Summary of Key Points

  • The imbalance of investment opportunities between retail investors and venture capital in the cryptocurrency market is an ongoing topic of discussion.

  • Fair Launch platforms strive to provide equitable investment opportunities to address this imbalance, but they still face structural limitations.

  • Innovative methods, such as providing investment opportunities based on on-chain and off-chain data and using transparent fair launch mechanisms under artificial intelligence agents, are gaining attention.

1. Introduction

Source: rsuthar94, Dune Analytics

Launchpad platforms like Pump.fun and DAOS.Fun are experiencing strong momentum in the cryptocurrency market. They are gaining attention due to high trading volumes and active user participation. Unlike traditional ICOs and IEOs, these platforms adopt fair issuance mechanisms—allowing all users to freely participate in investments from the outset of token issuance, without pre-selling to capital parties. This model has attracted widespread attention by enabling retail investors to participate from the beginning, share value, and benefit from the fair distribution of tokens. This trend highlights the long-standing exclusion of retail investors from quality investment opportunities while also raising market expectations for more inclusive investment models.

This report will analyze whether Fair Launch platforms can effectively address the issue of unequal investment opportunities for retail investors and support the sustainable development of the cryptocurrency market.

2. Retail Investors vs. Venture Capital: The Origin of Contradictions

The inequality of investment opportunities between retail investors and venture capital institutions has long been a persistent problem in traditional financial markets, and this issue exists similarly in the cryptocurrency market. Venture capital institutions purchase large amounts of tokens at low prices in the private placement stage and then sell them at higher prices in the public market for profit. This process puts retail investors at a disadvantage, forcing them to enter the market only after prices have risen, deepening dissatisfaction with the lack of fair investment opportunities.

The MC/FDV of tokens issued in 2024 has dropped to the lowest level in nearly three years, source: Binance Research

This issue is supported by data. According to Binance Research, the market capitalization (MC)/fully diluted valuation (FDV) ratio in the cryptocurrency market has continued to decline from 41.2% in 2022 to 12.3% in 2024. This indicates that the proportion of circulating tokens in trading is decreasing, while the proportion of locked supply is increasing. The limited supply artificially inflates token prices, benefiting early investors such as venture capital. However, when a large amount of locked supply floods the market during the unlocking period, oversupply often leads to price crashes, with retail investors bearing the brunt of the losses. Ultimately, the inflated pricing at issuance often results in financial losses for retail investors.

Against this backdrop, retail investors are naturally attracted to fair issuance platforms. These platforms eliminate the risks associated with token unlocks by distributing all tokens at the outset, providing all participants with an equal starting point. This model promotes balanced token distribution and healthier ecosystem development, meeting the demands of retail investors for early project participation.

3. Fair Launch Platform: A Real Fair Alternative or Another Imbalance?

Fair launch platforms have opened up new opportunities for retail investors and positioned themselves as alternatives to traditional investment models. However, whether these platforms truly address the issue of unequal investment opportunities remains controversial. On the surface, they create a fair environment where all participants start on the same starting line. But in practice, new forms of inequality and challenges have emerged.

$DRUGS VIP Participant List, Source: DAOS.fun

Taking Pump.fun as an example, the platform faces challenges from automated tools, such as token generation event (TGE) sniper bots and trend bots, which often seize trading opportunities and push retail investors to the back. Additionally, some projects undermine fairness through mechanisms such as whitelists, prioritizing specific groups or forming interest groups to provide preferential conditions for insiders. These issues erode the original intent of fair launch platforms. The fact is that inequality has not been eliminated; it has just taken on another form, and retail investors still struggle to gain fair participation opportunities. More concerning is that this model is now repeating at a faster frequency. Because fair issuance platforms often skip the due diligence phase of traditional venture capital, retail investors face greater risks, further exacerbating the inequality of investment opportunities.

4. The Deep Causes of Unequal Investment Opportunities

Fair launch platforms have not fundamentally solved the problem of unequal investment opportunities. To understand this issue deeply, we need to examine it from a more essential perspective. This inequality is not just limited to the opportunity differences between retail investors and venture capital; it is not just about the fairness of opportunities but more importantly, it threatens the long-term sustainable development of the entire ecosystem.

If a project is solely focused on fundraising, then opening investment opportunities to everyone does make sense. However, a token-based ecosystem should not only focus on fundraising; it needs to grow together with investors and ecosystem participants, continuously creating and developing value. This requires genuine participants who are not just concerned with short-term gains but are willing to contribute to the long-term development of the ecosystem.

In this context, the role of venture capital becomes particularly important. Venture capital not only provides financial support but also brings a broad network, human and material resources, and verifies the stability and reliability of projects through preliminary research and due diligence. This also explains why some fair launch platforms incentivize vetted participants through early access.

To address the issue of unequal investment opportunities, it is not enough to simply achieve equal access opportunities. The long-term growth and sustainability of the ecosystem requires a structured approach that can identify and incentivize participants who can make substantial contributions. This is a fundamental challenge that the Web3 ecosystem urgently needs to address.

5. Finding a New Balance: Value-Driven Ecosystem

The current cryptocurrency market is caught between two extremes: one pursuing absolute equality through fair launch models, and the other centered around a few seasoned investors in traditional modes. Neither of these models fully reflects the intrinsic value of the Web3 industry. Therefore, we need to shift towards a 'value-driven participant selection' strategy, which identifies and attracts participants who can make significant contributions to the ecosystem, focusing on their value creation capabilities rather than simply considering the scale of capital or type of investors. Recent emerging cases showcase the potential of this new thinking.

5.1. Legion: Community Investment Round Platform

Source: Legion

Legion, as a community-driven investment platform, is committed to selecting investors who can create substantial value for the ecosystem. The platform's goals extend beyond raising funds; it also emphasizes building sustainable cooperative relationships between project parties and investors.

Source: Tiger Research, Legion

The core Legion Score system of the platform comprehensively evaluates investors' on-chain activities, social influence, GitHub contributions, and project recognition, among other multidimensional data. The scoring system is based on investors' actual contribution capabilities to the ecosystem, rather than just their financial capacity. Investors are required to submit a cover letter and Legion score, detailing their potential contributions and participation plans, which helps establish a trust bond with project parties. This approach not only enhances the fairness of investment opportunities but also promotes deep interaction between project parties and investors. Legion is pioneering a new investment model that, while enhancing the credibility of the crypto market, is building a community ecosystem focused on contributions.

5.2. AI-Pool: Fair Launch Platform Based on Artificial Intelligence Agents

AI-Pool is an experimental fair launch platform based on AI agents, proposed by user Skely on December 24, 2024. The idea quickly garnered attention and spread within hours. Many investors injected funds into the project, raising over $5 million. Note: Skely's account was suspended due to false account reports. The specific reason is unclear, as it was reported by a third party. Furthermore, the platform is an early, untested experimental project and is not yet stable or reliable. However, the user's idea remains promising.

Source: Skely

AI-Pool attempts to address the pain points of existing fair launch platforms through AI agents. Compared to traditional platforms, which often face issues of centralized operation and insider trading, AI-Pool uses Trusted Execution Environment (TEE) to achieve process transparency. TEE protects the AI wallet's private keys and ensures the autonomous operation of AI agents, effectively reducing the unfairness brought about by centralized control and insider trading.

Although AI-Pool still faces challenges such as bot interference and insufficient liquidity, it demonstrates unique advantages in ensuring fairness in token issuance and initial distribution, providing new ideas for addressing the inequities of centralized platforms. With further technological improvements, AI-Pool is expected to become a model for enhancing trust and transparency in the cryptocurrency market.

6. Conclusion

The issue of unequal investment opportunities in the crypto market is often simplified to the conflict between retail investors and venture capital, but in reality, this is just a surface appearance. Whether it is the KOL rounds that favor specific groups or the fair launch platforms that fail to fully achieve fairness, they all reveal the deep-rooted inequalities present in the market. The innovative practices of Legion and AI-Pool provide new ideas for addressing these issues: Legion screens valuable participants through a comprehensive data evaluation system; AI-Pool enhances process transparency through AI agents. Both projects go beyond simple capital investment, showcasing a new direction for enhancing ecosystem trust and sustainability.

The core value of the Web3 industry lies in creating equal opportunities and a fair environment for all participants through decentralization. To achieve this goal, we need to build a balanced ecosystem that eliminates bias while establishing a collaborative mechanism that promotes positive interactions between investors and project parties. These efforts will lay the foundation for realizing a truly decentralized system.