Introduction to Fair Launch in Crypto
The concept of a “fair start” in the cryptocurrency space has been a topic of discussion for years. The idea is to create a system where all participants have an equal chance of success, without any preferential treatment or hidden privileges. However, as the industry has evolved, the definition of a fair launch has become watered down to fit the needs of various token distribution schemes.
The Imperfections of Bitcoin’s Fair Start
Bitcoin, often considered the original “fair start,” has its own set of imperfections. When Satoshi Nakamoto released the Bitcoin white paper in 2008, the promise was to create a peer-to-peer electronic cash system. However, over time, Bitcoin has become more of an investment asset, with a fixed supply that has led to wealth asymmetry in the network. The halving mechanism, which reduces the block reward by half every four years, has also created a system where early adopters have a significant advantage over latecomers.
The DeFi Summer and the Illusion of Fair Launch
In 2020, the DeFi summer brought back the concept of fair launch, with projects like Yearn Finance claiming to have a fair distribution of tokens. However, this “fairness” was short-lived, as the market became flooded with vampire attacks, forks, and food coins. The early insiders of each iteration were continually rewarded, making the concept of fair launch more of a marketing slogan than a reality.
The Pre-Sale Standard and Its Implications
Today, most modern blockchains rely on pre-sales and insider allocations, which can lead to delayed inflation and undermine equity. Ethereum’s 2015 ICO, which raised over $18 million, is a prime example of this. Other projects like Solana, Aptos, and Sui have followed similar patterns, raising hundreds of millions of dollars and distributing large percentages to insiders. This has created a system where users are buying out early supporters rather than investing in the network itself.
The True Meaning of Fair Start
A fair start is not just about percentages on a cap table; it’s about aligning values and rewarding contributions equally over time. The smallest unit of contribution to a network should be rewarded equally, whether it’s a block, a verified human, or computing power. The test is simple: Does the network treat all contributors as equals in the long term? Other questions to consider include: Is the smallest contribution unit clearly defined and open to all people? Are equal contributions rewarded equally over time? Are insider allocations at the network level zero?
Building a Truly Fair Launch
For a truly fair launch, the core protocol must be standalone and provide real utility independent of token price movements. Founders and developers should capture profits from adjacent ecosystems, rather than relying on token appreciation. The benefit should be in creating things that people actually want, rather than speculative incentives. A fair start is the only foundation on which lasting crypto networks can be built, as it creates a system where communities persist because they are treated equally, not because of speculative incentives.
Kirill Avery has been self-taught in programming since the age of 11. At 16, he built Europe’s largest consumer social app (15 million users). The youngest engineer at VK.com and the youngest solo founder accepted into Y Combinator.
Read more about the concept of fair launch and its implications on the cryptocurrency industry at https://crypto.news/fair-launch-is-the-broken-promise-of-crypto-opinion/
