TLDR
- Coinbase is launching a new token sale platform that will host approximately one token sale per month, starting with blockchain startup Monad next week.
- The platform requires purchases to be made in USDC stablecoin and only allows verified users who have completed identity checks to participate.
- Project teams and affiliates are prohibited from selling their tokens for at least six months after the public sale to prevent insider dumping.
- Token allocations will be determined by an algorithm rather than first-come, first-served, with investors submitting requests during one-week windows.
- This marks the first broad opportunity for U.S. users to participate in public token sales since 2018, with built-in protections to avoid the problems that plagued the 2017-2018 ICO boom.
Coinbase is bringing back public token sales with a new platform designed to fix the chaos of 2017.
The crypto exchange announced it will host about one token sale per month starting next week. Blockchain startup Monad will be the first project to offer tokens through the system.
The platform comes with protections that didn’t exist during the initial coin offering craze six years ago. Back then, projects raised billions from retail investors with little oversight. Many collapsed or turned out to be frauds.
Coinbase shares jumped 4% in morning trading after the announcement.
The new system uses an algorithm to distribute tokens instead of a first-come, first-served approach. Investors will submit purchase requests during one-week windows. The exchange says this creates a more equitable allocation.
Only verified users in good standing can participate. All purchases must be made using Circle’s USDC stablecoin.
Mandatory Six-Month Lockup Period
The platform includes a hard rule for project teams. They cannot sell any tokens for at least six months after the public sale. This applies to private sales and exchange-based transactions.
The lockup aims to prevent the insider dumping that hurt retail investors during the last ICO wave. When project founders could sell immediately, token prices often crashed shortly after launch.
Coinbase will vet projects before listing them. The exchange will look at user interest, the team’s track record, and token structure. This includes checking how tokens are distributed and how long different allocations remain locked.
The platform will be available in most global regions. Coinbase plans to expand access over time.
Initial coin offerings peaked in 2017 and 2018. Crypto projects raised billions by selling tokens directly to the public. Some developed functioning networks. Many did not.
Platform Features Coming Soon
The exchange is planning to add more features in coming months. These include limit orders and higher allocations for issuers’ target user bases.
The Wall Street Journal first reported the launch. According to their report, this represents the first broad opportunity for U.S. users to participate in public token sales since 2018.
The ICO model fell out of favor after regulators raised concerns about investor protection and disclosure requirements. Platforms like Coinbase stayed away from the space for years.
Coinbase said token issuers currently struggle to get their tokens into users’ hands while building exchange liquidity. The company positions this platform as a solution to that problem.
The algorithm-based allocation system attempts to balance demand with fair distribution. Purchase requests will close after one week for each sale.
Circle Internet Group issues the USDC stablecoin that will serve as the only payment method. The dollar-pegged token provides price stability during the purchase process.
Monad’s token sale next week will test the new platform’s systems and protections.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
