Chapter 1: What is the main topic discussed in this episode?
Welcome to Bankless, where we explore the frontier of internet money and internet finance.
Chapter 2: Are ICOs back and what does it mean for the crypto market?
And today on the show, we explore the frontier of capital formation on public blockchains. The big question we're asking today, are ICOs back? MegaEth, Monat, Aztec, Infinex, Zama.
Chapter 3: What lessons were learned from the 2017 ICO mania?
These are five big high quality projects and they are all doing public token sales. Some of these even doing the work ahead of their sale to classify their token as a consumptive good as opposed to a security, which allowed unaccredited investors to invest right alongside everyone else. Ryan, I want this to happen. I want ICOs to return.
The fact that we are seeing not five C-tier projects or B-tier projects, but five A-tier industry leading projects all doing token sales inside of two or three months of each other, I think is a very big deal. It's something that I hope continues.
Chapter 4: How are recent ICOs different from past ICOs?
And if it does continue, the implications for what this does to crypto and what this means for Ethereum, I think are very, very large. And that's what I want to discuss with you here today on the show. Yeah, I think the question is not have they returned, but it's just like observing that they are returning and then trying to extrapolate that moving forward if this trend changes.
To me, capital formation has always been one of the central money verbs of decentralized finance, right? So when we started talking about like, what is this bankless thing? If Bitcoin brought us the ability to hold a store of value asset without a bank, going bankless and holding onto your value and also transacting some of that value.
Chapter 5: What is unique about the MegaEth token sale?
Okay. Those are two money verbs. There's holding and then there's also payment or transacting, right? DeFi was about pursuing all of the other different verbs, borrowing and lending and swapping, and also capital formation, or maybe raising would be a term for that, or minting would be a term.
It is true to say, though, that crypto has had a complicated relationship with capital raising on-chain in the past. Capital formation, yeah. The ICO, I guess maybe the immaculate ICO for an ETH maxi out there was Ethereum, and it was relatively unpolluted. It's just because it was the first time that this happened.
Every other ICO since, particularly in the first cycle of these capital formation ICOs, had kind of a taint to them, and it got progressively worse as the cycle continued. I know you were awakened to crypto in that 2017 cycle.
Chapter 6: How does Monad's ICO approach differ from others?
Many have called this the Ethereum cycle or even the ICO cycle. You actually, correct me if I'm wrong, David, but you got your start in an ICO company during those days when there was a lot of shenanigans going on. it was not all good on the capital raise formation side of things. So I imagine you have a complicated relationship to this topic as well.
Chapter 7: What innovative features does the Aztec ICO offer?
What was your first experience with ICOs and how did you experience 2017? Yeah, the importance of capital formation to go back all the way to 2017 really was the big unlock for me in crypto and I think many others. This was before we even had DeFi. The word DeFi didn't exist. DeFi itself didn't exist. Uniswap wasn't around. MakerDAO wasn't around. We didn't even have stablecoins.
And the first real movement about crypto post-Ethereum using smart contracts was the ICO. Yeah, they said this was like Ethereum's only use case, basically. Only use case, yeah. It's like, what is ETH? ETH was an investment bank where the currency of Ether was used to invest in speculative ideas called ICOs. That was like the first idea of what Ethereum was.
And there was something very powerful about somebody else across the world having an idea and then me resonating with that idea and being able to like one or two click invest in that idea.
Chapter 8: What are the upcoming auctions for Zama and Infinex?
Did you participate in some of these? I participated in one ICO. I will get to which one later. I know you're baiting me on which one it was. I know you're ashamed of which one it is. I'm definitely not ashamed of it. It takes a little bit of context, but we'll get there. We'll get there. We'll get there.
Obviously, this power of there's an idea out there that I want to invest in was powerful for many people because that's what fueled the ICO mania of 2017. We had the basic attention token token sale sold out in three blocks for like $30 million in
really the race was on because it was a little bit too easy to come up with a very attractive idea and it became a little bit too easy for people to send their ether and get some tokens. That's right. But nonetheless, anytime crypto does something far too much for far too long, we learn how to do it correctly like five to eight years later. And that's what I'm seeing happen right now.
Not only did we go through the ICO mania and learn about the power of capital formation, but just as like a completely parallel research and development path, crypto has also been developing very sophisticated auction price discovery mechanisms, which ICOs of today are now leveraging. And so there is a lot of just
work that the industry is standing upon in 2025, December of 2025, that really shapes up and tunes up some of the ICOs to the point where like now, if you were an ICO, you know, back then, it might have been a verse selection. You're probably like a C or B tier project. But the fact that we have Coinbase purchasing Kobe's Echo platform with the Sonar ICO platform,
And then you also have Uniswap with their CCA auction. We have some of the biggest players with the biggest reputations in the space building out ICO pipeline infrastructure, token floating, token price discovery infrastructure, and some of the best projects in crypto are using it. And so it's time to return to this subject.
Because as an industry, we went through some fucking bullshit, excuse my language, that we shouldn't have needed to do. The points programs, the yield farming, retroactive airdrops, like all of this stuff was just a runaround for what should have been an ICO that we just were forced to do that convoluted mess because of the regulatory environment.
Yeah, I guess we're like almost 10 years out from the inception of the idea of the ICO. And there were a lot of problems with ICOs in general, like principal agent problems, incentive problems, alignment problems that I would say happened. And a lot of investors...
and participants got burnt, I actually think the market would have figured that out in a shorter amount of time had we just let the experiment continue. Because what happens is initial ICO participants, they get burnt, and then they come up with better auctions, better incentive alignment, just better mechanisms so that all boats rise together.
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