The crypto market is undergoing a fundamental shift in its approach to capital formation and token allocation, marked by the strong resurgence of Initial Coin Offerings (ICOs) in 2025. This return is a direct response to the structural flaws inherent in the Venture Capital (VC)-led financing model and the ineffectiveness of conventional Airdrops.
The Failure of the VC-Centric Model: The period between 2022 and 2024 saw projects raising capital from VCs at low Fully Diluted Valuations (FDVs) but manipulating the initial low circulating supply to achieve excessively high valuations upon public listing. This created a significant imbalance of interests where VCs and insiders captured the majority of profits, while retail investors were forced to buy at inflated prices or receive Airdrops that were often viewed as "free money," leading to pervasive "sell-on-receipt" pressure.
Drivers Behind the ICO Revival:
Retail Fatigue: Small investors grew weary of the deteriorating risk-to-reward ratio and shifted their speculative capital toward non-VC-backed assets like Memecoins, where the distribution mechanism felt inherently fairer.
Demand for Fairness and Alignment: The new ICO model is driven by a need for clearer incentive structures where participants commit their own capital at base valuations. This direct purchase creates a stronger psychological and economic bond with the project, encouraging longer-term holding and counteracting the short lifespan of chain assets observed in recent cycles.
VC Structure Adaptation: Major projects like MegaETH and Monad are signaling change by allocating a portion of their VC rounds to public sales at the same valuation, demonstrating an effort to align interests with the community.
Launchpad Infrastructure Build-Out: The acquisition of Echo by Coinbase and the launch of its native in-app launchpad confirm that the necessary infrastructure is being built to standardize and professionalize these public sales. The focus is shifting toward allocating discounts or access based on verified, sophisticated on-chain behavior (such as consistent liquidity provision or public goods contributions) rather than simple activity farming.
The core belief fueling this trend is that token value must be derived from a commitment to the protocol, rather than mere entitlement. The new ICO approach offers a more transparent structure, often with clearer circulating supplies and more reasonable FDVs compared to the high-float, low-liquidity models favored by VCs. While challenges remain—including potential regulatory hurdles and the risk of 'ICO fatigue'—the ultimate outcome is predicted to be a Hybrid Model where Airdrops may still be used to reward early users, but transparent, commitment-based ICOs will drive funding and long-term community development.
Posted Using INLEO