What sets altcoins apart from Bitcoin[1]? A verified Twitter account, token distribution to insiders, or founders who reveal their identities? Might the whole host of altcoin ‘Foundations’ and ‘Labs’ be a factor too? How about the blessing of an angel investor? Or all of the above?
Crypto and DeFi projects rely heavily on venture capitalists and angels who provide not just money, but a support system that helps budding projects look more legitimate. Who’s looking? The countless smaller investors searching for a sign from above.
Ranging from noteworthy players such as Solana[2] to niche experiments like Worldcoin[3], powerful VCs hold and even sculpt different parts of the ecosystems that many enjoy calling ‘decentralized.’
But the question stands – When does a crypto-investor know that things have gone too far?
Be my friend, Godfather
When reporting on crypto-funding rounds and ICOs where powerful investors throw their weight behind nascent projects, journalists tend to focus on the numbers. In doing so, however, they miss out on other forms of currency – Namely press attention, legitimacy, and endorsement.
A case in point – Solana’s Series A funding round raised $20 million[4], with Multicoin Capital taking the lead, along with more than five other major participants. In a statement, Multicoin Capital Co-founder Kyle Samani said[5],
“We’re very proud to lead this round, and we encourage developers everywhere to take a serious look at Solana.”
Less than three years later, Solana is the fifth-largest crypto by market cap[6], beating out both XRP and Cardano’s ADA. Still, Solana is controversial thanks to its token distribution, which saw a large majority of its initial coins allocated to insiders[7], according to Messari Research.
So, what happens when
