We contributed to Lido DAO, P2P.org, =nil; Foundation, DRPC, Neutron and invested into 150+ projects
A new era of merit-based, compliant web3 fundraising
Today, at cyber•Fund we’re excited to announce our recent investment in Legion, a web3 platform that aims to democratize access to early-stage investments. Legion was incubated by Delphi Labs and the most recent round was led by cyber•Fund.
We believe that Legion is a perfect example of a product that leverages tools of a cybernetic economy such as on-chain capital formation, mechanism design, and decentralized reputation to make early stage and/or token investments more fair, inclusive, and efficient.
Legion represents a new way of how capital formation is happening in web3. By making web3 investments merit-based, fully compliant and transparent and aligning incentives of early investors and founders, Legion is reinventing the ICO.
The current market structure for crypto fundraising is fundamentally broken.
The story of ICO is a cautionary tale of how innovation can go very wrong. In 2017, we witnessed the meteoric rise of ICOs as a revolutionary fundraising mechanism. Projects like Ethereum had shown the world the potential of tokenization, and suddenly, anyone with an idea and a whitepaper could raise millions overnight and use that capital to build world-changing, groundbreaking products.
But this utopian vision quickly met the reality. Take the case of BitConnect, which raised $2 billion before being exposed as a Ponzi scheme. Or consider the numerous projects that raised substantial sums only to disappear without a trace, leaving investors with worthless tokens and shattered dreams. Even well-intentioned projects fell victim to the ICO craze. Many raised far more capital than they could responsibly manage, leading to misallocation of resources and eventual failure.
The regulatory backlash was swift and severe. The SEC's crackdown on ICOs sent shockwaves through the industry. Suddenly, the once-open floodgates of capital were shut tight, and legitimate projects found themselves in a regulatory no-man's land.
Today, the remnants of the ICO era persist in a very weird form. We see sophisticated schemes designed to extract money from new entrants and community members by promising them unrealistic growth and quick exit opportunities. The promise of democratized access to early-stage investments has been replaced by a system that often benefits only the well-connected and sneaky, where earlier investors force companies attract the next round only to dump their tokens on new entrants.
This broken system of misaligned incentives prevents the crypto industry from realizing its potential as a transformative force in global finance. It's a problem that demands a solution – one that combines the best aspects of ICOs with the necessary protections and accountability mechanisms.
Legion introduces a merit-based platform that leverages the latest regulation, years of capital formation experience, and contrarian thinking to realign the industry towards innovation and democratization of early-stage fundraising. Here's how Legion addresses the key issues plaguing the current system:
Merit-based access. Imagine a world where your ability to participate in early-stage crypto investments or in demand token sales isn't determined by the size of your wallet, but by the value you can bring to a project. Legion's innovative Legion Score does just that. It's a comprehensive reputation system that considers your on-chain activity, social influence, and past behavior. This score opens doors for talented developers, savvy marketers, and passionate community builders who might otherwise be shut out of traditional investment rounds.
Regulatory compliance is no longer a roadblock but a bridge to widespread adoption. Legion leverages the new MiCA framework in Europe and Regulation S in the US to create a clear, compliant path for public token sales. Picture a founder who can confidently offer tokens to a global audience without fear of regulatory repercussions. That's the reality Legion is creating, potentially reigniting the powerful engine of public fundraising that drove the crypto boom of 2017.
Investor accountability transforms token sales from a one-time gamble to a long-term relationship. In the past, investors could flip tokens for quick profits with no consequences. Legion changes this dynamic. By tracking investor behavior across multiple sales, it creates a system where short-term thinking is penalized and long-term value creation is rewarded. It's like creating a reputation system for investors, where those who consistently support and add value to projects gain access to even more opportunities.
Post-raise support extends Legion's value proposition beyond the initial fundraise. It's not just about getting capital in the door; it's about setting projects up for long-term success. With detailed analytics and community coordination tools, Legion helps projects understand their investor base and leverage it effectively.
We at cyber•Fund are incredibly excited by Legion product as it aims to become an integral part of the Cybernetic Economy and fix on-chain capital formation. It envisions a future where:
Access to investment opportunities is based on merit, not just wealth
Venture capital and retail investors collaborate symbiotically powering the techno-capital machine of innovation
Regulatory compliance is streamlined and transparent
People can contribute more than just a financial capital (e.g. time, energy, creativity, connections) to earn a piece of a project’s success
To learn more, visit Legion's website: https://legion.cc/