number of investment and financing projects, aggregated from public data;
3. Listed Projects are weighted averages of actual listing project data from five mainstream exchanges (Binance, Okx, Bybit, Kucoin, Bitget).

## Thoughts and Sharing on Some Tracks

About AI:

Regarding market expectations for next year, most T1 VCs have a high consensus on the AI track. This is due to some projects in the AI track already being launched this year, and some projects having high-quality financing and investment lineups, leading to a surge of various hype and speculative projects in the primary investment field. However, there have not been projects that are truly linked to blockchain itself or distinguishable from traditional AI. The market is searching for real implementations of the decentralized concept, and some answers have emerged, such as combining decentralization with distributed computing power; integrating token economics with the market side of AIGENT; providing better soil for AI applications and building more suitable AI infrastructure public chains, etc. This line of thought has not stopped, and more ideas and innovations are budding. More thinking is now focused on binding AI AGENTs with individual characteristics, payment transfers between AI AGENTs, verifiability of AI paths, and specific distributed storage environments for AI, etc.

About DePIN:

The DePIN track embodies the logic of Web3 utilizing decentralization and transparency to enhance the scalability and efficiency of infrastructure. By crowdsourcing resources, it addresses the issue of large-scale capital investment by a single entity, with numerous potential applications across various industries, making it easier to achieve real business. With each evolution of DePIN projects, we see that the DePIN track is no longer purely about mining machine logic; projects like Aethir and Akash have begun to generate considerable business revenue. This revenue can not only feed back into the tokens but also reduce the project's reliance on investment funds through the dual addition of mining machine sales and business income, making self-sustaining products more attractive to investors and exchanges.

DePIN projects are also no longer limited to single resource aggregation but are gradually developing into composite resource aggregation protocols, such as integrated storage and computing, bandwidth sharing, and computing acceleration. Currently, they are still mostly concentrated in the infrastructure field, often appearing as upstream for AI. The explosion of AI narratives will also drive related DePIN tracks. General-purpose DePIN infrastructure, middleware, and EdgeAI combined with AI, as well as consumer-grade DePIN products like wearable devices, are all potential tracks. The commonality among DePIN track projects is that they all require communities and grassroots networks for selling mining equipment. In the layout process, gradually internalizing these distribution networks into our capabilities is an exploratory direction.

About Ordinary Investors & Meme:

The core demand of ordinary investors is to obtain returns. After the ICO and DeFi summer, there has not been a good range of returns, but the market always has stories of sudden wealth, just as casinos never lack gamblers. This year's heat has focused on Meme projects led by pump.fun and zero-cost knock knock to earn airdrop strategies in the TG ecosystem. Going to VCs and CEXs to create localized strategies also reflects the true thoughts of retail investors. However, we believe that the professional vision of VCs can also bring projects that allow ordinary investors to make money, and we hope Web3Port Foundation can strive to achieve this.

The Meme track has also gradually seen the emergence of decentralized "conspiracy groups" centered around project parties, market makers, KOLs, early discoverers, and disseminators, with a noticeable increase in the proportion of Meme tokens led by these groups. Meme is no longer merely a chain-based PVP asset; for projects with a main narrative that is not Meme, Meme has begun to serve as a medium for brand communication and a tool for increasing community engagement. The operational strategies of conventional projects will become more closely intertwined with Meme.

## Conclusion:

In Q3, we adhered to our original intention, providing the market with assistance within our capabilities, focusing on supporting AI, DeFi, and infrastructure tracks, and achieving deep cooperation with multiple public chains, while also planting seeds for potential explosive projects in the future. We firmly believe that the future market will bring more possibilities.

Currently, the U.S. elections have settled, and we see that policy direction and market hot money are beginning to flow back to Web3, which is exciting. We are confident about Q4, and we will continue to provide comprehensive support, including but not limited to funding, to projects with potential and value. We welcome everyone to contact us.