Chainfeeds Summary:
Token sales have made a comeback in the past one to two years, a trend partly driven by improved regulatory conditions. Last year, compliant token sales projects such as Plasma, MegaETH, and Monad attracted billions of dollars in market demand.
Article source:
https://x.com/castle_labs/status/2019394933556146327
Article Author:
Castle Capital
Opinion:
Castle Capital: After the ICO era ended, the funding gap was gradually filled by venture capital, with VCs becoming the primary source of early-stage funding for many projects. This led to a structural change: retail investor participation was significantly weakened, while VC involvement became an implicit endorsement of quality, with many retail investors viewing the entry of well-known investment institutions as third-party verification. However, over time, the VC model has also exposed the problem of incentive mismatch. Compared to the token structure in ICOs, which is more community-oriented, VCs often have a larger share of tokens, thus having greater influence in roadmaps, product priorities, and governance decisions. Their goal is usually to maximize returns, rather than neutrally maintaining ecosystem development. This structure has led to a trend of "low circulation, high FDV": many projects launch with extremely high valuations, but actual demand is limited. For example, Berachain's private placement valuation was reportedly $1.5 billion, its market capitalization exceeded $4 billion at launch, but it has now fallen to less than $400 million. VCs enter at extremely low prices in the early stages, while retail investors often enter later in the price discovery phase. This structure easily makes retail investors the exit liquidity. While VC funding can provide resources, networks, and strategic support, and isn't entirely bad, the VC-dominated phase has indeed exposed persistent risks of misaligned interests. Therefore, a more credible alternative has resurfaced: community-driven fundraising has made a comeback. Platforms like Echo, Kaito, and Legion have emerged, attempting to involve communities in project growth earlier. For example, Echo has raised over $160 million since its launch in 2024 and was acquired by Coinbase for $375 million in 2025; while the Yieldbasis project on Legion, aiming to raise $2 million, attracted over $195 million in subscriptions. Meanwhile, increased regulatory clarity has been a significant driving force behind this token sale revival. The EU's MiCA regulations have clarified token issuance rules, the US CLARITY Act is underway, and the widespread requirement for KYC, KYB, and KYI (Know Your Issuer) has gradually moved token issuance from a state of disorder to one of standardization, creating conditions for it to become a mainstream fundraising model again. LBP allows for dynamic adjustment of token weights (Token A/Token B) during token sales, with projects able to set initial and final weights. Introduced by Balancer in 2020, this mechanism typically starts with a relatively high implied price to discourage early participants (including, in some cases, malicious participants known as "snipers") from buying large quantities of tokens at low prices. Over time, the token weights are gradually adjusted according to a pre-set rhythm, causing the price to gradually decrease. This mechanism facilitates a smoother price discovery process, allowing later participants to typically enter at lower prices. Uniswap launched the CCA mechanism in late 2025 for liquidity-driven sales, with Aztec being the first project to use this mechanism for a token sale in December 2025. Since Tally offers CCA as a sale method on its platform and automatically injects 20% of the raised funds into Uniswap v4's LP positions, it is expected to become a significant third-party infrastructure provider for such sales. The team is also working to enable sales conducted through Tally to be displayed directly in the Uniswap front-end interface.
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