Key Takeaways

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

  • The Fair Launch platform is committed to providing fair investment opportunities to address this imbalance, but it still faces structural limitations.

  • Innovative approaches such as offering investment opportunities based on on-chain and off-chain data, and transparent fair launch mechanisms using AI agents are gaining attention.

1. Introduction

Source: rsuthar 94, Dune Analytics

Launchpad platforms like Pump.fun and DAOS.Fun are gaining strong momentum in the cryptocurrency market. They have drawn attention due to high trading volumes and active user participation. Unlike traditional ICOs and IEOs, these platforms adopt fair distribution mechanisms—allowing all users to participate freely from the start of token issuance without needing to sell to capital parties in advance. This model has garnered 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 raising market expectations for more inclusive investment models.

This report will analyze whether the Fair Launch platform 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 the Conflict

The inequality of investment opportunities between retail investors and venture capital institutions has always been a persistent problem in traditional financial markets, and this issue also exists in the cryptocurrency market. Venture capital institutions buy tokens in large quantities 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 their dissatisfaction with the lack of fair investment opportunities.

This issue is corroborated by data. According to Binance Research, the market capitalization (MC)/Fully Diluted Valuation (FDV) ratio of the cryptocurrency market has continuously declined from 41.2% in 2022 to 12.3% in 2024. This indicates that the proportion of tokens circulating in trading is decreasing, while the proportion of locked supply is increasing. Limited supply artificially inflates token prices, benefiting early investors like venture capital. However, when a large amount of locked supply floods the market during the unlocking period, oversupply often leads to a price crash, 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 distribution platforms. These platforms eliminate the risks associated with token unlocking by distributing all tokens upfront, 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 participation in projects.


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 alternative choices 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. In practice, however, 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 that often seize trading opportunities, pushing retail investors to the back. Additionally, some projects disrupt fairness through mechanisms like whitelists, giving priority to specific groups or forming interest groups that provide preferential conditions for insiders. These issues erode the original intent of fair launch platforms. The reality shows that inequality has not been eliminated but merely transformed into another form, making it difficult for retail investors to obtain fair participation opportunities. More worryingly, this model is now repeating at a faster frequency. Since fair issuance platforms often skip the due diligence processes of traditional venture capital, they instead expose retail investors to greater risks, further exacerbating the inequality in investment opportunities.


4. The Deep-Seated 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 limited to the opportunity differences between retail investors and venture capital; it is not just about fairness of opportunities, but more importantly, it threatens the long-term sustainable development of the entire ecosystem.

If a project merely pursues financing, then opening investment opportunities to everyone does make sense. However, a token-based ecosystem should not only focus on raising funds; it needs to grow together with investors and ecosystem participants, continuously creating and developing value. This requires genuine participants who are not only concerned with short-term gains but are also 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 project stability and reliability through preliminary research and due diligence. This explains why some fair launch platforms incentivize vetted participants through early access.

To solve the problem of unequal investment opportunities, it is not enough to simply achieve equal access. The long-term growth and sustainable development of the ecosystem require a structured solution that can identify and incentivize those participants who can make substantial contributions. This is the fundamental challenge that the Web3 ecosystem urgently needs to address.


5. Finding a New Balance: Value-Driven Ecosystem

The current cryptocurrency market is trapped in two extremes: on one side is the absolute equality-seeking fair launch model, and on the other is the traditional model centered around a few seasoned investors. Both models fail to fully reflect the intrinsic values of the Web3 industry. Therefore, we need to shift towards a 'value-driven participant screening' strategy, which identifies and attracts participants who can make significant contributions to the ecosystem, focusing on their value creation capabilities rather than simply considering their capital scale or type of investor. Two recent cases have shown the potential of this new approach.

5.1. Legion: Community Investment Round Platform

Legion is a community-driven investment platform dedicated to screening investors who can create substantial value for the ecosystem. The platform's goals go beyond fundraising, focusing more on 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 party recognition across multiple dimensions. The scoring system is based on investors' actual contribution capabilities to the ecosystem rather than merely considering their financial power. Investors must submit a cover letter and their 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 enhances the credibility of the crypto market while fostering a contribution-focused community ecosystem.

5.2. AI-Pool: An AI Agent-Based Fair Launch Platform

AI-Pool is an experimental fair launch platform based on AI agents, proposed by X user Skely on December 24, 2024. This idea quickly gained 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 remains unclear, as it was reported by a third party. Additionally, the platform is an early, untested experimental project and is not yet stable or reliable. However, the users' ideas are still very promising.

Source: Skely

AI-Pool attempts to address the pain points of existing fair launch platforms through AI agents. Unlike the common centralized operations and insider trading issues prevalent in traditional platforms, AI-Pool uses Trusted Execution Environments (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 by centralized control and insider trading.

Although AI-Pool still faces challenges such as bot interference and liquidity issues, it showcases unique advantages in ensuring the fairness of token issuance and initial distribution, providing new ideas for addressing 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 the opposition between retail investors and venture capital, but this is merely a surface appearance. Whether it is the favoritism of specific groups in KOL rounds or the failure to fully achieve fairness in fair launch platforms, it reveals the deep-seated inequalities present in the market. The innovative practices of Legion and AI-Pool offer new ideas for addressing these issues: Legion screens valuable participants through a comprehensive data evaluation system; AI-Pool enhances process transparency with AI agents. Both projects transcend simple capital investment, showcasing new directions that enhance 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 a collaborative mechanism that promotes positive interactions between investors and project parties. These efforts will lay the foundation for realizing a truly decentralized system.

Original link: https://reports.tiger-research.com/p/fair-launch-platform-eng