Summary of Key Points

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

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

  • Innovative approaches such as providing investment opportunities based on on-chain and off-chain data and using transparent fair launch mechanisms under AI 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 have gained attention for their high trading volume and active user engagement. Unlike traditional ICOs and IEOs, these platforms adopt a fair issuance mechanism—allowing all users to freely participate in investments at the very beginning of token issuance without needing to sell to capital parties in advance. This model has sparked widespread interest by allowing retail investors to participate from the start, share value, and benefit from fair token distribution. 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 and Venture Capital: The Origin of Contradictions

The inequality of investment opportunities between retail investors and venture capitalists has been a persistent issue in traditional financial markets, and this problem also exists in the cryptocurrency market. Venture capitalists buy tokens in bulk at low prices during 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 already risen, deepening dissatisfaction with the lack of fair investment opportunities.

The MC/FDV ratio of tokens issued in 2024 has dropped to its lowest in nearly three years, Source: Binance Research

This issue is supported by data. According to statistics from Binance Research, the market capitalization (MC)/fully diluted valuation (FDV) ratio of the cryptocurrency market has continued to decline from 41.2% in 2022 to 12.3% in 2024. This indicates that the proportion of tokens circulating in the market is decreasing, while the proportion of locked supply is increasing. The limited supply has artificially inflated token prices, benefiting early investors such as venture capitalists. 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.
In this context, retail investors are naturally attracted to fair issuance platforms. These platforms eliminate the risks associated with token unlocking by issuing all tokens at the beginning, 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 Platforms: A True Fair Alternative or Another Form of Imbalance? Fair launch platforms have opened 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 line. But in practice, new forms of inequality and challenges are exposed.

$DRUGS VIP Participant List, Source: DAOS.fun

Taking Pump.fun as an example, the platform faces challenges from automation 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 that provide preferential conditions for insiders. These issues erode the original intent of fair launch platforms. The facts indicate that inequality has not been eliminated; it has merely taken on a different form, making it still difficult for retail investors to obtain fair participation opportunities. Even more concerning is that this model is now reappearing at a faster frequency. Because fair issuance platforms often skip the due diligence phase of traditional venture capital, they expose retail investors to greater risks, further exacerbating the inequality of investment opportunities.

4. Deep-rooted Causes of Investment Opportunity Inequality

Fair launch platforms have not fundamentally solved the issue of unequal investment opportunities. To deeply understand this issue, 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 solely about the fairness of opportunities. More importantly, it threatens the long-term sustainable development of the entire ecosystem.

If a project merely seeks financing, then opening investment opportunities to everyone makes sense. However, a token-based ecosystem should not only focus on raising funds; it needs to grow together with investors and ecosystem participants, continually creating and developing value. This requires genuine participants who are not solely focused on short-term gains but are willing to contribute to the long-term development of the ecosystem.

In this context, the role of venture capital is particularly important. Venture capital not only provides financial support but also brings a wide network of contacts, 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, merely achieving equal access is not enough. The long-term growth and sustainable development of the ecosystem require a structured solution that can identify and incentivize participants capable of making 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 in two extremes: one side pursues an absolute equal fair launch model, while the other centers around a few seasoned investors in traditional models. Neither model 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 capital size or investor type. 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 filtering investors who can create substantial value for the ecosystem. The platform's goal is not just to raise funds but to build sustainable cooperative relationships between project parties and investors.

Sources: Tiger Research, Legion

The core Legion Score system evaluates investors based on multiple dimensions, such as their on-chain activities, social influence, GitHub contributions, and recognition by project parties. The scoring system is based on the actual contribution capacity of investors to the ecosystem rather than just their financial resources. Investors need to submit a cover letter and Legion score, detailing their potential contributions and participation plans, which helps build trust 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 builds a community ecosystem focused on contributions while enhancing trustworthiness in the crypto market.

5.2. AI-Pool: A Fair Launch Platform Based on AI 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. Additionally, the platform is an early, untested experimental project that is not yet stable or reliable. However, the user's ideas remain promising.

Source: Skely

AI-Pool attempts to solve the pain points of existing fair launch platforms using AI agents. Unlike the centralized operations and insider trading issues commonly found in traditional platforms, AI-Pool adopts trusted execution environments (TEE) to achieve process transparency. TEE protects the private keys of AI wallets 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 allocation, providing new ideas for solving the distribution 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 a dichotomy between retail investors and venture capital, but in reality, this is just a facade. Whether it is the KOL rounds that favor specific groups or fair launch platforms that fail to fully realize fairness, they all highlight the deep-rooted inequalities present in the market. The innovative practices of Legion and AI-Pool provide new ideas for addressing these issues: Legion filters valuable participants through a comprehensive data assessment system; AI-Pool enhances process transparency with AI agents. Both projects go beyond simple capital investment, showcasing new directions 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 biases while establishing collaborative mechanisms that promote positive interactions between investors and project parties. These efforts will lay the foundation for a truly decentralized system.