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From ICO to Paragon Open: Paragon's Vision for equitable and Sustainable Funding

  • Writer: PARAGON
    PARAGON
  • Apr 7
  • 4 min read



From traditional startups to cryptocurrency ventures, securing funding has consistently proven to be a pivotal challenge for project viability and growth. Reports from cryptoNews indicate that 60% of cryptocurrency projects effectively ceased operations in 2023 due to liquidity shortages. This statistic underscores the precarious reality of funding instability within the cryptocurrency industry, hindering long-term project development and stifling innovation before it can gain market traction. This instability is significantly exacerbated by the prevailing trend in early-stage crypto investing, where access is often restricted to venture capital funds (VCs) and accredited investors. This limited access frequently leads to token launch models that prioritize rapid financial returns for these early investors over fostering sustainable community growth and broader participation. These models often feature low initial circulating supply and high fully diluted valuations, creating pressure for early buyers and potentially hindering long-term price stability and genuine community engagement. The venture capital model, while providing crucial early capital, has contributed to this dynamic by often focusing on maximizing returns within a specific timeframe, which can sometimes conflict with the long-term health and decentralized ethos of Web3 industry.


The cryptocurrency sector has continuously evolved to address these systemic issues and explore more effective fundraising mechanisms. This evolution began with the disruptive ICO model, subsequently progressing through IEO and the venture capital model, and culminating in the recent, more speculative iteration of Pump.fun. While each model attempted to resolve specific challenges, they invariably introduced new limitations, thereby necessitating further innovation. Building upon the Web3 ethos, Paragon aims to introduce a new paradigm for sustainable funding within the industry through Paragon Open.


ICO (Initial Coin Offering) 


An ICO involved a project issuing proprietary cryptocurrency tokens at the ideation or early development stage to procure funding from investors. This model was predicated on the following objectives:

  • To mitigate the high entry barriers inherent in traditional investment markets. 

  • To expand direct investment opportunities for the broader public. 

  • To streamline and expedite the capital raising process.

ICOs facilitated decentralized investment from a global investor base and significantly contributed to community building and project advocacy. However, the prevalence of unregulated activities led to widespread fraudulent schemes. Cointelegraph's data, indicating that approximately 80% of ICO projects between 2017 and 2018 failed to deliver tangible returns to investors or were identified as scams, highlights the darker aspects of the ICO era.


Key Shortcomings:

  • Regulatory uncertainty and inadequate investor protection. 

  • Information asymmetry between project creators and investors. 

  • Low project success rates leading to investor losses.

These shortcomings fostered investor apprehension and drove the demand for more secure and reliable funding mechanisms, ultimately paving the way for IEOs, which incorporated exchange due diligence.


IEO (Initial Exchange Offering)

An IEO involved a project offering its tokens for sale via a cryptocurrency exchange's platform, with the exchange performing preliminary due diligence to establish a degree of credibility for investors. This model aimed to:

  • Address the regulatory and credibility issues associated with ICOs. 

  • Enhance project listing and liquidity acquisition efficiency. 

  • Improve marketing effectiveness and investor outreach.

IEOs provided investors with a higher level of trust compared to ICOs due to the vetting protocols of reputable exchanges, and exchange account holders could readily participate. However, they also presented the following limitations:


Key Shortcomings:

  • High listing fees and dependence on exchange infrastructure. 

  • Persistent information asymmetry between projects and investors. 

  • Centralization limitations contrary to blockchain principles.

These limitations spurred the development of alternative models that attempted to address the centralization and access issues, ultimately leading to a more structured approach through venture capital funding.


Venture Capital (VC) Model

The venture capital model in the cryptocurrency space involves private funding rounds led by VCs, often leading to rapid CEX listings.

This model aimed to:

  • Provide substantial early-stage funding. 

  • Offer strategic guidance to promising projects.

However, several challenges arise:


Key Shortcomings:

  • Limited Retail Access: Retail investors face inflated valuations, as early access is VC-dominated. 

  • VC Influence: VCs wield significant influence, potentially distorting markets. 

  • Value Disparity: The actual value added by VCs beyond capital is often questioned.

These limitations underscore the need for alternative funding models that prioritize broader participation and sustainable growth, which led to the creation of the Pump.fun model.


Pump.fun is a platform designed to enable users to rapidly create and trade new tokens based on social media trends. Its short-term objectives were to:

  • Simplify the complex procedures associated with the IEO and Venture capital model. 

  • Facilitate rapid market entry and trend capitalization. 

  • Lower the technical barriers to token creation and trading.

While Pump.fun offered simplicity and rapid trend responsiveness, it exhibited the following significant shortcomings:


Key Shortcomings:

  • Extreme speculative activity and low long-term viability, with most tokens quickly losing value. 

  • High investment risk and inadequate investor protection. 

  • Vulnerability to market manipulation and insider trading.

These inherent limitations underscore the need for sustainable and reliable funding mechanisms, making Paragon Open's role crucial.


Paragon's Vision


Paragon recognizes the challenges of prior funding models and aims to establish a premier launchpad, providing a trustworthy investment environment and connecting promising early-stage projects with key Web3 investors. We propose a new framework for equitable and sustainable growth through Paragon Open, driven by the following principles:


Key Principles:

Curated Promising Projects: Through strategic partnerships with leading Web3 VCs and industry players, we will meticulously vet high-potential projects to ensure investor confidence. 

Innovative Funding Models: We aim to introduce new models, such as asset staking for project support and shared reward systems, to foster community engagement and project growth from early stages.

Paragon Open aims to be more than just a token sale platform. We are committed to empowering investors and providing projects with a foundation for sustainable growth and community development. We strive to set new standards for a fair, transparent, and sustainable Web3 ecosystem. We welcome your interest and participation in Paragon's journey.


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