Preface

This report delves into the evolution of the Cryptocurrency market, focusing on the diversified development of token issuance methods and types. It analyzes the current status and future trends of the encryption market. By reviewing historical issuance methods and analyzing different token issuance models, combined with the current market situation, it presents a complete picture of the encryption market to readers.

1. Evolution of issuance methods

In the field of Cryptocurrency, technological innovation is gradually lowering the threshold for asset issuance. Initially, the issuance of Cryptocurrency mainly relied on intensive computing resources for "Mining". With the emergence of ICO (Initial Token issuance) and IEO (Initial Exchange Offerings), project party needs to have certain capital and industry background. The popularization of Liquidity Mining enables long-tail assets to be cold started, and Decentralization projects are gradually emerging. Nowadays, the rise of platforms for one-click coin launch has greatly simplified the process of Token issuance, enabling individuals and small teams to easily carry out asset issuance.

1.1 Diversification of Token Issuance Methods

With the advancement of blockchain technology, the issuance of Tokens has become increasingly diverse and has significantly dropped the technical barriers, allowing users without technical backgrounds to easily participate in Token issuance. These methods are tailored to the needs of different projects and market environments. Here are several common Token issuance methods:

1. Mining (Fari Mining) This is the most common way of Token issuance in the early days, where users earn Token rewards by providing Computing Power to the network and mining new Blocks. BTC (Bitcoin) is the most representative project.

2. Crowdfundingissuance Including Initial Coin Offerings (ICO), Initial Exchange Offerings (IEO), and Initial Decentralized Offerings (IDO). The project party pre-sells tokens to raise development funds.

ICO is the earliest form of Crowdfundingissuance, reaching its peak between 2014 and 2018, with a total fundraising of over 56 billion U.S. dollars, but gradually waning due to regulatory and supervisory issues.

In 2019, IEO emerged as a new financing model, endorsed by well-known Centralized Exchanges, which enhanced project credibility.

With the rise of Decentralized Finance, IDO launched by Decentralizationexchange has quickly gained popularity with its community-driven and Decentralization features, becoming one of the mainstream ways to launch coins in 2021, with a total financing amount exceeding 130 billion US dollars.

3. Liquidity Mining（Liquidity Mining） Users provide Liquidity to the Decentralization trading platform and receive Token rewards. The 2020 Decentralized Finance Summer craze has made Liquidity Mining one of the popular ways of Token issuance, not only enhancing Token Liquidity but also creating new revenue channels for users. Compound pioneered Liquidity Mining, leading to a significant rise in its user base and TVL.

4. Airdrop (Airdrop) The project party distributes Tokens for free to early supporters or specific user groups as a marketing or reward strategy. Airdrop not only helps the project gain popularity but also incentivizes users to participate in the community and project governance. A well-known project, Uniswap, distributed Tokens to early users through Airdrop in 2020, becoming a successful case. Blur pioneered the use of a points system, and Pendle introduced the interest separation gameplay of Decentralized Finance, which led to the birth of the PointFi zone.

5. One-click launch coin (OCTD) In recent years, emerging methods such as inscription, minting, and Pump.Fun's coin issuance, through simple tools or smart contracts, allow users to quickly create customized tokens and conduct transactions without complex operations. This approach greatly lowers the threshold for issuing tokens and promotes the rise of Meme culture.

Figure 1: History of issuance and market cap for different types of cryptocurrencies

With the rise of the Decentralized Finance ecosystem, one-click launch coin platforms like Pump.Fun have simplified the process of token issuance with low cost and automated processes, significantly reducing the threshold for Token issuance. These developments reflect the market's demand for efficient, flexible, and decentralized issuance methods, providing project parties and investors with more financing and participation opportunities.

Figure 2: Number and fundraising amount (in USD) of different token issuance methods

1.2 The number of Token issuances has increased significantly in recent years

With the drop in the issuance threshold of assets, the number of newly added Tokens in the Crypto Assets has experienced an explosive rise from 25 in 2013 to 13,453 in 2024. Especially since 2020, the average annual growth rate has exceeded 150%.

This rise is mainly attributed to the popularity of the ERC-20 token standard, the rise of decentralized finance, the popularity of non-fungible tokens, the emergence of new blockchain platforms, and the rapid expansion of the encryption ecosystem. At the same time, the standardization of technology, the widespread application of smart contracts, the emergence of one-click launch coin platforms (such as Pump.Fun), etc., have further lowered the threshold for coin issuance, prompting more projects and communities to improve their visibility and attractiveness through token issuance.

Figure 3: Number of new Tokens listed on CoinGecko each year

Despite platforms like CoinGecko providing data on new Tokens, the actual issuance of Tokens far exceeds these statistics. In 2024, the number of new Tokens surpassed 2.52 million, showing an explosive rise since 2020. This not only highlights the activity of the crypto market but also underscores the increasing importance of Tokens in project development.

Figure 4: The annual issuance of new Tokens (including the Solana ecosystem and Pump.Fun)

2. In-depth Analysis of Different Token Issuance Methods

The evolution of Cryptocurrency issuance models reflects the emphasis on community participation and fairness. From the initial Mining issuance to community-driven models, and now to mechanisms such as IDO and Token Airdrop, the role of the community in the Cryptocurrency ecosystem is becoming increasingly prominent. For example, DOGE has promoted its value rise by strengthening its community culture and values, demonstrating not only the key role of the community in driving project success, but also the importance of community-driven models in the development of Cryptocurrencies.

IDO and Airdrop and other new issuance mechanisms further promote the Decentralization of Token distribution, enabling a wider range of users to participate in the early development of the project. This not only enhances the fairness and transparency of the project, but also reflects the Cryptocurrency industry's pursuit of democratic and inclusive values, as well as demonstrating the innovation and adaptability of Cryptocurrency.

2.1 Miningissuance: The main issuance method in the early era of clone coins

In the early development of the Blockchain, most altcoins were Cryptocurrency projects based on BTC code with modifications, such as Litecoin, Feathercoin, Namecoin, Dogecoin, and Primecoin. The fair Mining issuance model of the altcoin era originated from BTC, relying on Computing Power competition to distribute Tokens, which was the main issuance method in the early stages of the encryption market. Token distribution through Decentralization Mining allows participants to compete for new minted Token rewards using computational resources, providing security for the Blockchain network and creating a relatively fair Token distribution mechanism. Today, a few altcoins like Litecoin and Dogecoin still hold an important position in the Cryptocurrency market as representative projects of early AltCoins.

Figure 5: Market Cap (USD) of early clone coin issuances

2.2 ICO Craze: EOS and other star projects rise

ICO (Initial Coin Offering) is an innovative financing method for blockchain projects, similar to IPO in the stock market. The blockchain project team raises funds from the public by issuing tokens through the internet with the help of White Paper. Since the first ICO of Mastercoin (Omni) in 2013, this model has developed rapidly. In 2014, Ethereum raised about 18 million US dollars through ICO; in 2015, The DAO project raised as much as 150 million US dollars. In 2017, ICO experienced explosive growth, and the EOS project raised nearly 4.2 billion US dollars within a year, becoming the pinnacle of ICO. However, with the security and compliance issues gradually emerging after The DAO suffered a hacker attack in 2016 and China's ban on ICO in 2017, the ICO frenzy has cooled down.

Figure 6: Amount of funds raised (in USD) during major ICO token issuance

2.3 IDO Era: Enhancing the Degree of Token Issuance Decentralization

In June 2019, Binance DEX, the first Centralized Exchange, launched the first IDO project, marking an innovation in the fundraising model of Crypto Assets. Before the emergence of IDO, IEO (Initial Exchange Offering) was popular as a semi-centralized fundraising method. Under the IEO model, the Cryptocurrency exchange is responsible for project review and selection, as well as Token sales and trading on its platform, which enhances project credibility and accelerates the listing process. In 2019, IEO became a popular fundraising avenue after ICO. However, due to the requirement for investors to complete KYC on the centralized exchange and the reliance on centralized platforms for Token subscription, the centralized nature of IEO has also caused some users to be dissatisfied.

In response to this, IDO (Initial DEX Offering) emerged. This emerging Token issuance method achieves freedom of unlicensed financing by conducting Token issuance and trading through Decentralized exchanges (DEXs), such as Uniswap. In IDO, the project party or community can independently deploy Liquidity on the DEX, bypassing the review of centralized exchanges. This enables investors to directly purchase Tokens in the early stage of the project, enhancing flexibility and transparency of participation and dropping centralized risks. IDO provides a broader financing platform for small-scale investors and innovative projects, promoting further Decentralization of the Cryptocurrency ecosystem.

Figure 7: Amount of funds raised during main IDO token issuance (in USD)

2.4 LiquidityMining: Accelerating the Development of Decentralized Finance Ecosystem

In 2020, the 'Decentralized Finance Summer' boom has propelled Liquidity Mining to the forefront of coin launching. Liquidity Mining (also known as Yield Farming) is an innovative financing model in the Decentralized Finance field that allows users to invest in Liquidity pools supported by Smart Contracts and earn returns. This model originated from IDEX's attempt in 2017, was further developed by Synthetix in 2019, and achieved great success in June 2020 with the distribution of the governance token COMP by the Compound protocol, increasing its Total Value Locked (TVL) nearly tenfold in the following five months, becoming a key catalyst for the rise of Decentralized Finance. Other projects in Decentralized Finance (such as Uniswap) have quickly followed this successful example, promoting the flourishing development of the entire Decentralized Finance ecosystem.

Figure 8: Compound TVL rise trend

Figure 9: Uniswap TVL rise trend

2.5 Airdrop Incentive Token: Airdrop draw attention effect is hot

Since 2020, many blockchain projects have adopted the Airdrop strategy to motivate users to expand their impact. The earliest Cryptocurrency Airdrop dates back to 2014, when programmer Baldur Friggjar Odinsson Airdropped AuroraCoin to Iceland citizens. However, the turning point for Airdrop to become a mainstream token distribution method came in 2020, when Uniswap responded to Sushiswap's competitive large-scale Airdrop, and qualified users received at least $1,000 worth of UNI tokens. This strategy not only attracted a large number of users, but also drove the rise of "Decentralized Finance Summer". Since then, projects such as DYDX and ICP have also incorporated the Airdrop strategy into their Token economic models. As a result, Airdrop has become a powerful tool for Web3 projects to attract users, increase awareness, and realize Token Decentralization distribution, and lay the foundation for future applications such as GameFi and SocialFi.

Figure 10: Launch Market Cap of Popular Airdrop Projects

2.6 Community-driven issuance: Community culture drives Token value

In December 2013, DOGE (Dogecoin) was born, and community culture became the core driving force behind its value. This project, which initially satirized cryptocurrency speculation, not only gained popularity for its humorous brand image, but also stood out with its strong community cohesion. The DOGE community has won widespread follow by sponsoring charitable activities such as the Jamaican bobsled team and the clean water project in Kenya. These initiatives not only enhance the project's visibility, but also demonstrate the crucial role of community culture in the value of cryptocurrency. DOGE's innovative model ingeniously combines entertainment with investment, providing inspiration for subsequent meme coins such as Shib, Pepe, and Bonk, and has a profound impact on the development of meme community culture and community-driven tokens.

Figure 11: Total Market Cap of MEME Zone Changes

2.7 One-click launch coin platform: launch coin operation is flexible and convenient

In mid-March 2024, the Solana ecosystem Meme Token represented by BOME sparked a craze, driving the rise of one-click launch coin platforms like Pump.Fun. Pump.Fun is a rapidly growing Memecoin issuance and trading platform in the Solana ecosystem, attracting a large number of users to participate in one-click launch coin. By charging launch coin fees, the platform's income is rapidly rising, with over 10 million USD in revenue within just 3 months. As of August 16th, the platform's total revenue has exceeded 96 million USD, with a daily high of 2.31 million USD, surpassing many mainstream blockchain networks (Base, Arbitrum, BNB, Blast, with daily earnings of less than 1 million USD).

Figure 12: Pump.Fun cumulative income

Figure 13: Daily Earnings of Major Blockchains

3. Token types are diverse: from "digital gold" to MEME craze

With the continuous innovation of blockchain technology and application scenarios, the use cases and types of Tokens are constantly expanding. BTC, as the earliest Cryptocurrency, is mainly used for value storage and transactions, while ETH has expanded the application scope of Tokens through Smart Contracts. In recent years, with the rise of Decentralized Finance (DeFi), the functions of Tokens have become increasingly diversified, giving rise to stablecoins, governance tokens, Non-fungible Tokens (NFTs) for digital art, GameFi Tokens combining gaming and finance, SocialFi Tokens combining social and Meme coins for community entertainment. This not only provides investors with more choices but also promotes the prosperity of the crypto market.

3.1 Historical Trends: Popular Concepts Keep Changing with Historical Cycles

In 2009, the Genesis Block of BTC was born, opening a new era in the encryption industry. Subsequently, the Block chain ecosystem has welcomed many innovative concepts, each of which brings unique value and vitality.

In 2013, Bitcoin had its first Halving. Many developers drew on Bitcoin's code for innovation and optimization, ushering in the 'altcoin era.' According to Gate Research Institute, the total market value of early altcoins was about 918 billion dollars.

With the rise of Ethereum (ETH) and other L1 blockchains, as well as the ICO boom in 2015, the market share of BTC has significantly declined.

Since 2017, stablecoins and CEX coins have gradually gained market follow, while the 2020 Decentralized Finance Summer has further promoted emerging cryptocurrency types such as Decentralized Finance, GameFi, and Meme, demonstrating a trend towards currency diversification.

Despite experiencing multiple market cycles, BTC still dominates with a Market Cap share that has remained stable at around 50% from its peak of over 80% in the early days. The current Market Cap has exceeded $1.2 trillion, earning it the nickname "digital gold".

Figure 14: Market Cap Proportion of Different Concept Zones in the Past 10 Years

In December 2013, the Ethereum White Paper was officially released, marking the arrival of the Programmability Block chain era. Ethereum's Smart Contract technology greatly expands the application scenarios of the Block chain, making its Market Cap surpass 340 billion US dollars in 2021, becoming the second largest cryptocurrency after BTC.

In 2017, Stable Coin and centralized exchange (CEX) platform coins developed rapidly with the ICO frenzy. As of now, the Stable Coin Market Cap has exceeded 160 billion US dollars, and the CEX platform coin Market Cap has also exceeded 90 billion US dollars. The influence and recognition of the cryptocurrency market continue to expand globally.

Figure 15: Historical popular concepts zone and their current Market Cap

During the period from 2014 to 2017, the demand for anonymous transactions once drove the rapid development of Privacy Coins such as Monero and Zcash. However, with the increased regulatory efforts by governments, the market share of Privacy Coins has significantly declined since 2018, and early Fork coins and clone coins have gradually faded away as innovative projects emerge.

Due to the surge in activity in Decentralized Finance, Ethereum has seen an increase in usage. However, due to the slow processing speed of the mainchain and high gas fees, Layer 2 solutions have emerged to improve Ethereum's scalability. Currently, the market capitalization of Layer 2 zones has exceeded 17.4 billion US dollars.

Decentralized Finance and GameFi zones have risen rapidly since 2020, with Dapps like Uniswap and AAVE providing new solutions for traditional Financial Services. The Market Cap of the Decentralized Finance zone has reached $732 billion. Projects like Axie Infinity and STEPN have attracted a large number of users and funds through the 'Play to Earn' model, showcasing the potential of blockchain in digital ownership and the virtual world, with the current Market Cap at $43.8 billion.

In 2023, SocialFi and BRC-20 become market focuses, combining blockchain with social media and the expansion of the BTC ecosystem, with a Market Cap exceeding 3.3 billion USD.

Figure 16: Proportion of Market Cap of Different Currencies Trend

Since 2020, the crypto market has gradually shown a trend of segmentation and specialization, with emerging Token appearing like mushrooms after the rain.

The issuance quantity and variety of new Tokens are showing explosive breakthroughs, with MEME, GameFi, Decentralized Finance, and Non-fungible Token becoming the market focus, even maintaining a relatively high proportion during the Bear Market cycle from 2022 to 2023.

MEME Token zone performed the most eye-catching, rising far beyond other tracks, Market Cap has exceeded 400 billion US dollars, reflecting investors' sustained enthusiasm for the field. GameFi, Decentralized Finance, and Non-fungible Token zone have slightly retreated after the peak in 2021.

With the approval of the BTCSpot ETF in 2024, OTC funds are accelerating into the Cryptocurrency market, driving the total Market Cap of encryption to new highs.

Figure 17: The circulation of different currencies rise

3.2 Return to the present: Solana dominates the new coin issuance market share

In 2024, the Meme Token craze swept across multiple public chains, with Solana being particularly prominent. In March, tokens such as Bome and Slerf in the Solana ecosystem became the market focus due to their high return rates. The emergence of platforms like Pump.Fun for one-click coin issuance further lowered the barrier and simplified the process, driving the daily average issuance volume of new coins in the Solana ecosystem to exceed ten thousand. According to Gate Research Institute data, Solana accounts for over 60% of the new coin issuance market, far ahead of other public chains.

Figure 18: Daily New Token Quantity of Major Blocks on-chain in 2024

Apart from Solana, the Base chain has also performed remarkably well this year. Thanks to the support from Coinbase, EIP-4844 dropMoney Laundering, the MEME craze, and other Favourable Information such as the rise of the Farcaster community, the number of users and the activity level in the Base ecosystem have rapidly increased. Since March, the wealth effect of the 'Degen' Tokenbig pump has further boosted the popularity of the Base ecosystem, and the Tokenissuance has surged, making it the second largest public chain in market share this year, with a share of over 20%.

Figure 19: Proportion of daily new token additions on-chain for major blocks in 2024

Summary

The Token issuance methods in the Cryptocurrency market have evolved from Mining, ICO, IEO, IDO, Liquidity Mining to the current one-click launch coin platform, reflecting the pursuit of community participation and fair issuance. Each issuance method has responded to specific market demands and technological developments. The current diverse issuance models provide blockchain projects with a wider range of financing channels, lower the threshold, improve efficiency, and promote the activity of the community ecosystem.

The continuous progress of blockchain technology has fostered the prosperity of the Token economy. From BTC's role as 'digital gold' to the Smart Contract revolution of ETH, and the emergence of diverse functions such as stablecoins, governance tokens, and utility tokens, the application scope of Tokens continues to expand. With the emergence of innovative concepts such as Decentralized Finance, Non-fungible Tokens, GameFi, and SocialFi, the application of blockchain in finance, art, gaming, and social sectors continues to deepen. With the support of high-performance public chain Solana and the one-click launch coin platform, Meme Tokens have become a new favorite in the market due to their enormous appreciation potential, occupying a dominant position in new coin issuance. The diversification of Tokens provides investors with a wider range of choices and accelerates the overall rise of the cryptocurrency market.