Web3 Corporate Financing Strategy Transformation: Evolution from Token to IPO

Recently, the Web3 industry is undergoing a significant transformation in its financing model. More and more companies are beginning to consider raising funds and market recognition through an Initial Public Offering ( IPO ), rather than being limited to traditional Token financing methods. This trend reflects the maturity of the industry and the demand for more standardized financing channels.

The Transition from Token Financing to IPO

Early Web3 companies tended to adopt token financing models, such as ICOs and IDOs. These methods have driven rapid industry growth, but have also brought issues like price volatility and regulatory risks. In contrast, IPOs provide a more stable source of funding, a clearer compliance framework, and a broader investor base.

Strategic Considerations for Choosing an IPO

1. Establish Regulatory Trust: The IPO process can demonstrate the company's compliance efforts to the market, which is especially crucial for trust-driven businesses such as stablecoin issuance and custody services.

2. Overcoming Token Financing Dilemmas: The token model faces issues such as significant price volatility and difficulties in liquidity management. An IPO can provide a more stable valuation framework and financial support.

3. Expand Investor Coverage: Through an IPO, Web3 companies can reach large institutional investors, such as pension funds and mutual funds, that cannot directly invest in cryptocurrency.

4. Flexible Financing Tools: After going public, companies can use stocks for mergers and acquisitions, and can also achieve continuous financing through various capital market instruments.

Prospects of the IPO Market in the Web3 Industry

In the coming years, the following types of Web3 companies are expected to lead the IPO wave:

1. Centralized Exchanges and Custodians: Such as certain well-known trading platforms and custodial service providers.

2. Stablecoin Issuers: Compliant stablecoin projects may choose an IPO to enhance market trust.

3. Web3 Solution Companies: Companies that provide blockchain analysis services for institutions and governments may enhance their global competitiveness through an IPO.

Conclusion

The transition of the Web3 industry towards IPO reflects a positive integration into mainstream capital markets. However, IPOs are not suitable for all companies, and many may choose a hybrid strategy combining Tokens and IPOs. Enterprises need to weigh the pros and cons of both financing models based on their own circumstances and choose the most suitable development path.

This transition marks that the Web3 industry is gradually maturing and integrating into the traditional financial system, while also bringing new opportunities and challenges to the industry.