US Crypto Token Sales: A New Era or Just Another Hype Cycle?

The crypto world is buzzing with the return of token sales in the US, seven years after the initial coin offering (ICO) boom was shut down. Coinbase, a major crypto exchange, has launched a new platform that allows everyday investors to participate in token sales again. This platform is similar to past models, with curated projects and fixed sale windows, but it also introduces some new rules. One of the main differences is that issuers, or the teams behind the projects, are not allowed to sell their tokens on secondary markets for six months after the launch. This is to prevent them from cashing out too early and leaving regular investors holding the bag. Additionally, users who sell their tokens within 30 days of the launch will be given lower priority in future sales. This is an attempt to encourage long-term investment and discourage flipping, or buying and selling quickly for a profit. The first project to be launched on this platform is Monad, a layer-1 blockchain project. The sale will run from November 17 to 22, and allocation will be based on an algorithm that prioritizes smaller purchase requests. Coinbase charges the issuers, not the participants, and frames the entire structure as an "IPO-lite for tokens. " The platform also has some differences from other established platforms, like Binance Launchpad. For example, Binance Launchpad requires users to hold or stake BNB, their native token, to participate in sales. Coinbase, on the other hand, does not have this requirement. Instead, it requires full KYC (know your customer) and account-in-good-standing status, with payment settling exclusively in USDC, a stablecoin pegged to the US dollar. The allocation algorithm on Coinbase also works differently. It fills smaller requests first and progressively allocates larger orders until the supply is exhausted. This is designed to flatten holder distribution and prevent large holders from dominating the sales. However, there are still some risks and uncertainties. The success of the platform depends on regulatory classification and user discipline. US regulators could decide that these offerings constitute unregistered securities sales, despite the structuring. Additionally, if early sales deliver quick multiples, users may be tempted to sell quickly and forfeit future allocation advantages. In conclusion, Coinbase's new token pre-reserve platform is an interesting development in the crypto world. It introduces some new rules and mechanisms to encourage long-term investment and prevent insiders from cashing out too early. However, it remains to be seen whether these measures will be successful in the long run.