Initial Coin Offerings (ICOs), a once-dominant fundraising method for cryptocurrency startups, are regaining traction in the wake of a bullish crypto market.
ICOs enable projects to sell their newly created tokens directly to investors, typically in exchange for established cryptocurrencies such as Bitcoin or Ether.
Following a peak in early 2018, when ICO fundraising exceeded $3 billion monthly, the method nearly vanished due to regulatory scrutiny and market skepticism.
Recent developments indicate a resurgence. December saw more than $17 million raised on the investment platform Echo, more than doubling November’s $7.2 million, according to data from Dune Analytics .
MegaETH, a blockchain project under MegaLabs, exemplified this trend by raising $4.2 million in just 56 seconds on Echo. An additional $5.8 million was secured within 75 seconds in a subsequent round. Previously, MegaETH garnered $20 million in a venture-led seed round.
Shuyao Kong, co-founder of MegaLabs, highlighted a shift in fundraising strategies. “We call this the ‘people’s round,’ aiming to reintroduce community involvement at an early stage,” she said, contrasting it with traditional methods that prioritize startups-and-tokens-valuation funding from insiders, followed by token distributions through airdrops.
Despite the enthusiasm, ICOs remain controversial. Retail and venture investors often blame one another for market volatility. Retail participants criticize venture capitalists for selling tokens acquired at discounted rates during private funding rounds, while venture firms argue that token lock-up periods prevent such sales.
Kong revealed that MegaETH’s success has sparked interest from over 50 crypto founders exploring similar “people’s rounds.” Even institutional investors are considering adopting this approach, signaling a shift toward community-focused investment strategies.
However, regulatory challenges persist. ICOs face strict scrutiny in many jurisdictions, though there is speculation that a more crypto-friendly U.S. administration could ease restrictions. Still, legal experts advise caution. William Pao of Cooley LLP noted that while there’s optimism about regulatory change, the current environment still necessitates vigilance from project teams.
The renewed interest in ICOs has also fueled excitement around upcoming projects. Below are three notable ICOs that are capturing the attention of investors:
1. StackOS (SFX)
- Raising: $5.00M
- Price: $0.016 per token
- Tokens for Sale: 312,500,000
- Platform: Tokensoft
- Details: StackOS aims to offer a decentralized cloud infrastructure where users can deploy full-stack applications, private blockchain testnets, and mainnet nodes. It features built-in CI/CD tools, support for Docker images, and managed DevOps infrastructure.
2. Enso Finance (ENSO)
- Raising: $40.00M
- Price: $8.00 starting price (auction format)
- Tokens for Sale: 5,000,000 (5% of total supply)
- Platform: Coinlist
- Details: Enso Finance a bstracts Smart Contract interactions on rollups and blockchains, simplifying the integration of decentralized ecosystems for developers. The token sale begins July 31, 2024, with a reserve price of $1.50 and includes a lock-up period (15% at TGE and 6-month linear vesting).
3. MultiVM (SPIN)
- Raising: $2.00M
- Price: $0.05 per token
- Tokens for Sale: 40,000,000
- Platform: Tokensoft
- Details: MultiVM is a Layer 2 zk-rollup for multi-language Smart Contract development, enabling seamless communication between virtual machines. It is designed to enhance the performance and scalability of Ethereum-based rollups.
