When trust remains low and retail investors, burned by past cycles, are wary of being dumped on, are fair launches the emerging gold standard for token launches in 2024? 

What is it? 

A fair launch refers to a token launch, predominantly for fundraising, or other purposes such as governance, utility, or community distribution, where everyone gets equal access to acquire tokens, with no special treatment and no hidden deals. Most token launches favour insiders, founders and key contributors usually, with special perks commonly reserved for the likes of VCs and KOLs who receive heavily discounted tokens in exchange for capital, influence or both. Unlike traditional launches that favour insiders, fair launches prioritize transparency and decentralization and most significantly, the welfare of retail consumers who are fed up being seen as nothing more than insiders’ exit liquidity.  

Mechanisms: 

Fair launches adopt different mechanisms to achieve fairness, some common options include: 

1. Equal Opportunity: Whether you’re a developer, investor, or community member, you get the same chance to acquire tokens. No early access or private deals.

2. No Pre-Mine: Tokens aren’t allocated in advance to team members or investors, ensuring a level playing field.

3. No Private Sales: There are no exclusive discounts or private rounds for VCs and select individuals before the public launch.

4. Transparency: The launch process is open for everyone to see, reducing unfair practices.

5. Community-Driven: Tokens are distributed broadly to empower the community, preventing ownership from concentrating in a few hands.

Not Fair! Retail are over VCs

Over the years, the crypto community has grown increasingly wary of projects funded by venture capitalists (VCs) and other insiders. Here’s why fair launches matter more than ever:

1. Avoid Pump & Dump: VCs often buy tokens at steep discounts during private sales, then sell them quickly for massive profits once the project goes public. This hurts retail investors and erodes trust.

2. Community Buy-In: Fair launches create strong, loyal communities. When tokens are distributed evenly, early supporters feel invested in the project’s long-term success.

3. Eliminates Centralized Control: Fair launches prevent VCs and other insider interests that represent a small group from holding majority control over governance, ensuring decentralized ownership.

4. Positive Market Perception: Projects with fair launches are seen as transparent and credible, attracting genuine interest rather than hype-driven speculation.

A fair launch aligns with avowedly web3 principles of decentralization, fairness, and equal access. By avoiding pre-allocation and favouritism, a fair launch builds trust, ensuring no individual or entity can control the token supply or gain an unfair financial advantage. 

Lessons Learned

Two recent and highly publicised unfair launch failures are HAWKTUAH and QUANT. 

HawkTuah Token experienced a meteoric rise in market value on token launch before collapsing by 95% in less than 24hrs, leaving investors reeling this month. Allegations of insider trading and a pump and dump scheme materialised quickly as many speculated that key players manipulated the market for quick profits and Industry watchdog Coffezilla went for the jugular in an AMA with the founders. While the project team denied any wrongdoing, wallet tracing receipts proved otherwise. Regardless, the lack of transparency and community trust underscored how unfair token launches can lead to significant financial losses and damage to the project’s reputation. Whether it precipitates charges against the team, time will tell. 

Gen Z QUANT became infamous after executing a public rug pull during a live stream on pump.fun this month, deliberately selling off his holdings (USD ~30K) and crashing the token's value. He then created $lucy and $sorry, selling all of them for additional profit of USD ~24K). While the move initially destroyed confidence in the project, the community later revived the QANT, driving an ironic increase in its market capitalization which surely found favour with the r/WallStreetBets community whose irreverent, high-risk trading strategies and meme-driven investment culture were behind the short squeeze of GameStop shares in 2021. 

Source: Lookonchain

Fair Launches

The obvious and most notable fair launch is of BTC, the original crypto. BTC is considered the quintessential fair luanch as there was no pre-mine, ICO or any special allocation to insiders at its inception. We recently posted an article about HYPER which we think is the gold standard in fair launches. While still relatively new and without the benefit of time behind it, we think that projects like HYPE and the Hyperliquid community-first ethos prove that transparency, fairness, and decentralization have the potential to drive long-term success. SUSHI, KAS and AGENT are also considered fair launched tokens.

If you’re preparing a token launch, be it an ICO, airdrop, liquidity mining event or otherwise, you may want to consider a fair launch strategy. Get in touch with us to discuss your strategy.