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A founder of the Web3 product studio argues that venture capital (VC) participation in token launch events has filled the gap left by the decline of initial coin offerings as a fundraising method.
Crypto Ecosystem Reached Current State with Help from VCs and Whales
According to Griff Green, venture capital (VC) participation in token launch events helped fill the void created when initial coin offerings (ICOs) fell out of favor as a fundraising tactic. While critics argue the current system favors VCs and large whales, Green maintains that this ecosystem “got us here” and thus has value.
In written responses shared with Bitcoin.com News, Green, who launched the Web3 product studio General Magic in 2021, acknowledges that VCs also became gatekeepers. This, Green argued, left “communities hunting for airdrops or yield farming opportunities.” However, he asserts that VCs may have provided a solution given the increased regulatory uncertainty, though not an ideal one.
Still, Green admits there are better models but cautions that the goal should not be to exclude VCs entirely, but to establish a system “where everyone can meaningfully participate and capture upside.” The General Magic founder predicts that the VC or airdrop model will be superseded by bonding curve launchpads, which were a success in 2024. The founder believes Web3 projects ultimately need a model that prioritizes long-term sustainability and alignment over “quick flips.”
Green also explained how the novel tokenization protocol known as a quadratic accelerator can be useful in tackling challenges such as manipulation, whale dominance, and rapid sell-offs in token generation events. He further discussed the impact of regulation on the growth trajectory of blockchain projects.
Below are Green’s answers to all the questions sent.
Bitcoin.com News (BCN): It has been said that in recent years the tokenomics of many popular projects have been skewed in favor of crypto whales and venture capitalists. How would you rate the participation of venture capitalists (VCs) and whales in the token launch processes? Have they been more beneficial to the crypto industry, or has their presence hurt the industry’s development?
Griff Green (GG): VCs filled a critical gap after the ICO era when teams needed capital to build but community fundraising got complicated. Because of the VC ecosystem, we had thousands of experiments that got us where we are today, and that’s valuable.
But they also became gatekeepers, and most of the upside got captured in their private rounds – leaving communities hunting for airdrops or yield farming opportunities. It wasn’t ideal, but with regulatory uncertainty, VCs stepped up to provide a solution.
Rating 5/10
I think we’re ready for better models – ones that align everyone’s incentives from day one while still being compliant. The future isn’t about excluding VCs, it’s about creating systems where everyone can meaningfully participate, and capture upside.
BCN: In the early days, blockchain developers were excited to find VCs supporting their projects. Not many of those situations turned out for the good in the long run. From your observation, what is the outlook of innovators in the blockchain industry? Is there still a heightened affinity for venture capitalists and large-scale investors or are the innovators angling more towards retail investors?
GG: Bit of a loaded question! Retail and angel investors often bring more than just money – they’re usually genuinely passionate about the project’s mission. They are the community! And while we shouldn’t discount VCs completely (their networks and experience can be valuable), the VC model feels like a step backward for the blockchain ecosystem, we should have just fixed ICOs.
This technology naturally lends itself to decentralized, community-first fundraising. I mean, what founder dreams of turning VC millionaires into billionaires? The real vision is distributing ownership to your 10,000 biggest fans and sharing the upside of success together.
BCN: Initial coin offerings (ICOs) dominated the token launch aspect of the blockchain industry a few years ago. However, that is no longer the case, despite the increasing number of crypto projects flooding the market. What are the dominant token launch models in today’s cryptocurrency industry, and how effective do you think they are?
GG: The VC/Airdrop model is definitely on its way out. Bonding curve launchpads are dominating the scene, but bonding curves aren’t new, I even launch one with the Token Engineering Commons back in 2021.
This trend exploded on the scene with friend.tech, but pump.fun really changed the game, launching 5.5 million tokens in 2024. Their numbers are wild – they pulled in over $350M in revenue. But more than 95% of those tokens were essentially scams. Pump.fun became more of a casino than a launchpad, and most participants lose money.
While there’s obviously profit in gambling (those numbers don’t lie!), serious projects looking to launch tokens need something different. They need a mechanism that prioritizes long term sustainability and alignment over quick flips.
BCN: Regulation is said to have played a significant role in shifting the landscape away from the ICO model to the models we see today. Could you explain how existing regulations have influenced the token launch sector?
GG: Memecoins seem to have exploded onto the scene because regulation pushed out most legitimate use cases. It really feels like for the last several years, building anything more than a memecoin required a lot of weird legal engineering. The irony is that some of the most scammy projects had the least regulatory concerns.
BCN: In your view, have regulatory adjustments benefited emerging blockchain projects and retail and institutional investors, or have they limited their achievements?
GG: Regulation has added little to no value to the decentralized aspects of the blockchain space. They have done a good job at going after criminals, but the rest of their work has only prevented retail and institutional investors from getting n on the ground floor of awesome projects, and in many cases, prevented legitimate projects from launching at all.
BCN: You are said to be one of the architects of Quadratic Accelerator (q/acc), which reportedly tackles issues like manipulation, whale dominance, and rapid sell-offs in token generation events. Can you briefly explain how q/acc works and how it goes about preventing unfair practices associated with token launches?
GG: Q/acc combines two powerful mechanisms – Augmented Bonding Curves (ABCs) and Quadratic Funding (QF) – to create ecosystem-backed token launches.
Protocols like Polygon sponsor projects to launch tokens by providing their token (POL) as collateral for the project token’s bonding curve. They also provide the matching pool for our flavor of QF, which we call ‘q/acc’. This helps projects get follow-up funding distributed based on how well they attract community support.
The big difference between q/acc and traditional QF? Instead of donations, supporters during q/acc rounds are effectively buying tokens at a discount in the projects they support. What sets q/acc apart from pump.fun is our focus on long-term alignment through vesting.
Projects start with a majority of the token supply, locked for a year and then streamed over the next year. Community members who buy during q/acc rounds get tokens locked for 6 months and streamed over the following 6 months. After the q/acc round, liquid tokens hit the DEX – that’s when the usual crypto market speculation kicks in.
Here’s the coolest part: the real community that believes in the project’s long-term value gets in cheap, before the speculators and because of the bonding curve and lock-ups, the DEX price will always be higher than what the community paid during the q/acc round – at least until their tokens start to unlock.
BCN: With regulation in mind, how does your approach fit into the current regulatory framework?
GG: Every token launched via q/acc is a utility token from day one – they all give access to a token-gated chat room with the project team, plus whatever additional utility the projects bring. For example, Prismo launched its L2 gas token through q/acc.
By focusing on utility tokens, we can operate within clearer regulatory guidelines compared to other token types. The regulatory framework for utility tokens is well-established and relatively straightforward.
BCN: Pump.fun, which recently ran into problems, is said to have started a model that seemed highly decentralized by releasing tokens without any form of presale or team allocation. Many analysts have reportedly criticized that model, considering how it eventually played out. Can you explain to our readers the difference between your team’s creation and that of Pump.fun, highlighting how your project can prevent the pitfalls encountered by the former.
GG: Pump.fun proved that bonding curves are great for launching tokens. The price discovery happens on the way up and even at low market caps, there’s liquidity. But they haven’t really helped any real projects beyond memecoins. Open source developers trying to tokenize their projects don’t take off there. The noise to signal ratio is atrocious, and even when you find a serious project, like an AI Agent memecoin, there’s this weird ambiguity where the team has to buy their own token, and no one knows how much they hold or when they’ll dump. Getting ‘rugged’ after buying projects on pump.fun is the norm.
Q/acc is fundamentally different. First, we’re selective – projects go through serious vetting and get protocol sponsorship. Instead of getting a grant, they get a sponsored token launch with locked tokens. Community members who participate in q/acc rounds can get in before the speculators and get tokens at a discount, but their lock-up is half that of the team’s, so they can hold the team accountable to shipping value within 6 months. We also include caps so no one person can dominate the round.
The key difference is legitimacy versus gambling. Pump.fun optimized for short-term trading excitement. We’re optimizing for building token economies for real projects where everyone – protocols, projects, and communities – stays aligned long-term. And here’s what’s really cool: protocols see this as a grant program that actually brings token demand for their governance token – the exact opposite of every other grant program out there.
BCN: Finally, do you believe blockchain token launch models can provide better funding solutions than what we currently have with government projects?
GG: ABSOLUTELY! I’m in this space because I believe we can build better systems than traditional government infrastructure using blockchain tech. The key insight is looking at nonprofits – they’re effectively the free market’s response to government failure. When governments don’t provide value people demand, we create nonprofits.
So here’s the exciting part – if we can make providing public goods profitable through tokenization then we can make nonprofits profitable. Imagine someone finding a profitable way to clean rivers, eliminating the need for government regulation. That’s the vision driving projects like Giveth and q/acc – we’re building tools for innovators to make public goods sustainable through tokenization.
We’re starting with ecosystem-level tokenization through q/acc, but the next step is using Giveth to tokenize nonprofit efforts using the GIV token as collateral. Eventually, we want to help local governments create profitable systems for providing public goods to their communities. It’s about making the value of public goods quantifiable. How it will happen, I can only theorize, but it is merely a matter of time.