On January 26, 2026, Coinbase CEO Brian Armstrong publicly criticized the existing IPO system on social media, stating that this process is “using a fax machine in the digital age,” and predicted that in the future, companies will complete financing and listing through on-chain IPOs. This statement directly addresses an old issue: private capital and Wall Street have long controlled the entry to public listings, keeping ordinary investors locked out of the early stages of wealth appreciation. More strikingly, the industry's general expectation for on-chain IPOs suggests that if financing costs can be reduced by 50%-80%, the rules of the capital market will be rewritten. Armstrong's prophecy is not just a technical route dispute but questions a core proposition: should the financing infrastructure in the digital age continue to obey the power structure of the paper age?
Retail Investors Locked Out: The Invisible Barriers of IPOs
● The long private placement phase before an IPO is often only open to institutions and high-net-worth individuals, allowing companies to achieve valuations that multiply several times, or even dozens of times, during the private placement period, with the vast majority of profits being divided up before hitting the exchange. When ordinary investors finally see this ticker in the public market, they often face high valuations and limited growth potential, only able to take over already finely packaged chips under the “listing halo.”
● From the perspective of “the monopoly of private capital and the imbalance of public investors' rights,” the current IPO rules inherently create asymmetric opportunities: the rhythm of information disclosure is dominated by investment banks and corporate discourse, and allocation resources are prioritized for institutions with dense relational networks. Ordinary investors not only lack early participation channels but also passively bear risks due to information lag and lack of pricing power; this structural arrangement itself constitutes a form of institutionalized selection.
● At the same time, the volatility risks in both traditional and crypto markets are continuously amplified: reports mention that a single whale lost $51.17 million in the traditional market, and the probability of Bitcoin's short-term decline on Polymarket was bet at 60%. These cases imply that ordinary people are more passively gambling in a high-volatility, information-noise-heavy secondary market, rather than sharing growth dividends in early, relatively controllable price ranges, with the attribute of taking over being greater than value sharing.
● It is this structural injustice that forces the crypto industry to reflect: if the liquidity, price discovery, and settlement capabilities on-chain have matured, why continue to use a listing process designed for paper contracts and closed roadshows? When Armstrong proposed the on-chain IPO prophecy, he was not only supporting the narrative for Coinbase and public chains but also responding to a real pressure— the crypto world needs a new financing and listing path that matches its own tech stack.
Armstrong's On-Chain Prophecy and the “Fax Machine” Moment
● In Armstrong's vision, “on-chain IPO” is not a single function but a system that operates entirely on the public chain from fundraising, distribution to secondary trading. Companies can issue tokens representing equity or revenue rights on-chain, fundraising is completed through on-chain subscriptions, distribution is automatically executed by smart contracts, and then immediately enters on-chain liquidity pools or trading platforms, naturally forming a continuous price discovery curve, rather than being segmented into several discrete stages by traditional roadshows and book-building mechanisms.
● He described the current IPO mechanism as “using a fax machine in the digital age,” pointing not only to the outdated communication method but also to the slow rhythm of information disclosure, lengthy processes, and lagging settlement cycles of this entire old infrastructure. Updates to prospectuses rely on repeated revisions by human and legal teams, roadshow information circulates within limited circles, and settlement and clearing must be completed within a T+ multi-day window, all of which sharply contrasts with the near-real-time accounting, broadcasting, and clearing on-chain.
● The industry generally estimates that if on-chain IPOs can be realized, they are expected to reduce financing costs by 50%-80%. This compression mainly comes from two ends: first, intermediary fees from investment banks, law firms, and registration and settlement companies can be partially replaced by smart contracts and on-chain registration; second, a large amount of repetitive verification and manual review in compliance processes can be automated through RegTech tools and on-chain audits, allowing more capital to flow to the projects themselves rather than to process maintainers.
● However, it is worth emphasizing that there are currently no specific technical solution details or any timeline in the public information. We do not know which public chain the on-chain IPO will be based on, how it will interface with existing securities laws, or how KYC and equity registration will synchronize. In factual terms, this remains a vision narrative rather than a set roadmap. Armstrong provides a sense of direction but intentionally avoids details about timing and pathways, which is both a strategic choice and a response to the current regulatory uncertainties.
From Meme Coins to On-Chain Equity: Liquidity is Already in Place
● Alon, the founder of Pump.fun, mentioned that Meme coins in the Solana ecosystem have already proven the astonishing liquidity aggregation ability of on-chain native assets. A story, an image, and a simple issuance script can attract massive funds and users in a short time, completing a process similar to a “cold start IPO.” Although these assets lack stable cash flow and corporate governance structures, they have technically established an on-chain closed loop of “issuance—distribution—immediate trading.”
● Correspondingly, prediction markets are also demonstrating the appeal of on-chain and quasi-on-chain markets. Research reports show that Kalshi's open contracts grew by 400% within six months, indicating that users are willing to bet their funds in a more transparent, near-real-time information flow environment, expressing their judgments on event outcomes and hedging risks through prices. The two core functions of traditional finance—price discovery and risk management—are being rapidly reconstructed by new markets, and they fundamentally belong to the same infrastructure issues as on-chain IPOs.
● On the other hand, incidents such as attacks on multi-chain contracts are continuously occurring, exposing obvious shortcomings in DeFi's security. The composability of underlying contracts, while amplifying the speed of innovation, also magnifies systemic risks; for high-value targets like on-chain IPOs, the security threshold will be much higher than that of current Meme coins and derivative protocols. As long as the cost of attacks is far lower than the potential profit space, large-scale compliant equity on-chain will struggle to gain the trust endorsement of regulators and institutions.
● Connecting these fragmented cases reveals a clear narrative: the funding and speculative forces on-chain are already in place, and the basic conditions for “issuance and trading” are technically ready, but the current mainstream product forms still remain in Meme coins and prediction contracts. Armstrong's on-chain IPO prophecy essentially calls for: it is time to move this infrastructure from “jokes and gambling” to the equity level that represents real production relationships and cash flows.
The Game Between Regulation and Wall Street: Will the Fax Machine Be Torn Down?
● From a RegTech perspective, if on-chain IPOs are to be accepted by regulators, they must achieve “compliance automation” in key areas such as KYC, anti-money laundering, and information disclosure. Technically, this means: user identities are mapped to verifiable credentials on-chain after completing KYC off-chain; anti-money laundering rules are automatically triggered by smart contracts during fund transfers; information disclosure materials and key operational data are written on-chain in an immutable form, allowing regulators to examine issuer behavior from a near-real-time perspective rather than relying on lagging quarterly and annual reports.
● However, so far, major regulatory agencies have not publicly stated a clear position on the specific concept of “on-chain IPOs,” and research reports clearly indicate that any speculation about timelines or specific positions falls outside the realm of conjecture. One thing is certain: regulators will not yield to technological narratives but will require technology to adapt to existing or evolving legal frameworks, which will keep on-chain IPOs in a state of pilot, sandbox, and localized experimentation for a long time.
● If financing costs are truly compressed by 50%-80%, the interests of traditional investment banks, exchanges, law firms, and other intermediaries will be the first to be affected. Roadshow underwriting fees, listing review fees, compliance consulting fees, and settlement service fees constitute their revenue pillars; if many links are replaced by smart contract processes, Wall Street's reaction cannot simply be “watching.” From lobbying regulators, emphasizing investor protection, to launching their own “on-chain compliance solutions” in an attempt to incorporate new channels into existing systems, they will likely seek a new profit balance between resistance and self-rescue.
● The attitude of political capital is also subtle. The report mentions that the Trump family reportedly holds about $500 million in crypto assets, indicating that when some power elites are deeply invested, their behavior incentives in regulatory and institutional design are no longer unidirectional “suppression.” On one hand, they may remain cautious about radical models for the sake of maintaining financial stability and traditional allies; on the other hand, when personal or family assets are highly tied to the on-chain world, their tolerance and imaginative space for on-chain infrastructure will also increase, leaving gray areas for on-chain IPOs in future political games.
Speculations on the Endgame of On-Chain IPOs: Redistribution of Financing Power
Armstrong's prophecy points to a triple rearrangement of financing power: first, the entry threshold for retail investors is redefined, allowing ordinary investors to participate in corporate growth at earlier stages and under more transparent rules; second, the cost structure of issuance is compressed and restructured, with more capital flowing to the projects themselves rather than to intermediary networks; third, the global capital flow paths are rewritten, allowing funds to flow across borders on on-chain infrastructure without solely relying on local investment banks and exchanges' permissions. This is not simply about “moving IPOs on-chain,” but about rewriting the underlying logic of who can participate, who sets prices, and who profits.
From the current progress, the validation of technology and liquidity has been continuously advanced in Meme coins, prediction markets, and various DeFi protocols; the issuance and trading on-chain are no longer a challenge. The real resistance comes from security, regulatory adaptation, and the inertia of vested interest structures, which determines that on-chain IPOs will not be a sprint but a long game spanning multiple cycles. There will be localized experiments, failed cases, and even regulatory backlash along the way, and the industry needs to find a sustainable balance through trial and error.
A more realistic route may not be “a sudden explosion of on-chain securities,” but rather a gradual transition from prediction markets to Meme coins, and then to pilot projects of compliant tokenized assets for restricted groups, layer by layer bringing price discovery, risk hedging, and rights expression on-chain, ultimately transitioning to comprehensive on-chain securities issuance. At that time, we may no longer cling to the traditional term “IPO,” but discuss a brand new financing infrastructure defined by code.
When the true on-chain IPO first appears, it may not be perfect and may even be full of controversy. But for every participant in the present, the question is already laid out: at that moment, will you be an early participant or yet again a bystander locked out?
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