Arthur Hayes on Revitalizing ICOs and Decentralized Innovation
Arthur Hayes has called for a return to the glory days of initial coin offerings (ICOs). His call comes amid a playing field increasingly dominated by venture capital (VC) gatekeepers and centralized exchanges (CEX).
The BitMEX co-founder’s manifesto “How to Make ICOs Great Again” criticizes the current state of cryptocurrency capital formation. He advocates a decentralized, community-driven approach that prioritizes retail investors and reinvigorates the industry’s speculative spirit.
Industry is sluggish
Hayes painted a grim picture of the growth of cryptocurrencies, where once vibrant grassroots movements have succumbed to the influence of centralized entities. He likened today’s project founders to patients suffering from the “CEX spread disease,” where the whims of exchanges and VCs dictate their decisions.
Hayes believes that the founders of cryptocurrencies have forgotten their basic ethos: decentralizationuser empowerment, and wealth creation for retail players.
“As an industry, why have we forgotten the third pillar of cryptocurrency’s value proposition – making retail rich?” Hayes joke.
He pointed out VC-backed tokens suffer dismal performance recent years. He believes these projects tend to be overvalued, fully diluted and have low circulating supply when they debut. However, they alienate retail investors by prioritizing institutional interests. According to BeInCrypto, such projects Hamster Kombat turns down VC support for this reason.
Nonetheless, Hayes attributes the meteoric rise of cryptocurrencies to three key factors:
- Government Capture: Decentralization is the antidote to the concentration of power in government and big corporations. It provides a system without traditional gatekeepers.
- Magic technology: The resilience and potential of blockchain technologies like Bitcoin have proven their worth as revolutionary monetary systems.
- greedy: The lure of huge financial rewards drives adoption. Retail investors looking for life-changing gains are often overlooked in traditional finance.
To illustrate this disagreement, Hayes contrasts the egalitarian nature of Meme Coin Exclusivity for venture-backed projects. He said memecoins rely on “meme content going viral,” allowing retail participants to gamble on speculative assets without gatekeeping.
In contrast, virtual currencies bear the burden of overvaluation. They are perpetuated by a closed ecosystem of elite institutions and investors with little regard for the retail market.
“The retail industry would rather bet on a meme token with a market cap of $1 million than a $1 billion FDV project backed by the most ‘respected’ venture capital group,” Hayes explained.
ICO case
Hayes sees ICOs as an antidote to industry malaise. In its purest form, ICOs enable teams from diverse backgrounds to raise funds directly from the community, without the need for intermediaries. This model embodies decentralization, promotes innovation, and allows retail investors to gain early access to opportunities.
Learn from 2017 Initial Coin Offering Hayes highlighted two intrinsic value drivers:
- Memetic value: Projects that resonate with the zeitgeist can attract users and build strong communities.
- Potential technologies: ICOs fund teams creating breakthrough technologies to address global challenges, often before writing a line of code.
Hayes acknowledged that many ICOs have failed miserably, but argued that this speculative nature was a feature rather than a flaw. It empowers retail investors to dream big and aim for transformative gains. Against this backdrop, Hayes outlined a roadmap to revitalize ICOs and make them great again.
- Faster token issuance: new frame and liquid Decentralized exchange (DEX) allows teams to distribute tokens within days, allowing for instant trading and price discovery.
- Improve infrastructure: Advances in blockchain scalability and reduction in transaction costs, especially on chains like Aptos (easy) and Solana (Sol), making ICOs more accessible.
- Enhanced user experience: Non-custodial wallets and streamlined platforms lower barriers to entry, ensuring wider participation.
- CEX independence: By bypassing centralized platforms, ICOs remove gatekeeping and return power to the community.
Additionally, Hayes warned investors to avoid falling into the traps of the current system, urging the cryptocurrency community to embrace the speculative and democratizing nature of ICOs, which offer an opportunity to achieve life-changing financial returns without the constraints of traditional finance. .
He pointed out: “Say no to high FDV, low-circulation projects backed by venture capital and overvalued tokens on CEX.”
As the cryptocurrency market enters Potential new bull market cycleHayes predicts a resurgence in ICOs, driven by an engaged, risk-tolerant community. Platforms such as Pump music and Spot.dog embody the shift toward decentralized, retail-focused capital formation.
Armed with these tools, Hayes envisions a future where crypto once again allows individuals to make bold bets and reap the rewards of decentralized innovation.
“Let’s get back to the spirit of the early days of cryptocurrency. It’s time to make ICOs great again,” Hayes concluded.
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