Initial coin offerings (ICO) could get a second chance to succeed, according to the co-founder of the Trump family’s cryptocurrency venture, World Liberty Financial (WLF).
“We want to make ICOs great again,” WLF co-founder Zak Folkman said during a panel with Tron founder Justin Sun at the Consensus Hong Kong conference on Feb. 19.
During the conversation, Folkman and Sun discussed the challenges in the mainstream adoption of decentralized finance (DeFi), memecoin regulation and the controversial role of venture capital in crypto.
Some analysts have compared memecoins, like Trump’s Official Trump (TRUMP) token, to ICOs based on similarities such as the capability to attract investment and frequent reliance on endorsements by prominent public figures.
Are ICOs poised for a comeback?
Commenting on VC participation in projects like Trump’s WLF, Folkman said many VCs ignored WLF, forcing the platform to take an anti-VC approach.
“What they want to do is they want to engineer everything so that they win. And even if it’s at the expense of somebody else,” he said. In such a scenario, investors are not wrong for losing confidence in crypto, Folkman noted:
“That’s what’s happened for a long time. Our whole thing is like we want to make ICOs great again. Back in the day, ICOs were good. People were able to get involved in projects, and everyone had access to the same thing. That’s just not what we’ve seen in the last few years.”
Contrary to the vision of VCs — most of which Folkman sees as predatory — crypto is about giving everybody access to the same information and the same opportunities, he said.
“And if you’re going to allow a VC to come in and get something that’s not available to anybody else, it’s almost very anti-crypto, in my opinion,” Folkman added.
“It’s stupid to risk your entire life savings on a memecoin”
ICOs, once a popular method of raising funds in the crypto industry, faced massive scrutiny from US financial regulators in the aftermath of the ICO boom in 2017.
According to Folkman, part of the reason ICOs failed was that there wasn’t enough regulation, which now also appears to be a problem with memecoins.
Related: Regulators to blame for LIBRA memecoin scandal — Coin Bureau founder
“How many people are on Twitter right now complaining that they lost their life savings on a memecoin that got rugged?” he asked, adding:
“I’m not going to give someone financial advice, but I think it’s pretty stupid to risk your entire life savings on a memecoin, right?”
The WLF co-founder went on to say that fair rules are needed so that the industry can apply those rules and regulations in a uniform manner.
Memecoins are the future of crypto, says Sun
Despite the memecoin industry facing uncertainty from a regulatory perspective, Tron’s Sun is bullish on memecoins in the long run.
“I definitely believe memes are the future of crypto,” Sun said during the panel discussion, adding that meme tokens need to be launched in the “right way” and criticizing memecoin rug pulls.
He cited examples of well-established memecoins like Dogecoin (DOGE), which has been around for years, with its market capitalization slowly growing higher as opposed to booming at the start and then going to zero.
“Most memecoins we’ve seen in the market today have a high market cap at launch and then go zero, like everybody loses their confidence in the token,” Sun stated.
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