The Evolution of Asset Issuance Paradigms and the Rise of ICM

Recently, news about a certain trading platform raising $1 billion at a valuation of $4 billion has sparked widespread discussion in the community. This event has caused polarized reactions within the Solana ecosystem.

One party believes that the platform is a negative factor in the Solana ecosystem, accusing its actions of harming the healthy development of the ecosystem. The other party praises the platform for innovating the asset issuance model, providing more opportunities for ordinary investors.

In fact, both viewpoints have their merits. The platform has indeed pioneered a new asset issuance model, benefiting a portion of people. However, its frequent token sales have also raised questions. In the current market environment, a valuation of $4 billion does seem a bit high. Compared to last year, market liquidity has significantly decreased this year, and investors have become more cautious.

However, regardless of the platform's intentions, the market will ultimately provide the answer. The underlying questions behind this event are worth our deep consideration: If this financing is successful but the market value subsequently drops sharply, can the Solana ecosystem continue to develop? Will this emerging asset issuance model come to an end?

I believe that this new asset issuance model is unlikely to disappear anytime soon.

From 2017 to 2024, there are mainly two modes of asset issuance in the cryptocurrency field: one is the VC-led VCM model, and the other is the community-led ICM model.

The VCM model is similar to traditional capital markets, where the project side first raises funds, then develops products and businesses, and finally issues tokens for listing. In contrast, the ICM model is the native model in the cryptocurrency field, relying on community power to drive asset issuance, ultimately forming a large market.

Both Bitcoin and Ethereum are typical examples of the ICM model. They didn't initially receive investment from large institutions, but grew through the power of the community. Many of the top cryptocurrency investors were participants in these early ICM projects.

However, since 2018, especially after the rise of DeFi in 2020, the VCM model has gradually become dominant. But by 2023, especially in 2024, the VCM model began to show problems, and more and more retail investors are unwilling to purchase VCM tokens.

Why does the VCM model work effectively in traditional capital markets but struggle to sustain development in the cryptocurrency field? The main reason is that in traditional capital markets, the issuance rights of assets are monopolized, and only top resources and teams can gain access to listing opportunities. In the cryptocurrency field, however, the issuance rights of assets are open, allowing anyone to issue assets.

Although early ICM models such as ICOs, NFTs, and inscriptions have ultimately faded, emerging asset issuance models have innovatively addressed these issues. It cleverly combines permissionless asset issuance and trading, merging the primary and secondary markets, and invigorating the participation enthusiasm of grassroots entrepreneurs and ordinary investors.

In the future, whether it is purely community projects, ordinary entrepreneurs, or top projects, they may adopt the ICM model. Even some projects that have received venture capital can combine the ICM model for asset issuance. This trend indicates that the ICM model is becoming the mainstream asset issuance paradigm in the cryptocurrency field.

Overall, the financing of a certain trading platform is unlikely to deal a fatal blow to Solana. Although it may withdraw some liquidity in the short term, the fundamentals of the cryptocurrency industry have not changed. In the future, there may be more similar asset issuance platforms emerging, further promoting the development of the ICM model.

Although there will come a day when market liquidity is exhausted, that is a challenge faced by the entire industry, not a problem with the ICM model itself. When that day comes, the entire industry may need to start over and wait for a new cycle to arrive.

Finally, it is worth emphasizing that the VCM model does not fully align with the characteristics of cryptocurrencies; the ICM model is the true native asset issuance paradigm in this field.