Tiger Research: ICO returns once again, can the new generation of the four major fundraising platforms succeed?

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This report is written by Tiger Research, analyzing the resurgence of public token sales and delving into the operational strategies of the four major launch platforms, which are: Legion, BuidlPad, Sonar, and Kaito.

Key Points

Since the ICO boom in 2017, public sales have been making a resurgence in a new form. Diverse launch platforms such as Legion, Buidlpad, Sonar, and Kaito are leading the market development trends.

The vast majority of platforms require KYC (Know Your Customer) and compliance with relevant regulations. Each platform achieves its differentiated positioning through unique participant selection criteria and token allocation mechanisms.

The short-term hype around public launch platforms may gradually cool down. However, due to structural demand, public launch platforms are expected to exist in the long term. They serve as important tools for projects to acquire early users and liquidity.

1. Return from private placement sales to public sales

Source: Tiger Research

The ICO (Initial Coin Offering) craze peaked in 2017 but quickly lost market credibility due to issues such as fraud and lack of transparency, leading to a sharp contraction of the entire market. Subsequently, the market shifted towards private sale models. The chances for retail investors to participate early were significantly reduced. However, public sales have recently begun to re-emerge in a brand new form. This revival has been made possible by the emergence of various launch platforms that address the issues faced by previous ICOs.

The driving force behind this transformation is a clearer regulatory framework. The European Union's Markets in Crypto-Assets Regulation (MiCA) has established a clear licensing system for token issuers and fundraising platforms. This provides a solid legal foundation for selling tokens to qualified participants. Some regions in Asia and several financial centers in the Middle East now allow KYC-based token sales within local licensing frameworks. These developments collectively create a market environment where public sales can operate legally within a regulatory framework.

This report will delve into the characteristics and operational strategies of emerging launch platforms within this transformative environmental context. Additionally, the report will explore the future development direction of the public launch platform market.

2. Four major launch platforms, four distinct paths

New launch platforms continue to emerge, driving the diversification of public sale methods. All platforms consider compliance measures such as KYC as basic requirements. However, there are significant differences among platforms in terms of participant screening mechanisms and token distribution methods. This report will closely examine four representative launch platforms and explore the specific manifestations of these differences in detail.

2.1. Legion: A Crypto Launch Platform Based on Contribution Value

Source: Legion

Legion is a public sales platform whose core concept is to filter out investors who can truly contribute to project development and provide them with fair investment opportunities. The platform's goal is not merely to find investors for fundraising. Legion is committed to connecting participants who can create real value for the project, thereby maximizing long-term value.

Source: Legion

To achieve this goal, Legion has developed and operates a proprietary value assessment system called “Legion Score.” This scoring system quantitatively evaluates by integrating multidimensional on-chain and off-chain data, including on-chain activity historical records, social media influence metrics, and GitHub development activity scores. Additionally, investors are required to submit an application letter when participating in funding rounds, detailing how they can contribute to the project. This mechanism allows the platform to qualitatively assess those subjective factors that are difficult to quantify (mainly through the analysis of large language models, LLM). This approach provides a comprehensive evaluation of an investor's ability to contribute to the ecosystem, rather than simply considering their financial strength.

The recent Yield Basis token sale has fully demonstrated how this method operates in practice. This sale received applications from over 67,000 people. Legion is based on a Legion score, but uses a relative assessment rather than an absolute assessment. The platform comprehensively considers multiple factors, including whether the applicant has posted about Yield Basis on Twitter, their on-chain activity performance in relevant protocols, and their GitHub contribution history targeted at the developer community. Manual review serves as a supplementary means throughout the entire process to complete the final selection decision.

Each round allocation quota and the median of smart followers - profit basis, source: Legion

However, this process has also sparked some controversy. Some participants question whether the token distribution is overly concentrated in the hands of a few influential individuals. In response, Legion released a transparency report that detailed the distribution criteria and the actual distribution situation. However, this precisely reveals the fundamental dilemma inherent in the value contribution model. Qualitative judgments will inevitably intervene in the selection process. The platform cannot fully disclose the detailed criteria for evaluating the value of different types of contributions. This is because disclosing overly detailed evaluation criteria may lead participants to manipulate the system through false participation. A certain degree of opacity remains unavoidable. This model faces structural constraints in balancing the pursuit of complete objectivity and maintaining transparency.

Nevertheless, Legion's exploration approach still holds significant practical significance. It presents a fundraising structure centered on contribution capabilities, rather than simply relying on capital power or a first-come-first-served competitive mechanism. This approach can connect projects with truly suitable investors. The method attempts to transform public sales from pure speculative hype into long-term community engagement and development. It also represents an experimental attempt to achieve the ideals of openness and accessibility pursued by past ICOs through innovative methods.

2.2. Buidlpad: A crypto launch platform based on participation mechanisms

Source: Buidlpad

Buidlpad is a launch platform focused on the Sui ecosystem, which adopts an operational strategy that is completely different from Legion. Both platforms allow anyone who completes KYC verification to participate, but there are essential differences in the participant screening criteria. Legion uses a value scoring system, while Buidlpad's screening is based on the liquidity contributions that participants provide to the project. Participants need to directly stake funds into their preferred project pool in the Hodl section. The ranking division depends on the amount staked. Higher rankings will receive better token purchase prices.

Source: Buidlpad

This method has obvious advantages and disadvantages. Anyone with funds can participate, which creates a lower barrier to entry. Projects can obtain necessary liquidity support at an early stage. Projects like Momentum, which are currently being sold on Buidlpad, have successfully gained considerable TVL (Total Value Locked). However, the scale of capital becomes a prerequisite for participation. This limits the opportunities for participants who can contribute through influence or technical ability (just like on the Legion platform).

Source: Buidlpad

Buidlpad recently launched the “Squad” system to address the limitations of this capital-centric structure. The Squad adds gamification elements to the existing staking model. This attempt aims to break through the purely capital provision model. Participants can upload project-related content by creating social media content and conducting community activities. They will receive additional incentive rewards based on the quality of the content.

This architecture begins to cultivate an active community from the launch platform stage and encourages participants to contribute more beyond capital contributions. The project team is able to obtain both the liquidity required for the early guidance stage and the promotional effects. The exploratory approach of Buidlpad fully demonstrates how a launch platform can evolve from a simple fundraising channel into a comprehensive tool for ecosystem guidance and cultivation.

2.3. Sonar: Public launch platform from the joint investment platform Echo.

Source: Echo

Sonar is a public launch platform developed by the joint investment platform Echo. Echo itself operates on an invitation-only closed model. In addition to KYC verification, the platform also conducts strict screening and review of participants based on their investment experience and capability. This makes it a platform exclusively for professional investors. This closed architecture sets a high barrier to entry for retail investors. The birth of Sonar is precisely to fill this gap, pursuing a more open token sale model.

The most notable feature of Sonar is its high flexibility. Project teams can freely configure sales schedules, pricing strategies, and allocation methods. Sonar only provides software tool support. Throughout the process, Echo's compliance framework remains intact and effective. Participants must undergo qualification review processes that include KYC. However, only qualification certification is transmitted to the project team, not the participants' personal information. This meets both legal compliance requirements and the need for privacy protection. Projects like Plasma and MegaEther have successfully completed token sales through Sonar using this method.

Source: Sonar

However, this high degree of flexibility also brings uncertainty to investors. The sales structures between different projects vary significantly. Detailed evaluation criteria or responsible parties may not be clearly disclosed. When issues arise, the attribution of responsibility between the platform and the project can become ambiguous. Compared to centralized platforms that operate under clear rules, this may pose structural risks.

2.4. Kaito Capital Launchpad: A Crypto Launch Platform Based on Social Data

Source: Kaito

Kaito Capital Launchpad is a reputation-based, value-oriented public launch platform that screens participants based on their reputation. The platform adopts a philosophy similar to Legion but differentiates itself by focusing on the dimension of social influence. Kaito was initially operated as an AI-based cryptocurrency information analysis platform. It provides market insights based on on-chain data and quantifies social activities through the Yaps system. The Kaito Capital launch platform extends this data infrastructure into the public sales domain.

Source: Kaito

Kaito Capital's launch platform scores users' social influence through Yap points. It combines this score with factors such as on-chain participation history, the amount of Kaito tokens held and staked, past sales participation experience, and regional allocation limits to determine allocation priority comprehensively. Yap points are not a mandatory requirement. However, the higher the position on the leaderboard, the greater the chance of receiving a larger share allocation or reward. Some projects may grant priority participation rights to Yap point holders.

This architecture provides clear advantages for the project parties. Projects can bring influential social media participants into the ranks of early investors, thereby gaining a natural promotional effect. This strategy is particularly effective for projects where visibility in the early stages is crucial. However, this model also has its limitations. The architecture centers around activities within the Kaito ecosystem, which sets a higher entry barrier for external participants. The evaluation criteria focus on considerations of social influence. This makes it difficult for the platform to fairly assess the value of other types of contributors, such as developers.

3. Can the public launch platform maintain high returns in the future?

Recently, the market's attention towards public launch platforms has significantly increased. Projects launched through Buidlpad have successfully been listed on major Korean exchanges such as Upbit and Bithumb, achieving a price increase within a short period. These success stories have raised investors' market expectations. Although the returns have decreased compared to previous IDO (Initial Decentralized Exchange Offering) cycles (Star Atlas recorded astonishing returns of several hundred times during its IDO in 2021), these investment opportunities still maintain considerable attractiveness considering the market conditions after a long period of stagnation.

This heightened enthusiasm is unlikely to last. As high-return cases continue to emerge, investor expectations will rise to unrealistic levels. Not all projects can guarantee the same level of returns. When actual results fall short of expectations, disappointment will spread among participants and is likely to lead to fatigue across the entire market. Excessive market overheating can also place a heavy burden on project teams. When a large number of participants, seeking only short-term profits, flock in, the overall quality of the community deteriorates. The conversion of long-term users and the continuous maintenance of the ecosystem become increasingly difficult. As this pattern repeats, enthusiasm for participation will naturally wane. The phenomenon of market overheating in the short term is likely to ease after reaching a certain critical point.

Nevertheless, public launch platforms are likely to continue as a model based on structural needs rather than temporary trends. Today's cryptocurrency market is much more complex than in the past and will become even more complicated. Countless projects are emerging simultaneously. They require initial fundraising methods to build communities and secure user bases. However, conducting a TGE (Token Generation Event) independently involves high costs and significant risks. In an environment plagued by bot accounts and duplicate accounts, even identifying real users is a daunting challenge. Public launch platforms provide structured solutions to these difficulties. Through a pool of vetted participants, projects can efficiently obtain initial liquidity and community support.

For investors, the public launch platform provides a way to regain “early investment opportunities,” which have been closed off for a period of time. It offers a pathway for individual investors who have been excluded from the venture capital-centric market structure, allowing them to participate in early-stage projects in a fairer and more transparent manner. This is not just about simple profit realization; it serves as a brand new structural mechanism that enables people to directly participate in the starting point of the token economy.

However, challenges still exist. There is a fundamental conflict between the openness of participation and the efficiency of screening. Achieving a balance between the ideal that “anyone should be able to participate” and the reality of “screening out real actual users” is an extremely difficult task. Overly transparent standards may invite the risk of the system being exploited and manipulated. On the other hand, opaque standards can undermine market trust. At this critical junction, continuous evolution at both the institutional and technological levels remains essential.

Original link: Tiger Research