ICOs are back: What crypto-native teams need to know
ICOs are back. And they work now.
Originally published on Paragraph: https://blog.tally.xyz/icos-are-back-what-crypto-native-teams-need-to-know
The market has spoken
If you’ve been watching the token launch landscape, you’ve noticed the shift. After years of airdrops, private SAFTs, and convoluted points programs, public token sales are making a serious comeback, and it’s nothing like 2017.
MegaETH raised $50M in minutes with 27x oversubscription. Plasma pulled in $500M when they’d planned for $50M. Monad brought ICOs back to U.S. retail with Coinbase’s new token launch platform, drawing 85,000 participants. Uniswap has launched a new Continuous Clearing Auction model powering Aztec’s ICO. This isn’t an anomaly, it’s a signal.
ICO infrastructure has matured. The regulatory picture is clearer. And perhaps most importantly, the market is hungry for legitimate ways to participate in protocol upside beyond hoping for an airdrop.
Why now?
Three things have converged:
Regulatory thaw: We’re not in 2018 anymore. Coinbase acquired Echo/Sonar for $375M and launched a regulated token sale platform and Brian Armstrong is publicly announcing U.S. retail can participate in compliant token sales for the first time since the SEC crackdowns. MiCA provides a framework for Europe and the CLARITY Act working its way through Congress could finally give U.S. projects a clear path forward. The legal landscape isn’t perfect, but it’s workable.
Airdrop fatigue: Let’s be honest, airdrops have become a mess. Sybil attacks, mercenary farmers, communities that evaporate after the claim. Projects are realizing that people who pay for tokens often care more than people who game criteria for free ones. The shift away from airdrops toward structured token sales reflects a hard-won lesson.
Distribution matters: After watching governance concentrate in VC and insider hands, there’s renewed appetite for broad, fair token distribution. A well-run ICO can put tokens in thousands of wallets from day one, creating a genuine stakeholder base rather than a cap table masquerading as a community.
What’s different this time
The 2017 playbook was simple: deploy a contract, take ETH, hope for the best. The 2025 playbook is far more sophisticated:
Fair allocation mechanisms: MegaETH weighted allocations by on-chain activity and ecosystem alignment. Coinbase’s platform prioritizes smaller bids over whales. Projects are actively designing against the “VCs eat first” dynamic that poisoned previous cycles.
Anti-flipper measures: Coinbase will penalize wallets that dump immediately by restricting future sale access. MegaETH offered U.S. buyers a 10% discount for accepting a 1-year lockup. The goal is filtering for believers, not speculators.
Team alignment: Founders are taking smaller allocations (MegaETH’s team kept just 9.5%) and accepting meaningful lockups. Teams are recognizing that community trust is worth more than extra tokens.
Compliance by design: KYC/KYI is standard. Geo-restrictions are handled programmatically. Vesting schedules are enforced on-chain. The “move fast and break things” approach has been replaced by “move deliberately and stay out of court.”
The honest trade-offs
It’s not all upside.
Oversubscription is a double-edged sword: “27x oversubscribed” sounds great until you realize most of your community got tiny allocations or nothing at all. MegaETH’s token traded at 4x ICO price before distribution; great for winners, frustrating for everyone else. Managing community expectations around scarcity is genuinely hard.
Regulatory risk hasn’t disappeared: It’s lower, but it’s not zero. Most projects still exclude the U.S. or specific states. Even Coinbase’s platform couldn’t take New York residents. Until legislation like the CLARITY Act passes (or doesn’t), there’s residual uncertainty. As a16z’s Miles Jennings has noted, public sales in the US remain risky without clear regulatory frameworks.
Execution is non-trivial: MegaETH had a “multisig chaos” issue that required refunding deposits. Handling thousands of participants in real-time, across jurisdictions, with compliant KYC, is operationally complex. This isn’t something to DIY.
Market timing still matters. Monad launched as BTC cooled from $110k to $92k. The sale was 1.4x oversubscribed, respectable, but not the frenzy MegaETH saw. You can’t fully control external conditions.
When an ICO makes sense
Not every project needs a token sale. But it’s worth serious consideration if:
Your protocol has genuine token utility: Governance, staking, fee sharing, access rights; the token should do something meaningful in your system, not just exist for speculation.
You want broad distribution from day one: If concentrated ownership is a governance risk for your protocol, a public sale can establish a decentralized holder base that airdrops often fail to create. Plasma’s sale included over 1,100 wallets with a median contribution of ~$35k.
You’re ready for community accountability: Token holders are vocal stakeholders. They’ll be in your Discord, questioning your roadmap, reacting to every delay. If you’re not ready for that level of transparency, wait.
Traditional fundraising doesn’t fit your model: If VCs want terms that conflict with your decentralization goals, or if you want capital without giving up equity, an ICO offers a different path.
You have the operational capacity to execute: This is more than just smart contracts, it’s legal structuring, KYC integration, community comms, exchange coordination, and post-sale governance setup.
The full stack problem
Here’s what teams often underestimate: a token sale is just the beginning. You also need:
Token design that aligns with your protocol’s economics.
Compliance infrastructure for KYC/KYI and jurisdiction management.
Sale mechanics that match your goals (fixed price, auction, LBP).
Vesting and lockup enforcement that’s transparent and on-chain.
Governance infrastructure so token holders can actually participate.
Treasury management for the funds you raise.
Staking and rewards if that’s part of your model.
Ongoing operations as your protocol evolves.
Most teams cobble this together from multiple vendors, custom contracts, and hope. That’s how things break.
Where Tally fits
Tally has been building this infrastructure for years, not for ICOs specifically, but for the full lifecycle of token-governed protocols. We power governance for over $1B in assets, including Arbitrum, zkSync, and Wormhole. We’ve handled token distribution, staking, vesting, and treasury operations at scale.
The ICO resurgence isn’t changing what we do, it’s expanding when we get involved. Instead of coming in post-TGE to help with governance, we’re now helping teams from token design through launch and beyond.
What that looks like:
Token sale execution across fixed-price, auction, and custom mechanisms.
Compliance tooling with KYC/KYI and eligibility gating built in.
Vesting schedules with on-chain enforcement and transparency.
Governance setup so your token holders have real power from day one.
Treasury infrastructure for managing what you raise.
Staking and rewards if that’s part of your tokenomics.
Ongoing support as your protocol matures.
Think of it as the institutional-grade stack for teams that want to launch tokens responsibly, without the operational chaos of stitching together point solutions.
The bottom line
ICOs are back, and they work now. The projects winning today are the ones treating token launches as the beginning of a long-term relationship with their community, not a liquidity event.
The infrastructure exists to do this right. The regulatory environment, while imperfect, is workable. The market appetite is clearly present.
The question isn’t whether token sales are viable again, it’s whether your team is ready to execute one properly.
If you’re exploring a token launch and want to talk through what that looks like with a team that’s done this at scale, reach out. No pitch deck required, just a conversation about what you’re building and whether a public sale makes sense for your protocol.
Tally provides token infrastructure for leading protocols including Arbitrum, zkSync, Wormhole, and others. We help teams launch, govern, and operate token-based systems at institutional scale.
Strong articulation of why ICO mechanics have matured beyond 2017. The shift from airdrop farming to stakeholder alignment makes sense when you consider that payment creates skin in the game that free tokens don't. What's understated here is the execution complexity: MegaETH's multisig issue and the jurisdictional headaches reveal that infrastructure gaps still exist even with improvd tooling. The regulatory thaw thesis is interesting but fragile without legislativeclarity.