spokesman:
Haseeb Qureshi, Managing Partner, Dragonfly
Robert Leshner, Co-founder & CEO of Superstate
Tarun Chitra, Managing Partner, Robot Ventures
Laura Shin, Founder & CEO of Unchained
Podcast source: Unchained
Original title: Did TradFi Just Hijack Crypto? The Suit-ification of Stablecoins – The Chopping Block
Air Date: June 13, 2025
Circle’s IPO: A Historic Event
Haseeb:
The stablecoin craze is in full swing. We just had Circle’s IPO, which was probably the most notable IPO of the year, and it was amazing. For those who don’t know, Circle has been trying to go public for years. They originally tried to go public through the SPAC (special purpose acquisition company) craze, but it didn’t work out. Earlier this year, they tried again, but it was stalled by tariffs. In the end, they pushed forward again and successfully completed the IPO. There were even rumors that they might be acquired instead of going public, but ultimately those speculations didn’t come true.
Circle's IPO was phenomenal. It had one of the biggest first-day gains in history and the biggest first-day gain of any IPO that raised more than $500 million since 1980. The stock closed up 180% on the first day, and another 30% on the second day, for a two-day gain of 250%. They initially raised $1.1 billion in the IPO. If recalculated based on the second-day closing price, they would have raised $4 billion. This suggests the IPO was underpriced by nearly 4 times.
Circle's current valuation multiples are also very impressive. Based on 2024 revenue, their price-to-sales ratio is 15 times, and their price-to-earnings ratio is as high as 160 times. In contrast, Coinbase's price-to-earnings ratio is only 25 times. This high valuation also reflects the market's high expectations for Circle. Of course, due to the IPO lock-up period (usually 180 days), insiders cannot sell their shares during this period.
Now it seems that this IPO is like a signal that the era of stablecoins has arrived. I believe that most people did not expect such a result. Some people were worried that the market interest in this IPO might be insufficient, and even the price would need to be reduced. However, the fact is completely the opposite. Not only did the price not drop, but it soared rapidly under the enthusiastic pursuit of the public market.
Market reaction and far-reaching impact
Haseeb:
Robert, what do you think of Circle's IPO?
Robert:
This IPO was a real shocker. It showed everyone how enthusiastic the market was about new crypto companies going public. I don’t think Circle expected it to be this successful, and I don’t think bankers or investors expected it to be this successful. Even on crypto Twitter, almost no one expected this. The real question is, where did all this demand come from? Because a lot of people I talked to thought this IPO might be a little volatile, but it surprised everyone.
I think this IPO has redefined market expectations for how crypto companies should be valued in the public markets. The demand is so strong that it's beyond belief. As a result, I believe this will accelerate other crypto companies' plans to go public. We've already seen some companies submit new applications.
Haseeb:
Do you think this IPO boom reflects interest from the public market as a whole, or is it limited to the stablecoin sector?
Robert:
I think it's both. Everyone wants to get into the stablecoin market. Everyone knows that the Genius Act and the Stability Act are moving forward, and stablecoin legislation is coming. This is a rapidly growing market, although it is not certain whether Circle will be the only beneficiary. To some extent, these legislations may pose certain challenges to Circle. However, stablecoins are undoubtedly the hot topic at the moment, and truly crypto-native public companies in the US market are very scarce. So, this is not just a stablecoin story, I think this is just the beginning. The market demand for high-quality, scarce companies will far exceed people's expectations. After all, there has never been an investment opportunity focused on stablecoins before.
So, is Circle overvalued? Probably. Compared to Tether, Circle is indeed overvalued. But the problem is that there is no other way to bet directly on stablecoins in the market. Investing in Layer 1 blockchains such as Ethereum or Solana does not capture the success of stablecoins very well. So, if you are an investor in the public market, Circle is undoubtedly a more direct choice.
Haseeb:
According to an analysis by Jon Ma of Artemis, if Tether traded at the same valuation multiple as Circle, its market capitalization would be around $500 billion. For comparison, JPMorgan Chase's market capitalization is around $700 billion. This would make Tether the second-largest financial company in the world.
Robert:
In a sense, Tether's valuation multiple is more reasonable than Circle's. This is because Circle's profit margin is not actually very high. They have a large number of employees, and they also need to share a lot of revenue with Coinbase. In contrast, Tether is more profitable and therefore more worthy of such a valuation multiple.
Stablecoin-related legislation and Tether’s response strategy
Haseeb:
Another noteworthy piece of news is that the "Genius Act" will be voted on tomorrow. Maybe by the time you hear this news, the voting results have already come out. We can first predict the results.
It is estimated that the result of this vote may be 66 votes in favor and 32 votes against. So I think the bill is likely to pass, but the final result still needs to be confirmed. However, from the current situation, it shows that the market demand for this bill is quite strong.
At the same time, Tether said that if the Genius Act is passed, they will consider withdrawing from the US market. This is because the bill stipulates that stablecoins must be backed by high-quality collateral, such as short-term Treasury bonds. This is exactly the model adopted by Circle and most other stablecoin issuers. But Tether's asset portfolio includes many other types of assets, such as commercial paper, Bitcoin, and some other loan projects. Therefore, if they want to meet the requirements of US regulation, they need to completely restructure their financial infrastructure to ensure that all stablecoins are backed by safe and reliable assets.
Robert:
But will they really do this? Because according to the requirements, stablecoins need to achieve 1:1 asset support. Tether has accumulated more than $10 billion in profits, which have been used to invest in various assets. If they want to strictly achieve 1:1 support, I think it is not difficult to do so with their profitability and possible over-collateralization.
Haseeb:
Maybe so, but Tether has publicly stated that they will withdraw from the US market. Of course, this may be a strategy to influence regulatory decisions by exerting pressure. But they did mention that they will pay more attention to the development of non-US markets. I can understand this because the cost of restructuring the asset portfolio may be very high. Moreover, it also means that every operation they carry out in the future will be strictly regulated by the US Federal Reserve.
Tether has always been a relatively closed and opaque company that seems to prefer to maintain its existing business model, so this reaction is not surprising.
Circle's Market Position and Future Development Direction
Haseeb:
Circle’s business model is a money-printing machine, which is probably why its premium is so high. People realize that Circle will basically dominate the entire US market because Tether is unwilling to accept the upcoming regulatory system.
Haseeb:
This means that Circle will compete with banks. There are many reports that banks are considering forming a consortium. I think big banks like JPMorgan Chase, Wells Fargo and others are discussing launching a consortium stablecoin consisting of large US banks. Therefore, the industry may be divided: Circle is onshore, as a crypto-native technology company, while banks mainly serve institutional clients and may be more risk-averse. The international market may be dominated by Tether. On the chain, USDC is still dominant because of its historical position on the chain. I can imagine that different areas will be dominated by different parties, but it is obviously too early now. Laura, what do you think of the craze about Circle?
Laura:
I agree with Robert that Circle is popular not only because stablecoins are popular, but also because it is a listed company. This kind of crypto reserve company, especially Bitcoin reserve company, people want to get crypto exposure in the traditional market. Therefore, Circle meets the needs in both aspects.
But the thing is, all the stuff we talked about about Tether, I recently interviewed Jeff Park for a two-part conversation, which was really interesting. Basically, stablecoins could potentially transform the dollar into multiple products if the U.S. is willing to look at this asset more entrepreneurially because a lot of the world needs it.
Will governments come together to recognize that this is a valuable thing that they can exploit as such if they look at it more entrepreneurially. For example, people always say that Tether is a good example of a dollar, which is in high demand abroad. You can imagine that depending on the different companies or people who want to mint stablecoins, there may be different benefits. So I think people understand that there is a huge space in this category for many different market segments.
Interestingly, I asked two different people to talk about Circle and they were very negative about the Circle IPO, and that was revealed before the IPO actually happened. Circle has huge expenses and the business is very different from Tether because it is compliant. Even some people in the securities field complained that in the event of bad behavior, when using USDC, Circle will not freeze funds because as a US company, they can be sued more easily, while Tether does not have this problem.
This is considered common sense in the crypto space, but I saw a tweet from someone who used to work at Circle. She wrote that it was exciting to watch Circle's IPO pricing from a financial infrastructure perspective. When you control currency issuance, you are no longer in fintech, but in monetary policy.
She listed the numbers, PayPal has a market cap of $70 billion and $1.5 trillion in volume; Visa has a market cap of $500 billion and $14 trillion in volume; Circle is valued at $6 billion and $1.2 trillion in volume. So its volume is very close to Visa, but its market cap is only about 12% or 13%. She noted that everyone in the crypto space is underestimating this, but she said the 25x oversubscription is the real story. The underwriters were too conservative in pricing and missed fundamental changes. Circle, she said, controls the digital dollar printing press.
So I honestly don't know how this is going to play out because everything about Circle, even just the fact that they have to give half of their profits to Coinbase, Coinbase makes more profit from USDC than Circle does. There's an industry pyramid that shows that the people who own the distribution channels are the most powerful, like exchanges. So I understand Circle's business model, but at the same time, stablecoins are going to be a huge category.
Tarun:
I actually attended the IPO party on Friday. First of all, I have never seen so many traditional finance people at a crypto event. In fact, we were the only three people not in suits. It was a really interesting and enlightening moment. They rang the closing bell and there were people all around, and the three of us stood in the back.
I would just say that I have never seen such genuine interest from traditional finance people in this. Usually they just do some window dressing, like, "Oh, the bitcoin price is going up, we'll pretend to work with blockchain." This is clearly not the case. I feel like everyone is gathering in the field related to non-bank financial lending, and all the major private credit fund CEOs are here.
I feel like Circle has a very different audience than Tether, their net worth is almost completely different, and there is almost no overlap in who uses the two, unless it's trading USDC in a Curve pool. Beyond that, I feel like they will diverge over time. I think if you look at a lot of the new stablecoins, I do feel like Circle probably paid a lot for early distribution advantages, but clearly no new stablecoin has been able to find distribution channels comparable to Coinbase trading.
I'm not talking about Tether, but all competing stablecoins, they either face this problem or have to pay more than Circle to get distribution channels. I think Circle sets a floor price for any distribution transaction, which makes it very difficult for new entrants to overcome this barrier. Because everyone will say, "Give me 75% to 80% of the revenue," and won't give you 50%. I think this actually creates an interesting pricing power dynamic that makes the barrier to entry very high for new entrants. As a result, I think you are more likely to see banks succeed than start-up stablecoins.
Haseeb:
You mentioned that Circle has a dominant market position, and we all agree with that. What do you think about pricing? Because that's what most of us commented on.
Tarun:
Did you know? There are two meme stocks that start with a C, CoreWeave and Circle, that were founded at about the same time. I consider CoreWeave and Circle to be meme stocks, but they are the opposite of GameStop. They are meme stocks that are meant to grow significantly in 10 years. The problem is that there aren't nearly enough proxies to bet on either alone. So everyone is lumping all their bets together.
Haseeb:
That's really the story. I think right now, the only investment that's representative of stablecoins in the public market is Circle. Realistically, if we're talking about low-flow tokens like IPOs or IPOs with low flow, there aren't a lot of investors who want to own that narrative. So the narrative gets pushed higher. When there's more supply in the market, there's probably going to be more opportunities, although I believe that will happen.
Tarun:
Circle's IPO float was much higher than some of the data center companies. I mean, CoreWeave's IPO wasn't exactly something I would show to regulators as crypto being worse than these low float, high FDV companies. Some of the AI IPOs have also performed like bad crypto in recent weeks.
Haseeb:
But what’s interesting is that if half of Circle’s revenue is going to Coinbase, that means if you look at current valuations, Circle’s revenue plus Coinbase’s other revenue will produce Coinbase’s market cap, which means Coinbase’s other revenue is probably trading at less than 3x.
This is clearly not the case, and clearly this is a result of Circle having very low circulation, and therefore not having much price discovery, because the demand for stablecoins is so high. Buying Coinbase doesn't give you enough stablecoin exposure, and Circle is the pure stablecoin investment you can make today. But what's interesting about this is that if the market is efficient, Circle should re-price when everyone realizes that Circle revenue is worth far more than we thought.
Tarun:
So if you look at the market cap ratio of CoreWeave to its customers, the customers are all revenue sharing/building customers, which is not that different from this case. So I think you have to look at the macro market stuff. I do think the market is tired of pure ETF bets, things like Microstrategy and Treasuries, you saw the 10th Treasury launch didn't do very well. I feel like Circle actually has a real product for people, not the 10th Bitcoin treasury company. I think the irony of these Bitcoin treasuries is that they may have killed their own golden goose because there are too many competitors chasing the same opportunity at the same time.
Crypto Reserve Companies: A New Trend on the Rise
Haseeb:
Next, let's talk about crypto reserve companies. This is a topic we've mentioned many times on the show, but there's a lot more to explore. For those who are not familiar, the original crypto reserve company was Microstrategy (now renamed "Strategy"). This company was originally a software company, but now it has basically become a huge Bitcoin reserve. They raise funds by issuing corporate debt to buy more Bitcoin. What's puzzling is that Microstrategy's stock price is about 1.7 times the value of its Bitcoin holdings (i.e., net asset value NAV). Why is there such a premium? This is a controversial topic. Some people believe that this premium may be because investors are looking at its leverage effect and its potential to continue to accumulate Bitcoin in the future. By purchasing Microstrategy's shares, investors actually obtain an indirect leveraged position in Bitcoin.
We are also seeing other companies adopting similar strategies. For example, Jack Mallers' 21 Capital, Trump Media, Nexon in South Korea, and Meta Planet in Japan. However, there are also critics who worry that this may become the next GBTC (Grayscale Bitcoin Trust). GBTC once caused the collapse of 3AC due to its complex leverage mechanism and triggered a series of chain reactions through crypto lending platforms such as BlockFi. However, unlike GBTC, these reserve companies do not have obvious leverage mechanisms because their debt operates in a completely different way from the leveraged trading of hedge funds. Laura, "Unchained" recently released an article about the compensation structure of these reserve companies. Can you summarize it for us?
Laura:
These companies have taken different approaches to evaluating and rewarding executives. Traditionally, stock price is usually a metric, but some companies have tried more innovative models. For example, there is a company called Defi Dev Corp, and their reserve asset is Solana. They link the compensation of the CEO, CFO, and CIO to the amount of Solana corresponding to each share. This model is very interesting because many of these companies are currently valued much higher than the actual value of the assets they hold.
Haseeb:
This also reveals why relying solely on stock price as a metric is problematic. Because the value of these companies is highly correlated to their underlying assets, and the prices of underlying assets are very volatile. If the price of Solana rises significantly, it is obviously unreasonable for executives to increase their compensation even if they do not take any real action. In contrast, a more reasonable metric should be whether executives can effectively incorporate more Solana into the company's reserves.
Robert:
In fact, this incentive mechanism is to drive companies to purchase more crypto assets by issuing debt. For example, if a company uses 5x leverage, the number of crypto assets corresponding to each share will increase significantly, but it will also significantly increase the company's risk. This model is reminiscent of a leveraged ETF (Exchange Traded Open Index Fund), although due to its complexity, it cannot be fully modeled as a traditional leveraged ETF.
Haseeb:
The key is how you use leverage. Some leverage methods are extremely risky, while others are relatively safe.
Robert:
For example, Microstrategy's leverage approach, while initially appearing risky, now appears to have proven successful.
Haseeb:
Indeed, they recently launched a new form of debt called "Strikes". Its feature is that the debtor can not repay the debt, and there is no recovery mechanism. In other words, if the debtor misses a payment, they don't need to make it up later. And this kind of debt usually offers a 10% coupon as a condition to attract investors, that's it.
Simply put, the debtor is like saying to the investor: "You can buy my bonds, but I may never pay you back." Then, they use the borrowed money to buy Bitcoin and enjoy the benefits of the rising Bitcoin price. At the same time, investors can only passively hold the debt, unable to force repayment or share the benefits of the rising Bitcoin price. This model allows the debtor to take the initiative, while the investor appears very passive.
Tarun:
An interesting theory has been proposed that Microstrategy's success model has similarities to the fork mechanism of Bitcoin. When Bitcoin forks, holders receive new Bitcoin airdrops, which often prompts them to sell new coins and buy more Bitcoin, thereby increasing the overall value of Bitcoin. Similarly, Microstrategy's "fork" can refer to those secondary and tertiary Bitcoin treasury companies. If these companies gradually fail, investors may turn their attention back to Microstrategy, making it the core gathering point of Bitcoin treasuries. This phenomenon may further consolidate Microstrategy's position in the market. Unless the price of Bitcoin crashes severely, Microstrategy has proven that it has a certain degree of risk resistance, although its scale may no longer be as large as it was at its peak. Those other Bitcoin treasury companies are more competing for marginal resources in the market.
As for those investors who are willing to buy the debt of companies with Bitcoin treasuries at the bottom of the rankings, it is difficult for me to understand their motivations. Microstrategy is a more ideal choice. As Robert said, they have accumulated a large amount of Bitcoin through high-risk leverage strategies and successfully built their own treasury. This allows them to issue convertible debt at a lower cost. However, the capacity of the convertible bond market is not unlimited, and not all investors are willing to participate in such transactions. In contrast, most people prefer to buy Microstrategy's shares directly because its debt transactions are simpler and clearer. Participating in this debt arbitrage requires higher expertise and a deep understanding of risks, and not many investors are willing to undertake such complex operations.
From the perspective of market structure, this arbitrage opportunity can be likened to a fixed "demand pie chart", in which Microstrategy occupies at least 50% or even more of the market share. The remaining market is fought over by other Bitcoin Treasury companies. However, even if the convertible debt market grows by 10% per year, it is difficult to meet the financing needs of all companies. Therefore, I believe that in the future, some Bitcoin Treasury companies may be forced to transform and find other financing methods or strategies because they cannot continue to issue debt.
Unpacking convertible bond arbitrage opportunities in cryptocurrencies
Robert:
There is a significant difference between traditional convertible bond arbitrage and crypto treasury companies. If a regular non-crypto treasury company, such as a Midwestern manufacturing company, issues a convertible bond, the market is mainly concerned with the volatility of its stock and the upside potential above the conversion price. Investors judge the value of convertible bonds through option pricing models. However, the market size of this market is very small because it is essentially a bet on the volatility of a specific company. Moreover, investors not only have to bear the company's debt risk, but also need to combine options strategies for complex evaluation.
For Microstrategy or other crypto reserve companies, the situation is completely different. The downside risk of these companies is mainly linked to the volatility of Bitcoin prices, rather than the operating risks of the companies themselves. It can be said that these companies are more like a "storage box" and their core value depends on the performance of Bitcoin. This consistency allows investors to focus on the volatility and downside risk of Bitcoin without worrying about complex corporate risks. Compared with the traditional convertible bond market, this model attracts more capital because the overall size of the crypto market is larger, and with the popularity of Bitcoin and other cryptocurrencies, this market will expand further.
Tarun:
What about Solana or Ethereum-related companies? The market size of Bitcoin is indeed large enough to support such a strategy, but I doubt whether Solana is sustainable.
Robert:
It depends on the size of the spot and derivatives markets. If the Ethereum derivatives market is large enough, it is not difficult to hedge or model the convertible bonds of Ethereum Strategy Company. But if it is some crypto assets with lower market capitalization, such as the 400th ranked currency, the market demand is very limited, the trading is not active, and the risk hedging is extremely difficult.
Tarun:
I think that every asset has its carrying capacity. While the market size of Bitcoin is large enough that people can accept the risk of a longer holding period, even for Ethereum, few people are willing to take the risk of holding for too long. This is obvious from the funding rate and the option pricing of the Ethereum ETF.
Robert:
However, the funding rates for Ethereum and Bitcoin are actually not much different.
Tarun:
From the perspective of open positions, the weighted results show that the difference between the two is still very large. I think there will be no more than 10 Ethereum strategy companies.
Haseeb:
There may be as many as 10 Bitcoin-related companies, while Solana may only have 2.
Tarun:
In reality, there are far more than 10 companies involved in Bitcoin. There are also many companies that randomly add Bitcoin to their reserves.
Potential market risks and dynamic analysis
Laura:
I noticed a tweet that mentioned that these companies could play a central role in some kind of crash in the future, similar to what happened with GBTC or other similar stocks. We discussed this as well, and it feels like this scenario could only happen if these companies were able to borrow against their assets. Of course, there are other factors, such as Microstrategy may have better loan terms, while some other companies may be further along the risk curve and adopt more aggressive strategies, thus facing greater downside risk when the market fluctuates.
In other words, if there are lenders willing to accept these assets as collateral, this could be how the risk breaks out. At the same time, this situation could trigger a cascading effect. For example, if the price of Bitcoin falls for some reason, some companies with poor financing conditions may be forced to sell assets, which will further exacerbate the chain reaction in the market. These are just some of my thoughts, but it is really interesting to see so many people discussing this issue. From what I have learned so far, it seems that these assets cannot be used as collateral for borrowing. However, I heard that JP Morgan now allows borrowing with Bitcoin ETF as collateral, which is interesting. Although JP Morgan CEO Jamie Dimon has always been opposed to Bitcoin, it is clear that his company does not mind profiting from it.
Haseeb:
However, when it comes to borrowing, things get complicated, right? The loan-to-value ratio (LTV) should be relatively low.
Tarun:
Yes, LTV is a key factor. I mean, almost every other broker offers something similar, with a few exceptions.
ETFs can be used as collateral. If you are trading, usually the broker will provide some form of margin lending. I think JP Morgan is relatively conservative in this regard. Of course, I can borrow through Microstrategy, but the loan-to-value ratio is not particularly high. However, most brokers will provide similar services.
Laura:
Oh, see. So do you think that explains why some people are saying it could be the GBTC of the future?
Haseeb:
I think market crashes don’t usually happen when everyone is paying attention. There is some truth to this statement. Usually, the risk points are hidden deeper.
Tarun:
I think the failure mechanism for these companies might be more like this: If a company is included in the S&P 500, all ETFs tied to it will be forced to buy its shares. However, before rebalancing, if the price of Bitcoin drops significantly, the company could be removed from the index due to debt problems. The problem is that when a company is included in the S&P 500, the market usually assumes that its stock value will increase, so the company can issue debt at a lower cost. But if crypto assets drop significantly before the next index rebalance, the company could be in trouble.
Haseeb:
Furthermore, these debts typically do not carry a claim to conversion rights, meaning that creditors cannot recover their losses through bankruptcy proceedings.
Michael Saylor's Market Influence
Haseeb:
To this day, I still don’t fully understand how Michael Saylor did it, but his ability to acquire capital is truly amazing. From what is currently happening, the market crash will not be caused by Saylor, but more likely by someone else. If the market does crash, such as Bitcoin falling to $50,000 or $40,000 and stagnating for a long time, then Saylor may exacerbate the downward pressure on the market, but he will not be the initial trigger. Saylor’s strategy does make the situation worse when the market falls, but when the market rises, he can drive the market by increasing the cyclical influence of the asset. The double-edged nature of this strategy means that if the market falls, it will be more difficult to get out of trouble.
Robert:
However, I think the next market rally will be a good opportunity. This is definitely good news for Saylor.
Tarun:
I admire Saylor for being able to do this. That's why I'm confused by the trend of trying to imitate him. We should realize how bold and crazy what Saylor did. I don't think everyone needs to copy his model. Imitation is indeed a kind of recognition of him, but it's more like a "burning money" recognition. You know, this kind of imitation may not be wise.
I don’t think everyone has the same vision for Bitcoin as Saylor. When you talk to people at these companies, they are more focused on how to make a profit than they are on thinking deeply about the macroeconomics or how to survive a market crash like Saylor.
Haseeb:
Could not agree more. Saylor is truly a unique character whose tactics and influence are reminiscent of a mob boss. Someone like him may never come around again.
Tarun:
I think the point is not that there will never be another Saylor, but that the rules of the game will change in the future.
Haseeb:
That's right, those who try to be the "next Saylor" should not actually be rewarded like him. Saylor owns a lot of Microstrategy stock, which allows him to take greater risks. And those so-called "next Microstrategy" are actually more like mercenaries, and they do not have the same long-term interests as Saylor. They should focus on optimizing the financial strategies invented by Saylor rather than simply copying his model. After all, Saylor is essentially a "financial engineer", and his returns should be based on his contributions to financial engineering rather than relying entirely on the value of the underlying assets. Therefore, I think the market will move in this direction in the future.
Tarun:
I have a hard time getting excited about these copycats, though. The market doesn’t look sustainable for them right now. I hope I’m wrong and there will be 500 of these companies, but that doesn’t seem realistic.
The rise of ICO and market trends
Haseeb:
There is a project called Plasma that is purportedly a stablecoin chain associated with Tether. There are many similar projects now that claim to natively issue tokens and have no transaction fees on the chain. The idea is that this model should be more advantageous than Tron, which has transaction fees and these projects have no fees, while also facilitating stablecoin payments.
Plasma recently had an ICO (initial coin offering) through a platform called Sonar, with a valuation of $500 million. They raised $50 million by selling 10% of the total supply of Plasma. The funds were deposited into the liquidity vault, and the demand reached $500 million in seconds. The top ten wallets held 38% of the total supply, and the top 17 wallets held 50%. One wallet even deposited $50 million alone. There was also a "gas war" during the whole process, and someone reportedly spent $100,000 in fees to ensure a successful participation with 10 million USDC. This phenomenon allows us to see the resurgence of the ICO craze.
Tarun:
I find it interesting that whenever Trump is in office, there seems to be an ICO boom. 2017 is a prime example.
Regarding Sonar, Kobe mentioned that when they first designed Echo, investors were dissatisfied with the need for approval and lack of control in the traditional investment group model. Sonar allows these teams to conduct ICOs more flexibly. I think this is very interesting. As I mentioned in the book, early ICO models, such as DAO (decentralized autonomous organization), raised a lot of money, but after the funds entered the smart contract, the team found that there was a lack of effective tools to manage these funds. There was not even a safe way for investors to withdraw funds at the time, which led to problems such as hacking. Later, we saw some improvements, such as tools developed by Taylor Monahan to help users who lost funds due to phishing or fraud. Now, platforms like Sonar represent a more mature version. I think this reflects a long-term development trajectory. Looking back at the Internet bubble, many startups would go public very early, while today's companies tend to postpone going public. Now, through this new way, ordinary investors can participate in projects earlier. I admit that this model has risks and requires strengthening investor education and may require changes to accredited investor laws in the United States. But from a historical and market perspective, I do think similar ICO models will become more and more common, even though they may not be exactly the same.
