Opinion: Hatu Sheikh, founder of Coin Terminal
Crypto has largely failed retail investors. Insiders and agencies scooped up lucrative opportunities before reaching the open market. Memecoins and purely speculative theatre are the only way retail investors can regain stock in Pie.
They remain exposed to the “crime supercycle” that began with an unregulated initial coin offering (ICO) in 2017-18. At the time, early DEX products (IDOs) emerged, providing retail investors with open and fair access to early stage projects. Gradually, however, high threshold requirements, long vesting periods, and information asymmetry made most IDOS a no-go for retail investors.
IDOs are generally dead. But they will live longer than ever – thrive by ensuring long-term growth and sustainable revenue generation for retail investors. Furthermore, IDOs are the most viable and reliable path for grassroots users to build generational wealth.
Loss of retail investors’ dreams
From unauthorized transactions to fractional ownership, retail investors came to the code with dreams. The unbanked loser took real shots with financial freedom for the first time in global economic history.
However, they faced a constant, massive amount of fraudulent projects and fundraising fraud. During the so-called ICO epidemic, they lost over $16 billion while trying to buy it for the “next best.”
idos has promised to fix it. They have secured crypto funding with robust investor protection measures, including strict, publicly listed due diligence. A solid team and a realistic roadmap have become an essential drawback for the project.
Most importantly, IDO introduced token staking to ensure more skins for projects and investors’ games. It provided crypto economy security against pump and dump scams. But on the other hand, a higher staking benchmark tipped the odds in favour of the agency. Retail investors were excluded. Also.
Related: Binance-supported Magic Square IDO Platform to Democratize Access for Retail Investors
Token staking has two negative effects on IDOs. The issue of cold start in terms of limited opportunities and liquidity for retail investors. It’s also a vicious cycle as 64% of retail investors are willing to pour liquidity into early stage projects.
Crypto is thriving with crowdfunding for reasons. Whales can take the industry so far. If IDOs do not offer promises of large-scale bottom-up financial empowerment, they will inevitably sink irrelevant. Crypto is also down overall.
Democratization redeems the ide
It’s not too late. IDOS can turn and have a bright future. The key is to stay true to retail-first origins. Ensuring fair launches and fair opportunities is important.
The shift has already begun. New age of IDO Launchpads won’t be forced to lock investors into their funds. Anyone can start funding early stage projects for $100 (or more), opening the field for small and medium-sized investors as much as institutions.
Going it a step further, the innovative launchpad offers unprecedented features such as refunds, allowing investors to opt out of positions when needed.
In addition to leaving investors to manage their funds, emerging launchpads ensure a clear, rigorous screening. As a result, only high quality projects are listed, allowing investors to access long-term growth opportunities with low risk and even lower entry barriers.
This retail-friendly approach effectively solves security and liquidity in an instant. It also focuses on the foundations of the early stages, prioritizing actual values over mere speculation. It also creates equal arenas where first-time investors and institutions can thrive.
IDO has entered the next evolutionary stage. Investing in early stage crypto projects is no longer a zero-sum game. There, those with deep pockets bring great unfair benefits.
With an increase in democratization and a willingness to promote real merit, space ultimately aligns with the fundamental principles of cryptography.
Evaluations of holistic projects based on market narratives, product market fit, revenue distribution channels, token utilities and community growth are becoming standard. The flashy white paper and pitch decks don’t cut it anymore. The barriers to fraud are rising. The barriers to investment in such well-rated projects are much lower.
The supply and demand aspects have reached equilibrium. And that doesn’t compromise on the intrinsic value either. It is the most authentic and in the broadest sense of the term is a return to basics.
The innovative LaunchPad is redeeming your ID. They are raising bars and setting new standards for retail-driven funding with crypto. The next step, albeit the most important step, is that the platform within the space adopts a queue and subscribes to the entire shift.
IDOs were never nearing fulfilling their promises to justify their spirit to retail investors. But they have never been far apart. This is an inflection point.
From here, retail investors decide the future of IDOs and crypto. They either join the numbers or sign off forever. The innovators are cutting their work – this time it’s reality.
Opinion: Hatu Sheikh, founder of Coin Terminal.
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.
