The Web3 space has seen significant changes in how projects raise funds and build communities. Over just a few years, token launch models have moved from Initial Coin Offerings (ICOs) to more organised whitelisting processes, and more recently, to Initial Airdrop Offerings (IAOs). This evolution reflects a deeper understanding of what works, what fails, and what aligns best with the decentralised principles of blockchain technology.
The ICO era
Between 2017 and 2018, ICOs were the dominant way for blockchain projects to raise funds. New tokens were sold in exchange for Ethereum (ETH) or Bitcoin (BTC), often without a working product, registered entity, or investor protections. The barrier to entry was low, and excitement was high.
Projects like Ethereum and Filecoin launched during this time, but for every success, dozens of projects disappeared or collapsed. Many were overpromised and lacked clear structure, leaving participants exposed. What began as an innovative fundraising method quickly turned into a cautionary tale.
The whitelisting phase
As regulators introduced stricter oversight and investors became more cautious, projects introduced whitelisting mechanisms. Potential participants had to register in advance, complete Know Your Customer (KYC) checks, and sometimes compete for limited slots.
Whitelisting brought order, enabling projects to limit access to genuine users and reduce spam wallets. However, it also created opportunities for manipulation. Whitelist spots became coveted assets, often hoarded by insiders. It became common for families to reserve multiple spots, crowding out merit-based participation and compromising inclusion.
Still, whitelisting was a necessary middle ground, a buffer between the ICO free-for-all and what was to come.
The rise of IAOs
Around 2020 and 2021, Initial Airdrop Offerings (IAOs) emerged. Instead of raising capital upfront, projects began distributing tokens freely to early supporters, contributors, or active users of related protocols. This marked a shift from “sell-first” to “build-first.”
IAOs rewarded attention, loyalty, and genuine contribution,not just financial investment. Protocols such as Uniswap and Arbitrum used airdrops to decentralise ownership, jumpstart governance, and reward authentic users. These were not mere marketing gimmicks but strategic community-building efforts.
Compared to ICOs, IAOs carry fewer legal risks since tokens are not sold directly. Unlike whitelists, IAOs are often more open and merit-based, sometimes applied retroactively to reward past supporters.
What’s next?
While IAOs remain popular, newer models are emerging,community quests, on-chain activity rewards, and gamified token distributions. These are refinements rather than entirely new paradigms.
The main evolutionary steps are clear:
ICO → Whitelisting → IAO.
Each phase reflects a story, from unchecked enthusiasm, to cautious gatekeeping, and finally to participation shaped by user involvement.
But this raises a bigger question: Can the next evolution transcend wallets and watchlists to truly reward curiosity, commitment, and meaningful contribution?
Because ultimately, how a project launches is not just a strategy, it signals the values and future it aims to embody.
