Neon's Failure & New ICO Rules: What Happened to Coinlist?

In the early summer of 2023, Coinlist announced its first ICO in eighteen months. Three crypto projects, CyberConnect, Neon, and Archway, initiated their token sales. However, within these two months, Coinlist has grappled with a string of setbacks, threatening to derail its operations. 

The crypto community held lofty expectations for this token sale. These high hopes were understandable, considering the promising tokenomics, modest initial capitalization, and limited participant pool. Securing an allocation outside the priority queue was nearly impossible, and the minimum anticipated profit on the OTC market hovered around 500% (hence, users were offloading their accounts at a five-fold premium).

On the day of listing, however, the reality was starkly different from what was anticipated. At the point of listing, Neon was priced at $0.15. The mean price of a Discord account, which could be leveraged to get into the priority queue, stood at $300, while the token's price during the ICO was $0.1. As a result, Coinlist's most eagerly awaited ICO turned out to be a financial setback.

The Archway ICO also inflicted losses on investors, while the results for CyberConnect are yet to be disclosed.

When Neon was listed on Coinlist, users started facing challenges withdrawing their funds. The unappealing asset price on Coinlist’s internal trading platform, coupled with a lack of liquidity, prompted users to rush to shift their acquired coins to other cryptocurrency exchanges. 

For most, their funds only made it to these platforms one to two days later, after Neon's price had plummeted by 50%. According to blockchain explorer data, Coinlist was managing just around two transactions per minute. Not only were the ICO coins pending, but also the stablecoins, which understandably frustrated the cryptocurrency community.

Despite the immense buzz around token sales, the maximum queue (the actual number of participants) for an ICO doesn't exceed 600,000. Some influencers speculated that the platform filters out other users through tactics like account blocking and complex CAPTCHA systems. 

These manipulations have randomly excluded some users from participating in the ICOs.

If a Coinlist account gets blocked, regaining access becomes nearly impossible. Emails to customer support and official Google resources go unanswered, and even when there is a response, the platform's management cites a string of violations committed by the user as a reason for their permanent exclusion from ICOs. 

Such violations include logging in from a different IP address or device, or simply exhibiting suspicious activity. What's considered suspicious, however, is solely determined by the Coinlist team.

The Coinlist team recently announced a revamped mechanism for participating in token sales. Now, each participant must maintain a minimum balance that is necessary to buy an allocation in the token sale (currently $100). This approach aims to filter out users who create large account farms of 100-200 accounts to partake in the ICO and improve their winning odds.

Although this step seems beneficial in theory, it could potentially lead to an even larger number of users departing from Coinlist. Only time will tell if this will be the case.

Coinlist's recent missteps confirm that we've essentially moved past the ICO era. Token sales no longer generate the desired profits, and participation in them should be undertaken with caution, following strict risk management protocols.