The Return of Public Token Sales
Last month, MegaLabs (MegaETH) raised $10 million in three minutes. Initially targeting $4.2 million, the sale reached its goal in 56 seconds, prompting an additional $5.8 million, fully subscribed in 70 seconds, according to co-founder Shuyao Kong. This raises a critical question:
Are ICOs making a comeback?
The evolution of token fundraising platforms reflects the need to balance decentralization, compliance, and community engagement. CoinList, Echo, and Legion exemplify distinct capital formation models in crypto. This paper analyzes their approaches, advantages, and investor impact.
Why Did ICOs Decline?
ICOs faced several key challenges:
Regulatory Scrutiny – Governments, especially the U.S., classified many ICOs as unregistered securities.
Investor Risks – Selling tokens to anonymous users led to speculative dumping.
Scams & Fraud – The boom attracted fraudulent projects that disappeared post-funding.
Market Evolution – Projects shifted to VC funding, airdrops, and CEX launchpads post-ICO era.
How Are Tokens Launched Today?
Most projects now avoid ICOs and use:
Private Rounds – Raising capital from VCs and Angel Investors
Airdrops – Distributing tokens to users, though often leading to mass dumping.
CEX Launchpads – Exchanges like Binance and Coinbase take large token allocations
Liquidity Mining – Incentivizing users via staking or network interaction.
These methods centralize token ownership, reducing decentralization.
Brian Tubergen, ex-CoinList founder, explains the shift:
Lawyers pushed projects toward airdrops, believing they were safer legally—though this was never fully true.
Token sales are now returning due to three factors:
Regulatory clarity – The SEC targeted projects regardless of token sales, proving avoidance didn’t reduce risk.
Political shifts – Trump’s election may bring a more favorable U.S. regulatory stance.
Airdrop fatigue – Widespread farming has made airdrops less effective.
Declining VC Crypto Returns
It is important to note that VC crypto investment returns have declined significantly. As illustrated in the available Dashboard, during the previous cycle, the benchmark for VC returns reached 563X, whereas the current VC Unrealized Profits Benchmark stands at just 6X—a sharp decline in performance.
Coinlist
Core Team:
Co-Founder: Andrew Bromberg
CEO: Raghav Gulati
CFO: Thomas Wu
ex Co-Founders: Naval Ravikant, Paul Menchov, Kendrick Nguyen, Joshua Slayton, Graham Jenkin, Brian Tubergen
CoinList Funding Insights (Total Raised: $119.20M)
Series A
Date: April 5, 2018 | Amount Raised: $9.20M
Selected Investors: Accomplice (Lead), Polychain Capital, Blockchain Capital, Digital Currency Group, FBGCapital, CoinFund, Electric Capital, Juan Benet (Angel Investor)
Undisclosed Round
Date: October 30, 2019 | Amount Raised: $10.00M
Selected Investors: Polychain Capital, Collaborative Fund, Jack Dorsey
Series A
Date: October 26, 2021 | Amount Raised: $100.00M
Valuation: $1.5B
Selected Investors: Accomplice (Lead), Agman, HashKey Capital, GSR, FBG Capital, CMT Digital, Broadhaven Capital Partners, Hack VC, GoldenTree Asset Management
CoinList was launched in October 2017 as an independent spin-off from AngelList and Protocol Labs, following the Filecoin token sale. Over the years, CoinList ICO has featured many well-known projects such as: Solana, Near Protocol, Ondo Finance, Algorand.
The platform was designed to provide a compliant marketplace for Initial Coin Offerings (ICOs), addressing the regulatory, compliance, and logistical challenges associated with token-based financial instruments.
CoinList operates in a manner similar to AngelList, connecting ICO teams with accredited investors and allowing projects to market their tokens without requiring SEC registration. By enforcing Know-Your-Customer (KYC) and Anti-Money Laundering (AML) requirements, CoinList has positioned itself as a trusted platform for legal token sales.
AngelList, which pioneered the Syndicate model in 2013, enabled angel investors and emerging fund managers to pool capital into startup investments through Special Purpose Vehicles (SPVs). The crypto industry rapidly adopted this model in response to regulatory restrictions on public ICOs in 2018. Despite the resurgence of public token sales, private token sales remain a key strategy for early-stage crypto startups.
To cater to the unique needs of the crypto market, AngelList introduced Crypto SPVs in collaboration with CoinList. These SPVs offer the following advantages:
Stablecoin funding with a $0 funding fee,
Token distribution in-kind to LPs, with CoinList integration expected soon,
Compatibility with non-US token issuers and investors.
Since 2013, AngelList SPVs have deployed over $5 billion, providing crypto startups with access to 72,000+ syndicate-focused LPs. AngelList’s extensive experience in fund administration, compliance, and tax filings complements CoinList’s seven years of crypto market experience and its 12 million+ global users. To date, CoinList has supported over 100 crypto projects.
Crypto RUVs
In 2020, AngelList introduced Roll Up Vehicles (RUVs) to help founders consolidate multiple smaller investors onto their cap tables. This model has now been extended to crypto startups, which often involve a large number of angel investors.
Key benefits of Crypto RUVs include:
Single-link commitment collection to streamline capital raising,
$0 fee for stablecoin contributions,
Comprehensive compliance and reporting management.
By simplifying investment structuring, Crypto RUVs allow startups to engage early supporters while minimizing administrative burdens. This initiative reinforces AngelList’s commitment to enhancing the crypto investment landscape.
CoinList’s Role in the Token Distribution Landscape
The evolution of the crypto industry has introduced multiple approaches to token distribution, transitioning from direct ICOs to alternative models such as airdrops and pre-sales. While traditional ICOs have largely disappeared due to regulatory concerns, CoinList has played a significant role in enabling compliant and structured fundraising models.
Pre-sales allow investors to participate early in a project through structured agreements, while Initial Exchange Offerings (IEOs) provide enhanced oversight via exchange-hosted token sales. Other structured mechanisms, such as token warrants and Simple Agreements for Future Equity (SAFEs), offer investor protection by deferring direct token purchases until later stages.
A primary advantage of CoinList is its strong commitment to regulatory compliance, which reduces risk for both investors and issuers. The platform supports large-scale token distributions, onboarding thousands of investors per sale. Even during market downturns, CoinList-facilitated ICOs raise an average of $7.5 million per project.
Echo
Core Team:
Founder: Jordan Fish (alias Cobie)
Echo was founded by Cobie, a prominent crypto trader and influencer, to facilitate community-driven pre-sales. Unlike traditional ICO platforms, Echo explicitly states that it does not distribute tokens but functions as a mechanism for early-stage capital formation.
Echo gained traction through successful pre-sales, such as the Mega ETH sale, which showcased:
A first tranche of $4.2 million sold out in 56 seconds.
A second tranche raising $5.8 million.
A cap of 1 ETH per participant, ensuring equitable distribution.
Echo’s Unique Features
Broad Participation Limits: Investor caps prevent large entities from dominating allocations.
Strong Market Demand: High-speed sellouts indicate significant retail investor interest.
Fair Distribution Model: Pre-sale structures mimic cultural trends like sneaker drops, where scarcity drives demand.
Comparison to CoinList
While CoinList facilitates fully compliant ICOs, Echo’s pre-sales focus on raising smaller amounts (~$380K per deal) and primarily attract high-net-worth individuals rather than broad retail participation. Unlike CoinList, which distributes tokens shortly after ICOs, Echo investors often do not receive tokens immediately—if ever—due to the syndicate-based structure.
Regulatory and Structural Risks
Extended Compliance Risks: Syndicate-based fundraising can lead to long-term regulatory obligations, as seen in the collapse of firms like Assure in 2022.
Fee Structures Favoring Investors Over Projects: Unlike CoinList, where projects pay fees, Echo’s structure places financial burdens on investors, often requiring them to pay up to 20% of profits plus administrative fees.
Legion
Core Team:
Co-Founder: Fabrizio Giabardo
Co-Founder: Matt O’Connor
Legion Funding Insights (Total Raised: $2.00M)
Seed Round
Date: 27 Aug 2024 | Amount Raised: $2.00M
Selected Investors: Alex Svanevik (Angel Investor), Alliance DAO (Incubator), cyber Fund (Lead Venture), LongHash Ventures (Venture), CoinGecko Ventures (Venture), DelphiLabs (Incubator)
Angel Investors: Mike Dudas, Ryan Watkins, Peter Smith, Maggie Love
Legion was founded by Fabrizio and Matt, experienced professionals from the DeFi, hedge fund, and machine learning sectors. Unlike CoinList and Echo, Legion seeks to reintroduce ICOs as a viable fundraising method while ensuring compliance under the EU’s Markets in Crypto-Assets Regulation (MiCA).
Legion aims to fix current crypto capital formation issues by offering legally compliant ICOs with investor protections, enhancing community engagement from the earliest stages, and addressing problems such as market maker dominance and inflated retail valuations.
The Problem with the Current Market
Legion identifies several flaws in today’s crypto fundraising landscape. High-quality projects often raise privately at low valuations, excluding retail investors. Market makers exert control over token liquidity, distorting fair price discovery. Additionally, airdrops encourage sybil attacks and mass dumping rather than genuine community-building.
Legion’s Key Innovations
Legion introduces MiCA-compliant ICOs, ensuring full legal compliance within the EU. It also employs an investor reputation system known as the Legion Score, which ranks investors based on their contributions, engagement, and historical behavior. Progressive funding rounds prevent overfunding and ensure projects raise capital in structured stages.
The Role of MiCA in Legion’s Model
MiCA provides a clear regulatory framework that allows Legion to:
Offer legally structured ICOs to retail investors.
Require transparent whitepapers outlining risks and investor rights.
Implement a 14-day refund window, reducing speculative FOMO-driven investments.
The Legion Score: Filtering Investors for Better Outcomes
Legion introduces an innovative reputation system, the Legion Score, which ranks investors based on:
Social Influence: Engagement on platforms like X (Twitter) and Farcaster.
Developer Contributions: Active participation in GitHub and open-source projects.
On-Chain Behavior: Past DeFi participation and long-term commitment.
Investment History: Tracking token sales behavior to deter short-term speculation.
Conclusion
Each platform serves a different purpose within the crypto fundraising ecosystem. CoinList remains the best choice for projects seeking large-scale public fundraising with immediate liquidity. Echo is tailored for early-stage funding with a limited investor base, while Legion aims to modernize ICOs by introducing regulatory-compliant fundraising with a reputation-based investor selection system. As regulatory landscapes evolve, these platforms will continue shaping the future of token-based capital formation. It is worth noting that there are also other platforms, such as Buidlpad, which we do not cover in this paper.
Additionally, on January 30, 2025, Kinto declared that "ICOs are back", announcing the launch of its Launchpad on February 18, 2025.
Links
Coinlist:
Echo:
Legion:
Sources
Risk Disclaimer:
insights4.vc and its newsletter provide research and information for educational purposes only and should not be taken as any form of professional advice. We do not advocate for any investment actions, including buying, selling, or holding digital assets.
The content reflects only the writer's views and not financial advice. Please conduct your own due diligence before engaging with cryptocurrencies, DeFi, NFTs, Web 3 or related technologies, as they carry high risks and values can fluctuate significantly.