ICOs are making a comeback, will they replace airdrops in 2026?

Author: blocmates

Compiled by: Luffy, Foresight News

If you have been active in the cryptocurrency market recently, it is not difficult to notice a trend: the airdrop frenzy is gradually fading, the Initial Coin Offering (ICO) is making a strong comeback, and at the same time, the market is shifting from a venture capital-led financing model to decentralized fundraising.

ICOs are not a new phenomenon; some of the most popular cryptocurrencies in the field (such as Ethereum and Augur) completed their initial issuance through ICOs. However, we must acknowledge that after experiencing a long “silent period” from 2022 to 2024 (during which project financing was mostly completed through closed-door venture capital transactions), ICOs saw a strong revival in 2025.

Why is the ICO making a comeback?

One viewpoint supporting the resurgence of ICO-style financing is that since the first ICO boom from 2014 to 2018, the number of cryptocurrency participants has more than tripled, with a compound annual growth rate of 4.46%, and the average participant's level of expertise has significantly improved. Additionally, the increase in the supply of stablecoins has naturally expanded the available capital pool, making more people willing to purchase discounted tokens before the Token Generation Event (TGE).

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Although this claim is quite appealing, the increase in market participants is not the main driving force behind the return of the ICO mechanism. To find the core reason for the recovery, we need to examine the inherent flaws in the current financing model.

A close observation of the market cycles from 2022 to 2024 reveals that many projects raise funds from venture capital at a low fully diluted valuation (FDV) but achieve a much higher FDV at the time of public listing by suppressing the initial circulating supply.

Here are some examples from 2022 to 2024:

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As shown in the table, insiders have seized most of the profits, severely compressing the profit margin for retail investors.

In simple terms, the profit opportunities of altcoins are mainly concentrated in the hands of insiders, while retail investors either buy tokens at inflated prices or quickly sell them after receiving airdrops. This is largely because airdrops are often seen as “free money,” leading to immediate selling pressure.

This pattern has led retail participants to generally feel exhausted: due to the continuous deterioration of the risk-reward ratio, they are gradually losing confidence in traditional altcoin investments.

Subsequently, retail funds shifted towards memecoins, which have a low entry threshold, high volatility, and no venture capital involvement, driving the memecoin craze and the rapid rise of memecoin issuance platforms.

Ultimately, this has resulted in an increasingly serious misalignment of interests among retail investors, project teams, and venture capitalists, with the incentive goals of the three parties diverging further.

• Retail investors crave fairer entry opportunities
• Project parties need a sustainable community rather than short-term speculation.
• Venture capital often seeks early asymmetric returns.

The tension generated from this has created an urgent need for a completely new model to recalibrate the incentive culture of the entire ecosystem, and the resurgence of ICO-style financing is a reflection of this shift.

The appeal of ICOs lies not only in providing an alternative method of financing but also in their clearer incentive structures, allowing retail investors to participate on more equitable terms.

The reason why ICOs may replace airdrops

For the reasons mentioned above, we have reason to believe that the market incentive culture may shift towards a “benefit binding” model, replacing the traditional “task-for-reward” airdrop model with ICO discounts.

Relevant signs have begun to emerge. Both MegaETH and Monad have allocated part of their previous venture capital shares for public sale. Although these initiatives are not purely ICO distributions, issuing tokens to the public at venture round valuations is a step in the right direction.

ICOs are often seen as a more natural and emphasis on “interest binding” token distribution method: participants invest their own funds at a benchmark valuation, which can be either a single round of financing or a tiered structure with multiple pricing levels.

In theory, this can create a stronger psychological and economic bond between users and projects.

Since participants are purchasing tokens directly rather than acquiring them for free, they are generally more inclined to hold them for the long term. This helps to reverse the trend of decreasing on-chain asset holding periods in recent cycles.

In addition, ICOs are expected to reshape the profit space of the altcoin market: public fundraising usually has higher transparency, with circulation and valuation being clear, and compared to venture capital-led token models, their FDV is often more reasonable.

This structure increases the likelihood of early retail participants obtaining substantial returns, rather than competing for shares with insiders who enjoy significant discounts.

In contrast, many airdrop projects have given rise to a widespread culture of “sell immediately upon receipt” due to poor incentive design. ICOs, on the other hand, offer a more rational and sustainable option in terms of token distribution and early community building.

) The rise of early financing platforms and its implications for ICOs

Last month, the cryptocurrency industry witnessed a major acquisition: Coinbase acquired the on-chain financing platform Echo for $375 million. This acquisition includes Echo's Sonar product— a tool that allows anyone to initiate public token sales.

At the same time, Coinbase has also launched a native in-app launch platform, with its first collaboration project being Monad.

Besides Echo and Coinbase, early financing platforms have shown a trend-based development. Kaito has launched the exclusive launch platform MetaDAO, redefining the connotation of ICO.

MetaDAO is particularly noteworthy. The emergence of this platform clearly reflects the market's fatigue with the “insider-led, high FDV issuance” model. Its goal is to help projects achieve long-term growth through a high-volume ICO early on.

This indicates that the market is fully prepared for the return of ICOs, but not just any form of ICO; rather, it is a carefully planned fundraising model that is well executed and can create a positive interest alignment among the team, community, and the overall market.

How to do a good layout?

Fairly speaking, we have previously pointed out that the resurgence of ICO popularity reflects a reevaluation of the incentive culture in the market, which is fundamentally about creating fairer opportunities for retail investors.

This means that the project team and retail investors need to align their interests and cultivate a more resilient community composed of active users and steadfast token holders. In fact, this also indicates that the era of “free tokens” may be coming to an end.

Looking back at some successful airdrops that have had a profound impact on the ecosystem (such as HYPE), we can see the optimization space for distribution design:

Taking Hyperliquid as an example, real users (not speculative “miners”) participate by paying fees and bearing actual risks, and the rewards they receive are truly tied to the success of the product.

This case demonstrates that when the incentive structure is designed reasonably, retail participation can be both meaningful and sustainable, rather than a transient speculative behavior.

We believe that this approach will permeate the operating model of ICOs: in the future, ICOs may offer discounts to users who demonstrate “more mature on-chain behavior and higher credibility,” thus replacing the traditional airdrop distribution.

A set of data from 2024 illustrates the issue well: after airdropping tokens, over 80% of light users tend to sell within 7 days, while this ratio for heavy users is only 55%.

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To succeed in the envisioned future, participants need to establish a long-term mindset and adjust their actions accordingly.

This means cultivating user loyalty to specific wallet addresses in order to build credibility and demonstrate consistent, coordinated on-chain behavior.

Such behavior may include meaningful on-chain activities such as experimenting with various protocols, deploying liquidity in funds pools, and contributing to public goods like Gitcoin.

Although there are still differences in the market's evaluation of projects like Kaito, we expect they will play an important role in shaping the next phase of the market.

For example, the yap threshold combined with verified on-chain behavior may become a key criterion for ICO participation eligibility or discounted token allocation, rewarding participants who demonstrate sustained commitment and vested interests.

If the above pattern becomes the norm, one way to expand profits is to utilize products like INFINIT or Giza to allocate funds across multiple ecosystems.

Although this method may have limited effectiveness in scenarios where the age of the wallet and the weight of historical behavior are high, if on-chain activity is solely used as the criterion for ICO participation or discount allocation, its advantages will still be quite significant.

( Potential Issues and Challenges

ICOs still face many challenges to become the default method of financing and reward distribution in the cryptocurrency industry.

A key challenge is that, like poorly designed ICO token economic models, venture capital-dominated financing can lead to failure.

If a project prices its tokens too high, especially relative to the current market valuation (which is often influenced by low circulation and high FDV manipulation), then these tokens may still struggle to gain recognition in the public market.

In addition, regulatory and legal considerations also pose significant obstacles. Although the regulatory transparency of cryptocurrencies is increasing in certain jurisdictions, there are still many gray areas for ICOs in potentially high-capital regions.

These legal uncertainties may become a bottleneck for the success of ICOs, and in some cases, they might even push projects that struggle to gain sufficient attention back to venture capital firms.

Another interesting challenge faced by ICOs is the possibility of market saturation. As multiple projects often conduct fundraising simultaneously, participants' attention can be diverted, leading to a potential decrease in overall enthusiasm for ICOs. This may result in a widespread “ICO fatigue,” which could suppress broad participation and market momentum.

In addition to these challenges, as the market may shift towards ICOs, projects have many other key considerations, including incentive mechanism coordination, community engagement, and infrastructure risks, all of which must be addressed to ensure sustainable success.

) Conclusion

Currently, the demands of the market are very clear: people desire a fairer project launch and a reduction in venture capital scams. The current state of the altcoin market also reflects this—spot positions are decreasing, while perpetual contract trading volume is increasing.

We believe this clearly indicates that retail investors have largely given up on long-term gains in favor of more speculative investment approaches.

From the perspective of attention economics, the situation is even more severe: it not only harms the entire industry but also hinders innovation.

The return of ICOs seems to be a step in the right direction. However, it is unlikely to completely replace the airdrops we are familiar with, and is more likely to become a driving force that fosters a hybrid model, where long-term interest binding will be at the core of any project's market strategy.