Bankless Podcast Episode Summary

Episode: The Return of the ICO | Ryan & David
Date: December 10, 2025
Hosts: Ryan and David
Main Theme: The resurgence of public token sales (“ICOs”) by major crypto projects, the evolution of capital formation in crypto, innovations in auction mechanisms, regulatory changes, and what this means for both Ethereum and the broader space.

Episode Overview

Ryan and David provide an in-depth analysis of the 2025 resurgence of ICOs (Initial Coin Offerings), marking a return to public on-chain capital formation but with major structural, technical, and regulatory advancements since the last ICO mania. Focusing on five high-quality projects (Mega ETH, Monad, Aztec, Infinix, Zama), they break down how these teams are leveraging sophisticated auction processes and, in some cases, new regulatory clarity to make ICOs more fair and compliant. The conversation ranges from their personal experiences with ICOs, auction mechanics, changes in US regulation, the broader implications for Ethereum, and the potential dawn of a new era for Internet-native capital markets.

Key Discussion Points and Insights

1. The Return and Evolution of ICOs

• ICOs are back—but better. Unlike the 2017 cycle (often associated with hype and rampant failures), the current wave features “A-tier, industry-leading projects” utilizing robust, transparent, and fair mechanisms. (David, 00:03)
• Capital formation as a ‘money verb’: Ryan frames raising capital as one of the central actions enabled by DeFi and public blockchains, now more mature after years of learning from prior mistakes. (Ryan, 01:16)
• Historical context: ICOs in 2017 introduced a powerful new way for anyone globally to back ideas, but the ease also led to scams and speculation—which, after regulatory clampdowns, resulted in a move to convoluted distribution methods like airdrops. (David, 03:22)

2. 2017 vs. 2025: Regulatory Evolution and Market Learning

• The market might have self-corrected many issues (incentive misalignment, poorly structured auctions) if allowed to continue experimenting, but US authorities (especially under Gary Gensler) “shut down all the free market ICO experiments.” (Ryan, 06:37)
• The new wave benefits from “better guardrails”: Partial deregulation or “regulatory sandboxes” are enabling more open, but still compliant, ICOs — e.g., by classifying tokens as consumptive goods rather than securities. (Ryan & David, 07:52–08:03)
• “We were forced to do that convoluted mess [airdrops, points] because of the regulatory environment.” (David, 05:30)

3. New ICO Mechanisms – Case Studies

Mega ETH ICO

• Structure: Ran on Echo platform (acquired by Coinbase), 72-hour public auction, max $186,000 per wallet, “massively oversubscribed”—$1.4B in Tether bids for $50M on offer (28x oversubscription). Wide distribution prioritized. (David, 12:21)
• Compliance: AML/KYC via self-certification and a rigorous financial test; accessible to anyone who could pass. (David, 15:33)
• Key Difference: No airdrops; pure sale to engaged users at a significant discount to private market valuation.
• Quote: “I stamp myself as an accredited investor.” (David, 15:48)
• Implication: Democratizes access to early-stage project ownership for retail, not just VCs, unlike traditional markets. (Ryan, 17:28)

Monad ICO

• Structure: Conducted directly through Coinbase; $2.5B valuation (lower than last VC round); 7.5% of tokens sold; 45% sold in first six hours, ultimate full subscription with >100% oversubscription; tokens liquid soon after sale. (David, 27:43–29:20)
• Compliance: Seamless onboarding; first time Coinbase conducted a public token sale.
• Significance: “This is one of the reasons why I’m so excited… Coinbase is pushing this forward… full pipeline from sale to trading.” (David, 27:24)

Aztec ICO

• Structure: Fully on-chain via Uniswap’s new CCA (Continuous Clearing Auction); legally reviewed and deemed a consumptive good (not a security) so US retail could participate; KYC via both traditional means and ZK-passport (privacy-preserving). (David, 31:05; 42:26)
• Sale Details: 15% of supply over 4 days; wide participation; minimum/maximum prices and fair distribution.
• User Experience: “US Token sales are back… US Residents can easily participate.” (Ryan, 32:39)
• Auction Innovation: No unfair edge for whales or bots, minimized gaming, cost-averaged entry for all.
• Quote: “What’s not special about the Aztec ICO? I think the Aztec ICO is probably the coolest sale mechanism that I’ve ever seen in crypto.” (David, 30:55)

Zama (upcoming) & Infinix

• Zama: Sealed-bid Dutch auction using privacy protocol; shielded stablecoins as bids; all participants get clearing price, not individual price (aligns incentives). (David, 47:53)
• Infinix: 5% of tokens via Sonar platform, targeting $50M raise. Fully built product—no mainnet, but proven track record. (David, 54:41)
• Quote (on Zama): “Another auction design mechanism that crypto is using to discover price to do price discovery that we are just not seeing in TradFi.” (David, 49:53)

4. Why These New Mechanisms Matter

• “Fair market discovery tools” and “auction maxis”—decentralized auction innovation is more advanced than TradFi, and is necessary for adversarial, public capital markets. (David, 61:01)
• Projects are now generally mainnet-ready and have years of development history before launching their tokens—a stark contrast with 2017 “whitepaper ICOs.” (Ryan, 39:15)
• Discount for public: New pattern is retail gains entry at a price below last VC rounds, flipping the private/public order found in traditional US capital markets. (David, 59:12)
• Quote: “Can you imagine if that happened to something like Uber… pre IPO, all early drivers and users got a discounted allocation?” (Ryan, 59:49)

5. Regulatory Climate and Cultural Shifts

• The SEC’s posture has shifted post-Gensler, opening the door (potentially permanently) for public token sales if tokens can be shown not to be securities. (Ryan, 34:24)
• Projects are more legally prepared, issuing in-depth opinions for each jurisdiction, giving investors and institutions more confidence. (David, 36:02)
• Market self-regulation: Reputation, public opinion, and open platforms allow projects to curate participants (e.g., Mega ETH rescinding allocations for traders openly planning to dump). (David, 22:05)
• Accreditation and compliance is “bottom-up and top-down”, with most platforms using some mix of self-certification/fairness checks and robust knowledge surveys. (David, 15:33)

6. Takeaways, Risks, and the Big Picture

• Trends: Discounted public allocations, advanced auction design, seamless UX, regulatory clarity, and mainnet readiness are all coalescing to make ICOs relevant again.
• Risks: Exuberance is always possible, but current market participants are “the sharpest they’ve ever been,” and exuberance is mostly confined to niches (meme coins, not major projects). (David, 57:48)
• Networks before DeFi: “Capital formation comes before DeFi… Investing in tokens is actually a pre-DeFi phenomenon and it’s bigger as a result.” (David, 67:47)
• Bullish long-term vision: If crypto-native capital formation continues this way and the tools improve, “Ethereum and crypto become the new New York”—the primary venue for capital markets worldwide. (Ryan, 66:35)
• “We are auction maxis.” (David, 61:01)

Memorable Quotes & Moments (with Timestamps)

• “Not only did we go through the ICO mania and learn about the power of capital formation, but… crypto has also been developing very sophisticated auction price discovery mechanisms.” — David (05:30)
• “I stamp myself as an accredited investor.” — David on Echo platform onboarding (15:48)
• “US Token sales are back in the USA. US Residents can easily participate in the Aztec Token sale.” — Ryan on the end of geo-blocking (32:39)
• “What’s not special about the Aztec ICO? I think the Aztec ICO is probably the coolest sale mechanism that I’ve ever seen in crypto.” — David (30:55)
• “We are so much better [than TradFi]. Dude. We are auction maxis.” — David (60:58; 61:01)
• “Public gets in at a lower price right before the token gets listed… I like that theme. I hope that continues.” — David (59:12)
• “Can you imagine if that happened to something like Uber… pre IPO, all the early Uber drivers, end users, had a discounted allocation slot?” — Ryan (59:49)
• “Moving capital markets on chain is the biggest thing that crypto can do.” — David (68:11)

Timestamps for Key Segments

• [00:03] – Introduction and thesis: Are ICOs back? Why it matters.
• [03:22] – 2017 ICO mania: What went wrong, what we learned.
• [05:30] – The “runaround” of airdrops, yield farming—how ICO bans led to convoluted token distributions.
• [12:21] – Mega ETH ICO: Mechanics, oversubscription, wide distribution, compliance.
• [27:24] – Monad ICO: Launching through Coinbase, significance for compliance and precedent.
• [30:55] – Aztec ICO: First Uniswap CCA, legal framework for US participation, radical UX improvements.
• [41:15] – Aztec CCA: Auction mechanics; “no edge” for whales, seamlessly fair.
• [47:53] – Zama upcoming auction: FHE, sealed-bid Dutch auction, privacy, TradFi contrasts.
• [54:05] – Infinix upcoming sale: No mainnet, but proven app; ICO trend accelerates.
• [59:12] – Takeaways: Discounted allocations, advanced auctions, mainstreaming public ICOs.
• [66:35] – Long-term vision: Ethereum as the new capital market center; Internet-native IPOs.
• [68:11] – Token investing and capital formation predate – and will overpower – DeFi.

Conclusion: A New Era for Public Crypto Markets

The hosts conclude that we are entering a new, more mature era of on-chain capital formation, underpinned by legal innovation, intricate auction design, and a changed regulatory and market landscape. ICOs may finally fulfill their promise of open, fair, and global capital formation, paving the way not just for DeFi and crypto, but potentially for all internet-native finance.

Note:
This summary omits ads, calls to action, and non-content banter while capturing the full depth and spirit of the episode. For further reference, the quoted timestamps map directly to moments in the episode for deeper listening.