The Transformation of Financing Strategies for Web3 Enterprises: The Evolution from Token to IPO

Recently, the Web3 industry has seen a surge in IPO activities, sparking widespread discussions within the industry about the transformation of financing strategies. This trend signifies that the industry is gradually aligning itself with mainstream capital markets, reflecting new demands from enterprises for regulatory compliance, investor trust, and long-term development.

The Transition from Token Financing to IPO

Early Web3 enterprises often adopted token financing models, such as ICOs and IDOs. However, this model has many issues:

• Token price fluctuates wildly
• High regulatory uncertainty
• Institutional investors find it difficult to participate
• High pressure on liquidity management

In comparison, IPO has the following advantages:

• Obtain more stable and long-term financial support
• Proactive compliance to reduce legal risks
• Establish a standardized enterprise valuation framework
• Engage a broader investor base

The Deeper Reasons Why Web3 Companies Choose IPOs

1. Establish Regulatory Trust

IPO has become a "certification mark" for Web3 companies to showcase their compliance efforts. Taking a certain stablecoin issuer as an example, it is continually advancing the IPO process, establishing credibility through a standardized disclosure framework to pave the way for entering the traditional financial market.

2. Addressing Token Financing Challenges

Token financing faces many challenges:

• Relying on the exchange for token listing, there is uncertainty.
• Need to provide liquidity or ensure market making
• Token unlock often triggers significant price fluctuations
• It is difficult to effectively connect the token economic model with actual operations.

These issues prompt companies to seek a more stable IPO path.

3. Expand investor coverage

IPOs enable Web3 companies to reach large institutional capital such as traditional financial institutions and pension funds. The vast asset scale managed by global sovereign wealth funds showcases the enormous pool of funds that IPOs could bring.

4. Flexible Financing Tools

An IPO not only provides a large-scale financing channel but also empowers companies to use stocks as a means of payment for mergers and acquisitions. After going public, companies can continuously utilize diverse capital market instruments to achieve flexible financing.

Outlook for the IPO Market in the Web3 Industry

In the coming years, IPO activity in the Web3 space is expected to increase significantly. The following types of companies may become the main players in IPOs:

1. Centralized exchanges and custodial service providers
2. Stablecoin Issuer
3. Web3 Solutions Company

These companies can enhance institutional credibility, expand their business scope, and strengthen global competitiveness through IPOs.

Conclusion

The rise of IPOs in the Web3 industry reflects a clear shift towards mainstream capital markets. However, IPOs are not suitable for all Web3 companies. Some companies may choose to strategically combine IPOs and token financing to balance multiple objectives such as regulatory compliance, funding needs, and community building.

Companies need to carefully choose the optimal financing mix based on their own business model, development stage, and market strategy. Regardless of the approach taken, enhancing transparency, strengthening compliance, and achieving sustainable growth will be the key to the future development of Web3 companies.