MT Capital Research Report: Fair Launch, a Profound Change in Token Issuance Methods
Without relying on platform tokens or investors, the earliest participants completed the project's investment, distribution, marketing, and evangelism.Author: Xinwei, Ian
TL;DR
In recent years, the blockchain industry has undergone tremendous changes, particularly with significant innovations in token issuance methods. From the initial simple ICOs to complex DeFi structures, and now to Fair Launch and community-driven models, these transformations have not only reshaped the landscape of asset distribution but also attracted widespread attention from market participants. Next, we will delve into several representative projects, each showcasing unique token issuance methods that reflect the innovation and progress in this field.
This article analyzes several key projects, from the retail-driven model of Ordinals, to the incentive innovations of Blast, to the emphasis on fairness by ZKFair, to the innovative distribution methods of Analysoor, and finally to Binance's Fair Mode redefining token economics. These projects not only demonstrate the diversity of the cryptocurrency ecosystem but also reflect the growing demand for transparency and fairness in the market.
Ian, Investment Director at MT Capital, stated: "#BRC20, #Blast, #ZERO, #ZKFair and other projects are experiments where we witness a great innovative approach—fair distribution for everyone. They do not rely on platform tokens or investors; the earliest participants completed the investment, distribution, marketing, and evangelism of the project. This is similar to liquidity mining during DeFi Summer, where the project's own liquidity incentives created prosperity across the entire chain. Fair distribution greatly enhances the enthusiasm of community participants, reaching unprecedented heights."
Ordinals
The rise of Ordinals is reminiscent of the previous DeFi Summer, with the core concept being Fair Launch. This idea was very popular during the DeFi Summer, primarily referring to projects not retaining any shares during the initial token distribution. For example, Yearn (YFI) founder Andre Cronje claimed he did not conduct pre-mining, retain tokens, or notify insiders in advance, which greatly enhanced his reputation and brought significant TVL to Yearn.
However, as DeFi Summer gradually came to a close, the market witnessed an increasing number of projects emerging, and the entire cryptocurrency ecosystem became more mature. During this period, capital began to enter the market, initiating a VC-driven project launch model. In this model, projects with large funding amounts and high-profile investment institutions are more likely to attract market attention. This also gave rise to some users who primarily rely on "farming" for survival and ordinary retail investors eager for airdrops from star projects.
Against this backdrop, the emergence of Ordinals brought about new changes. It is seen by some as "the world of retail investors," as all chips are completely minted by retail participants. Although Ordinals has been criticized by some as merely having meme coin attributes and lacking long-term practical application scenarios, it provides more opportunities for retail investors. As more Ordinals projects are born and complete their asset issuance phases, the Bitcoin ecosystem is expected to enter a new phase of application development.
https://geniidata.com/ordinals/index/brc20
Blast
Since its launch on November 21, Blast has quickly become the focus of the cryptocurrency market, showcasing its innovation and appeal in the Layer2 network space.
Blast is a Layer2 network launched by Pacman, the founder of Blur. Based on Optimistic Rollups technology, Blast is compatible with Ethereum, providing developers and dApps with convenient access. The rapid growth of Blast's TVL and user numbers is quite remarkable, with Blast's TVL now reaching $1 billion.
Additionally, Blast has completed a $20 million funding round with participation from Paradigm and Standard Crypto.
One of the main ways Blast attracts users and developers is through airdrops and incentive mechanisms. According to the plan, an airdrop will take place in May 2024, aimed at rewarding early members and developers. Users can earn points by depositing assets and inviting new users to join the Blast L2 network, which will directly affect the amount of airdrop they receive, incentivizing user participation and promotion.
The core appeal of Blast lies in its combination of staking mining and additional rewards. Users can earn staking rewards by depositing funds into Blast and staking with Lido on the Ethereum mainnet, while also receiving additional rewards from Blast. The fundamental goal of this strategy is to increase TVL and attract more users to participate in order to earn extra Blast rewards. Blast's success relies on its innovative Layer2 solution and incentive mechanisms that attract users and developers.
https://dune.com/0xramen/blast-stats
ZKFair
ZKFair (ZKF) is an innovative project based on Ethereum, focusing on establishing a fair and community-driven Layer2 network. As the first ZK-Rollup on Ethereum utilizing Polygon CDK and Celestia DA technology, ZKFair's core goal is to lower the high entry barriers for users in the current Layer2 network landscape. In the current market environment, many ZK-L2 projects are VC-led and highly valued, making it difficult for ordinary users to gain substantial returns. These projects also encourage users to pay high transaction fees, but token incentives are distributed slowly, which is not friendly to ordinary users.
ZKFair aims to change this situation by creating a fair launch, community-driven network. This network is not only technologically advanced but also supported by Lumoz RaaS. The project's native token $ZKF adopts a 100% fair launch method, with no shares reserved for investors, pre-subscribers, or early miners. All tokens are planned to be airdropped to the community after the mainnet launch, with a total supply set at 10 billion, of which 7.5 billion will be used for gas fee airdrops, and the remaining 2.5 billion for community users.
ZKFair's appeal lies in its unique market positioning and distribution strategy. Market analysis generally views its opening potential positively, expecting it to achieve 5-10 times appreciation. By using stablecoin USDC as gas, combined with a low market cap and novel chip distribution model, this project offers investors an attractive narrative and a fair distribution mechanism. Regarding token acquisition, the rules state that addresses that have interacted with platforms such as zkSync, Scroll, ZKSpace, Polygon EVM, and Linea within a specific timeframe are eligible for airdrops. Additionally, the project has specified detailed processes and restrictions for burning gas to obtain ZKF tokens, as well as strategies for quickly consuming gas through interactions with Dapps.
Analysoor
Analysoor is the first Meta Protocol on the Solana chain, introducing an innovative method for creating and distributing NFTs and tokens. Its core is using block hash values as random number generators, selecting a winner for each block, effectively offsetting the impact of bots during the $ZERO and Index ONE NFT minting process.
Analysoor's fair issuance mechanism emphasizes fairness and liquidity orientation, with no presales, whitelists, team allocations, or gas fees paid for early trades. This means every participant starts on the same starting line, and differences in funding amounts do not affect minting competition. Minting fees do not flow to the project or miners but are used to increase liquidity, supporting the ecosystem and community.
Analysoor is building a strong community consensus, and its value and potential are being recognized by more and more people. Developers are also working hard to adopt more innovative methods to combat potential bot behavior, ensuring the long-term maintenance of fairness, where AI algorithms and machine learning will play an important role.
Compared to other mainstream Launchpad projects on public chains, Analysoor's current market cap may be underestimated. Considering that there is currently no leading Launchpad protocol in the Solana ecosystem, Analysoor has the potential to become that role and achieve significant value growth in the future.
The market's demand for fairness and transparency is growing, and the Fair Launch mechanism is expected to become a trend. Especially on high-performance public chains like Solana, 2024 may be a year of explosion for Meta Protocols. As a pioneer of Fair Launch on the Solana chain, Analysoor has immense potential and a strong vision, possibly expanding into a multifunctional Launchpad in the future.
Fair Mode
Binance's recently launched Launchpool model "Fair Mode" represents a significant innovation in the token economic system. The core of this model lies not only in the projects themselves but also in rethinking the token economic system, aimed at promoting the long-term healthy development of projects. Fair Mode introduces a long-term development fund accounting for 27%, which cannot be consumed or sold, will not enter market circulation, but will be used for staking and participating in the ecosystem, supporting the project's continuous growth. Additionally, this model has fairly distributed up to 21% of tokens to retail investors in its 25% initial circulation, including Binance launchpool and airdrops, which not only increases the community's influence in project decisions but also stimulates their willingness to collaborate with project parties.
By increasing the initial circulation and reducing future unlock amounts, Fair Mode reduces selling pressure in the market, laying a foundation for the long-term stability of token value. At the same time, by lowering the token share of teams and investors, this model reduces their ability to manipulate the market, helping to maintain the healthy value of tokens. By introducing Fair Mode, Binance demonstrates its profound understanding of the industry and may lead a new trend in the innovation of token economic systems. This model emphasizes the rationality and fairness of token distribution, which is expected to become an important factor in promoting the advancement of blockchain technology and token economics as a whole.
https://twitter.com/heyibinance/status/1737813180141666324
Conclusion
In summarizing this brief Insight, we can see the significant evolution and innovation in token issuance methods within the blockchain field. From the initial ICOs to DeFi, and now to Fair Launch and community-driven models, these changes have not only redefined the way assets are distributed but have also attracted widespread attention from the market. Specific projects such as Ordinals, Blast, ZKFair, Analysoor, and Binance's Fair Mode, which continuously adopt fair distribution models, have received positive feedback from the market and major players. The successful attempts of these projects not only showcase the diversity and maturity of the cryptocurrency ecosystem but also emphasize the importance of community participation and fair issuance in the future development of blockchain technology. With the advancement of these innovations, the blockchain industry is expected to continue playing an important role in the global financial and technological landscape, opening up new possibilities for future development.
MT Capital
MT Capital, headquartered in Silicon Valley, is a crypto-native fund focused on Web3 and related technologies. We have a global team with diverse cultural backgrounds and perspectives, allowing us to gain deep insights into the global market and seize investment opportunities in different regions. MT Capital's vision is to become a leading blockchain investment firm globally, focusing on supporting early-stage technology companies that can create significant value. Since 2016, our portfolio has covered various fields, including Infra, L1/L2, DeFi, NFT, and GameFi. We are not just investors but also driving forces behind founding teams.
Official website: https://mt.capital/
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