Coinbase (COIN) is introducing a brand new token sale platform that goals to reboot public crypto choices with protections designed to stop the issues that plagued the 2017-2018 preliminary coin providing (ICO) growth.
The brand new platform will host roughly one token sale monthly, based on a Monday press launch and buyers might want to submit buy requests throughout a one-week window for every sale. After that, an algorithm will decide how the tokens are distributed, aiming to keep away from a first-come, first-served system and as a substitute create what Coinbase describes as a “broad and equitable” allocation.
The preliminary providing comes subsequent week from layer-1 blockchain startup Monad, mentioned the corporate.
Token purchases have to be made utilizing Circle’s (CRCL) stablecoin, USDC, and solely customers in good standing who’ve accomplished identification verification and compliance checks will be capable of take part. The platform might be obtainable to customers in most world areas, with plans to develop entry over time.
In a nod to the failures of previous ICOs — which noticed billions raised by initiatives that always had no functioning product or oversight — Coinbase mentioned it has inbuilt a number of investor-protection mechanisms. For instance, challenge groups and affiliated events might be blocked from promoting any of their tokens for at the least six months after the general public sale. This restriction applies to each non-public and exchange-based gross sales.
Coinbase will even vet initiatives earlier than permitting them to listing, assessing standards corresponding to person curiosity, the founding workforce’s observe report, and token construction, together with how tokens are distributed and the way lengthy they’re locked up.
ICOs reached a peak in 2017 and 2018, when crypto initiatives raised billions of {dollars} by promoting tokens on to the general public. Whereas some initiatives went on to develop functioning networks, many collapsed or have been uncovered as frauds, drawing scrutiny from regulators and prompting platforms like Coinbase to avoid the mannequin.
By automating allocation and imposing post-sale restrictions, Coinbase’s new method could characterize a reset for public token gross sales, this time with extra oversight.
