Visa-backed crypto project to launch ‘fair’ token offering instead of ICO

Web3 entertainment platform Playbux will be raising $150,000 from the public via a token sale later this month. Rather than securing the funding through an initial coin offering, Playbux is giving pre-listing access to engaged users of the platform through a so-called fair community offering. This will be handled by crypto investing platform Raiser.

The fair community offering (FCO) creates a ranking of a project’s users based on things like on-chain activity, referring other users, taking educational quizzes and following its X profile, Raiser co-founder Kori Leon said. Based on their ranking, users have a chance to invest in some amount of a project’s token before its listing on centralized exchanges.

The new community fundraising mechanism presents an alternative to initial coin offerings (ICOs), which were a common fraud vector in earlier days of crypto.

Newsletter

Subscribe to The Breakdown

Between 2017 and 2018, crypto saw a wellspring of ICOs as buzzy crypto projects crowdfunded their early development. Some of these ICOs helped promising projects get off the ground: Ethereum, for instance, raised roughly $18 million via ICO in 2014, selling the tokens for $0.31 at the time.

But the ability to raise large amounts of capital without reporting requirements or accounting standards lured unsavory actors as well. ICOs created fertile ground for fraud and have mostly fallen out of favor in crypto. The concept has instead given way to new trends, like dispersing tokens for free via airdrops.

Partly as a spillover from the ICO era, centralized crypto exchanges now ask projects to have some token supply locked at launch and some supply vested to prevent investors from dumping too much of the supply, said Leon, who previously worked on the listings team at Binance.

Raiser’s FCO process lets crypto startups meet these more-rigorous listing requirements while offering pre-listing token access to community members who may be less keen to sell their tokens on listing day, Leon said.

The public FCO for Playbux’s PBUX token will happen sometime in late January, Leon said.

Playbux was part of Binance Labs’ incubation program and was added to Visa’s Asia Pacific 2023 accelerator program. The metaverse-focused platform offers shop-to-earn experiences and customizable avatars, per its website.

Get the news in your inbox. Explore Blockworks newsletters:

The Breakdown: Decoding crypto and the markets. Daily.
0xResearch: Alpha in your inbox. Think like an analyst.
Empire: Crypto news and analysis to start your day.
Forward Guidance: The intersection of crypto, macro and policy.
The Drop: Apps, games, memes and more.
Lightspeed: All things Solana.
Supply Shock: Bitcoin, bitcoin, bitcoin.