Author: Hatu Sheikh, Founder of Coin Terminal
Cryptocurrency has largely let retail investors down. Insiders and institutions have seized lucrative opportunities before projects hit the public market. Meme coins and purely speculative trading have become the only way for retail investors to regain market share.
They remain exposed to the "criminal supercycle" that began with the unregulated Initial Coin Offerings (ICOs) of 2017-18. At that time, Initial DEX Offerings (IDOs) emerged, providing retail investors with a public and fair way to access early projects. However, high entry barriers, long lock-up periods, and information asymmetry have gradually made most IDOs out of reach for retail investors.
IDOs are, in principle, dead. But they will thrive—surviving longer than ever—by ensuring long-term growth and sustainable income for retail investors. Moreover, IDOs will become the most viable and preferred way for grassroots users to build generational wealth.
Retail investors come to the crypto world with dreams, from permissionless trading to fractional ownership. For the first time in global economic history, the unbanked and marginalized have a real opportunity to achieve financial freedom.
However, they face a continuous stream of fraudulent projects and fundraising scams. During the so-called ICO boom, they lost over $16 billion while trying to buy the "next best project."
IDOs promise to address this issue. They protect crypto fundraising through strong investor protection measures, such as rigorous pre-listing due diligence. Solid teams and realistic roadmaps have become prerequisites for projects.
Most importantly, IDOs introduce token staking, ensuring more alignment of interests between projects and investors. It provides a safeguard against pump-and-dump scams. On the other hand, higher staking benchmarks tilt the balance in favor of institutions. Retail investors are once again excluded.
Token staking has a dual negative impact on IDOs. Retail investors have limited opportunities, and there is a cold start problem from a liquidity perspective. Given that 64% of retail investors are willing to inject liquidity into early projects, this creates a vicious cycle.
There is a reason why cryptocurrency thrives on crowdfunding. Whales can only push the industry so far. If IDOs cannot deliver on the promise of large-scale bottom-up financial empowerment, they will inevitably sink into irrelevance. The entire cryptocurrency industry will follow suit.
It is not too late. IDOs can turn the tide and have a bright future. The key is to remain true to their retail-first origins. Ensuring fair launches and equal opportunities is crucial.
This shift has already begun. A new generation of IDO launch platforms does not require investors to lock up funds. Anyone can start investing in early projects with as little as $100 (or even less), opening the field to both small and institutional investors.
Furthermore, innovative launch platforms offer unprecedented features, such as refunds, allowing investors to opt out of their positions—because choice is, after all, one of the most critical aspects of freedom.
In addition to giving investors control over their funds, emerging launch platforms also ensure transparency and rigorous scrutiny. As a result, only high-quality projects get listed, providing investors with low-risk long-term growth opportunities with even lower entry barriers.
This retail-friendly approach effectively addresses both security and liquidity issues. It also focuses on early fundamentals, prioritizing real value over pure speculation. It creates a fair competitive environment where both first-time investors and institutions can thrive.
IDOs have entered the next evolutionary stage. Investing in early crypto projects is no longer a zero-sum game where those with deep pockets gain excessive and unfair returns.
With increasing democratization—and a willingness to promote a truly elite system—this field is finally aligning with the foundational principles of cryptocurrency.
Overall project assessments based on market narratives, product-market fit, revenue distribution channels, token utility, and community growth are becoming the norm. Flashy white papers and promotional materials no longer work. The threshold for fraud has been raised. The barriers to investing in these well-assessed projects are much lower.
Demand and supply are reaching a balance. Moreover, this does not compromise intrinsic value. It is a return to fundamentals, in the truest and broadest sense of the term.
Innovative launch platforms are saving IDOs. They are raising standards and setting new benchmarks for retail-led fundraising in cryptocurrency. The next step, though the most crucial one, is for the platforms in this field to embrace the prompt and subscribe to this transformation on a large scale.
IDOs have never been closer to fulfilling their promise to retail investors. However, they have also never been so far away. This is a turning point.
From here on, retail investors will decide the future of IDOs and cryptocurrency. They will either join in large numbers or exit forever. The work of innovators is clear—this time it is for real.
Author: Hatu Sheikh, Founder of Coin Terminal.
Related: Traders point out: Buying Bitcoin (BTC) years ago is now also difficult to get rich
This article is for general informational purposes only and is not intended and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Original article: “Opinion: Retail Investors Can Reclaim the Promise of Cryptocurrency Through IDOs”
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