Opinion by: Darius Moukhtarzadeh, Research Strategist at 21Shares

A new wave of crypto fundraising is emerging, changing how Web3 projects launch and who can invest at an early stage: Community Sales. At first glance, community sales may seem reminiscent of the ICO (Initial Coin Offering) era from 2016–2017. Yet, they represent a significant evolution that better aligns with crypto’s core values of democratization, transparency, and inclusivity.

Projects should include community sales as a core element of their fundraising strategy, besides raising from angel investors and VCs. Professional investors should embrace community sales as they highly increase the chances of sustainable success of Web3 projects. 

The ICO era

The original ICO boom promised broad retail participation and democratized investment opportunities previously reserved for well-connected insiders. The lack of clear regulatory frameworks led to widespread fraud, rug pulls, and market manipulation. This chaotic environment, rampant exploitation, and regulatory uncertainty eventually forced projects to abandon ICOs, shifting instead to private rounds accessible to well-connected angel investors and venture capitalists. 

Private funding problems

While private funding initially brought much-needed stability and credibility, it also introduced new problems. Over the past two years, many tokens have launched at excessively high FDVs (Fully Diluted Valuation) with a low circulating token supply. These tokens entered exchanges with the majority of supply locked and sky-high valuation, which did not meet the demand. Retail investors, attracted by initial hype, often became collateral damage. The result? Devalued tokens and damaged trust. Most of these tokens will most likely never recover. This market dynamic discouraged investments in new projects and undermined community-building efforts, weakening the overall sustainability of Web3 projects.

Airdrops as an unsustainable alternative

Airdrops appeared as another alternative, designed to distribute tokens widely and spark interest in the community for a project. Airdrops frequently fail to produce meaningful, sustainable engagement. Instead, they often became targets for Sybil attackers employing multiple accounts to maximize token gains or airdrop mercenaries hopping from one project to the next, quickly dumping tokens, depressing prices and undermining project credibility. Without genuine financial commitment and interest in the project beyond the airdrop, recipients had little incentive to hold tokens or participate actively in the community.

Community sales as the new cool kid on the block(chain)

Community sales represent a practical, strategic alternative to private funding and token airdrops, offering a structured way to engage retail investors meaningfully and transparently. Modern community sales on platforms like Legion and Echo feature robust regulatory frameworks, with thorough KYC and AML processes ensuring regulatory compliance and security. These inclusive fundraising opportunities require participants to make real capital commitments, even if modest, cultivating genuine stakeholder interest and reducing short-term speculation.

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One of the most significant advantages of community sales is their ability to democratize access. Investors gain entry under equitable terms, similar or sometimes superior to those previously reserved for venture capitalists. With minimum investments often as low as $100, community sales encourage broad participation, helping to build a genuinely decentralized and committed investor base. Investors who financially commit are far more likely to become long-term holders and active community members.

Win-win for projects, other investors, and the community

For Web3 projects, community sales offer profound benefits beyond immediate capital raising. Early community involvement leads to a more distributed investor base, reducing concentration risk and diverse future users. Projects with broadly distributed tokens consistently exhibit more stable prices, higher community activity, and healthier onchain engagement. 

Community sales significantly enhance a project’s market reputation. Embracing transparent, inclusive fundraising sends a clear signal to the market and prospective users — the project prioritizes collaboration and community involvement over the extraction of value. This transparency builds grassroots evangelism, drives organic growth, and creates a loyal community base committed to the project’s ongoing success. Professional investors should embrace community sales and actively encourage their portfolio companies to allocate to the community. 

The broader crypto market benefits substantially from a shift toward community sales. Projects that raise funds transparently and inclusively from their communities tend to attract more stable, supportive investor bases. This stability positively affects token markets, reducing volatility, restoring investor confidence, and accelerating broader adoption and integration of blockchain technologies into everyday financial services and applications.

Community sales represent far more than a revival of ICOs. They mark a mature approach, combining early crypto ideals with today’s regulatory clarity and technological possibilities. 

Projects committed to community sales position themselves for initial fundraising success, enduring market resilience, and community loyalty. The crypto ecosystem, founded on principles of decentralization and inclusivity, should embrace this model to fulfill its potential. Founders should, where possible, include the community when raising capital, as in the end, everyone wins: WAGMI.

The views and opinions expressed in this article are solely my own and do not reflect the views of my employer, 21Shares, or any affiliated organizations.

Opinion by: Darius Moukhtarzadeh, Research Strategist at 21Shares.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Kazakhstan, the Maldives and Pakistan have recently outlined ambitions to position themselves as crypto hubs and build out their digital economies.

Historically, these countries haven’t been top of mind for global crypto firms — though Kazakhstan did have a brief moment in the spotlight as a go-to destination for Bitcoin (BTC) miners after China’s mining ban.

Meanwhile, established financial centers are now in a race to become the world’s leading crypto hub by finding the right balance of regulation, talent, capital and infrastructure.

Here’s how five of them are backing their crypto dreams.

Singapore is the crypto hub with parental guidance

Singapore has long stood out as a financial hub, bolstered by its AAA credit rating, low corporate tax rates and pro-business regulations. With the emergence of digital assets, the Lion City is among the front-runners in the crypto hub race.

Singapore was among the early movers in crypto regulation. Its Payment Services Act (PSA) of 2019 — enacted in 2020 — was one of Asia’s first comprehensive legal frameworks that covered crypto activities. 

The PSA uses the term “digital payment token” (DPT) to define digital representation of value that can be transferred, stored or traded electronically — like crypto.

At the time of writing, there are 33 DPT service providers licensed by the Monetary Authority of Singapore (MAS), the city-state’s central bank. Casper Johansen, co-founder of Singapore- and Hong Kong-based Spartan Group, said license approvals have moved at a measured pace, giving faster-moving hubs like Dubai room to catch up.

“Singapore is more of an institutional financial hub than a retail financial hub,” Johansen said, alluding to the city-state’s limitations on crypto marketing to retail investors.

Singapore’s retail crypto promotion ban includes social media influencer marketing and third-party websites. Source: Monetary Authority of Singapore

“The ban on marketing to retail has not affected Singapore’s position as a global crypto hub. Crypto firms set up in Singapore for the low and transparent taxes, strong regulatory framework and rule of law, world-class professional services, ease of living and global connectivity,” Johansen added.

But cracks have emerged recently, particularly around immigration and hiring policy. In late 2024, concerns flared when the CEO of blockchain analytics firm Nansen, Alex Svanevik, shared that he was denied permanent residency. The government has ramped up efforts to prioritize local hiring amid growing political sensitivity over foreign labor.

Nansen CEO’s permanent residency rejection highlighted Singapore’s tight visa and immigration environment. Source: Alex Svanevik

UAE rolls out the welcome mat for crypto hub status

Unlike other crypto hub contenders, Dubai has a dedicated digital asset regulator, the Virtual Assets Regulatory Authority (VARA). 

Its wide-ranging licensing regime provides clear guidelines — even for NFT platforms — which major economies like the European Union have yet to address. The EU’s Markets in Crypto-Assets (MiCA) framework currently excludes NFTs.

VARA’s clarity is appealing to companies frustrated by regulatory uncertainty elsewhere. Binance, a borderless exchange with no official head office, has had to rethink that model under global regulatory pressure — and the exchange’s ties to the UAE have been growing.

Richard Teng, former CEO of free zone Abu Dhabi Global Market, took over as the CEO of Binance after Zhao, and has recently hinted that UAE is a strong candidate for the exchange’s headquarters, though a decision hasn’t been made yet.

Binance’s first institutional investment is a $2-billion bet from Abu Dhabi-based MGX. Source: Binance

The UAE also provides its own incentives, such as no personal income tax and free zones like the Dubai Multi Commodities Centre (DMCC) and Dubai International Financial Centre (DIFC) offer 0% corporate tax advantages and 100% foreign ownership.

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Crypto firms have reported easier access to banking services in Dubai, which is an improvement over the challenges companies say they’ve faced in the US under “Operation Chokepoint 2.0.”

Hong Kong makes crypto hub push with retail access and staking ETFs

Hong Kong has long acted as a financial gateway to mainland China, where crypto activities like mining and trading remain banned.

Previously, the city had a voluntary licensing regime, when only OSL and HashKey were licensed to serve institutions and professional investors. In Hong Kong, professional investors are legally defined as those with portfolios worth at least 8 million Hong Kong dollars (about $1 million). 

It was later updated to the mandatory regime, launched in 2023, which opened the doors to retail. 

The shift to mandatory licensing marked a turning point. OSL and HashKey became the first exchanges authorized to serve retail investors, while firms like Bybit and OKX withdrew their applications and exited the market. As of now, 10 platforms are licensed, while 15 have either withdrawn or been rejected.

Eight applicants in Hong Kong still wait the SFC’s decision. Source: Securities and Futures Commission

Hong Kong has made further strides with the listing of Bitcoin and Ether (ETH) ETFs, and recently approved staking within Ether ETFs, which is not yet permitted in the US. It has also introduced stablecoin sandboxes under the supervision of the Hong Kong Monetary Authority to trial approved digital assets in a controlled environment.

“Sandboxes are an experiment, so too are staking ETFs,” said Kelvin Koh, a Spartan Group co-founder. “The key point is that these experiments are happening in Hong Kong.”

Hong Kong recently released its ASPIRe roadmap in February 2025, which aims to foster blockchain innovation and fill regulatory gaps to set the city up as a global crypto hub.

Hong Kong’s five-pillar strategy to become a crypto hub. Source: Securities and Futures Commission

Trump 2.0 dreams of crypto hub

US crypto firms were stuck in regulatory gridlock under the Securities and Exchange Commission formerly led by Gary Gensler, whose aggressive “regulation by enforcement” strategy triggered years-long legal battles.

That changed with the inauguration of President Donald Trump, who has embraced a crypto-friendly stance. The SEC has since dropped multiple high-profile cases and investigations, including those against Coinbase, Uniswap and Consensys, signaling a shifting regulatory climate that is prepared to welcome back crypto to US soil.

President Trump declares the US the future capital of AI and crypto. Source: The White House

Binance.US resumed US dollar services in February after 18 months of restriction that followed enforcement action from the Commodity Futures Trading Commission, a $2.7-billion settlement and a four-month prison sentence for ex-Binance CEO Changpeng Zhao.

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Rival exchange OKX reentered the US market in April 2025 after a $500-million settlement with the Department of Justice. Also in April, Nexo announced — during an event with Trump’s son in attendance — that it rekindled its American dream after scrapping it in 2022.

Traditional finance is warming up, with institutional investments flooding into Bitcoin and Ether spot ETFs, provided by some of the world’s largest asset managers, including the $11.5-trillion giant BlackRock.

The financial love affair goes both ways as crypto firms are also increasingly open to integrating into the existing US infrastructure. 

Galaxy Digital listed on Nasdaq on May 16, Circle is considering another IPO attempt, and Hong Kong’s blockchain unicorn Animoca Brands is now eyeing a New York listing, citing Trump’s stance on crypto.

NYC Mayor Eric Adams opens Wall Street to crypto. Source: Yedda Araujo/Cointelegraph

The world’s largest financial center, New York City, is making its own move. Mayor Eric Adams said on May 12 that the Big Apple is “open for business” with crypto companies. 

UK’s crypto hub push goes quiet, but London’s still calling

In 2023, then-Prime Minister Rishi Sunak launched a bold vision to make the UK a global crypto hub, pushing for stablecoins to be recognized as regulated payment instruments and outlining a broader framework to integrate crypto into the country’s financial system. 

That momentum translated into real movement: In April 2025, the UK Treasury released near-final legislation aimed at bringing crypto assets — like trading platforms, stablecoins and staking services — within the country’s regulatory perimeter.

The Financial Conduct Authority (FCA) is now consulting on how to regulate intermediaries, lending and other core parts of the ecosystem, signaling continued regulatory development.

But while the machinery of regulation keeps turning, the political will has cooled. As Arvin Abraham, partner at law firm Goodwin’s private equity group, told Cointelegraph, crypto was once central to Sunak’s competitiveness agenda, but under the current Labour government, that focus has faded.

The new Financial Services Growth and Competitiveness Strategy, spearheaded by Chancellor Rachel Reeves, highlights fintech as a priority without a focus solely on crypto.

“The UK does not feel like it’s prioritizing it as much as it was a few years ago,” Abraham said.

In January, Andreessen Horowitz announced the closure of its UK office to move back to the US. Source: Anthony Albanese

Abraham added the UK remains “one of the best places to set up a new startup,” especially for early-stage capital raising. 

He points to generous tax incentives for angel investors and the unique convergence of finance and startups in London, calling it “probably one of the best cities in the world for fintech-type businesses.” 

In that sense, even without headline-grabbing crypto policy, the UK’s structural appeal still draws Web3 firms — just now with a quieter backdrop.

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Franklin, a hybrid cash and crypto payroll provider, is launching a new initiative that aims to turn idle-sitting payroll into an opportunity for yield.

The new solution, dubbed Payroll Treasury Yield, uses blockchain lending protocols to help firms earn returns on payroll funds that would otherwise sit idle, the company told Cointelegraph in an exclusive statement.

Franklin said its new offering integrates Summer.fi, a decentralized finance (DeFi) lending platform, to allow companies to deposit stablecoin-denominated payroll reserves into smart contract-based lending pools.

These funds are lent to vetted borrowers, and companies earn yields while retaining access to their capital. Companies maintain full custody throughout the process, and smart contracts used are audited to reduce risk.

“The problem that Franklin solves for is two-fold,” Megan Knab, founder and CEO of Franklin, told Cointelegraph. For companies that have already integrated crypto onto their balance sheets, Franklin helps them use those assets to manage their operations, she said.

“But for the broader market, we are enabling business models of the future, where money moves instantly, more intelligently, and to more globally,” Knab added.

Source: Franklin

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Alternative to T-Bills

Franklin said its new offering is an alternative to traditional treasury tools like sweep accounts or T-bills, which often involve operational complexity and limited returns.

Furthermore, it differentiates from earned wage access (EWA) platforms, which enable employees to access their earned wages before their scheduled payday by avoiding additional debt and associated costs.

“Traditional payments in the next decade will run entirely on public blockchain rails as a wholesale replacement to ACH and SWIFT,” Knab said.

She added that if onchain payroll products go mainstream, banks could fade into the background. While technology may replace many banking functions with self-custody tools and smart contracts, regulatory frameworks will still require accountable legal entities.

The result may be “zombie-like institutions” — banks in name only, existing to meet compliance rules but playing a minimal role in actual payment processing, Knab said.

However, decentralized lending comes with risks like smart contract vulnerabilities and market fluctuations. Franklin said it aims to mitigate these by using Summer.fi’s audited contracts and overcollateralized lending.

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Rising interest in yield-generating strategies

Interest in yield-generating strategies within the cryptocurrency sector has surged in recent years, driven by both retail and institutional investors seeking to maximize returns on their digital assets.

On May 16, Solv Protocol launched a yield-bearing Bitcoin token on the Avalanche blockchain, giving institutional investors more exposure to yield opportunities backed by real-world assets, or RWAs.

On May 1, Ryan Chow, co-founder and CEO of Solv Protocol, said the demand for yield-generating strategies around Bitcoin is surging, especially from firms seeking liquidity without liquidating their BTC.

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