Echo launches new feature Sonar, can it create a "compliant ICO" market?

Written by BUBBLE, BlockBeats

Echo, founded by Jordan Fish "Cobie", announced today the launch of a new product, Sonar. Unlike previous "small circle" community round products, this tool will support anyone to conduct public token sales on the platform. More and more VCs support retail investors to make early investments, which also shows the change in the current investment market. The emergence of Sonar also allows this model to go to a wider range. Can it reproduce the grand occasion of the "ICO" craze in 2015?

What is Echo

Echo was founded in March 2024 by crypto influencer Jordan Fish, better known as Cobie @echodotxyz. Cobie was previously the head of growth at Lido and has hosted the popular Web3 podcast UpOnly. The core of Echo is the "lead investor recommendation mechanism", where users can create investment communities as lead investors, share projects with members and earn commissions from them.

Since its launch, more than 30 crypto projects have raised funds through Echo, including Ethena, Morph, Usual, Hyperlane, Dawn, Monad, Initia, MegaETH and many other well-known crypto projects. A total of $100 million was raised within a year. In December 2024, MegaETH completed two rounds of financing of $10 million through the Echo platform, the first of which was $4.2 million in 56 seconds and the second was $5.8 million in 75 seconds. This is the largest financing currently conducted by Echo.

Echo's initial structure was similar to an "elite alliance" of crypto investors, and it tended to choose high-potential projects recognized by a small circle. For example, The Block's CEO Larry Cermak and Aave founder Marc Zeller have created their own Echo communities. If users want to join, they first need to answer some questions and undergo relatively strict identity KYC certification. In addition, some communities must meet certain conditions to obtain specific investment opportunities. Currently, a total of 67 community leaders have created communities on Echo.

Not the enemy of VC, but the distribution platform of VC

In January of this year, Echo said that some venture capital firms had tried to prevent founders from offering more favorable terms to the Echo community, or simply prevent community sales, unless it was in the form of a later high-valuation issuance. Hack VC co-founder Alexander Pack once said that "the reason is that although technology investment is generally a positive-sum game, capital allocation is a zero-sum game", which means that if the project opens up space for community financing, VC's profits will be compressed.

Rob Hadick, partner of Dragonfly, also expressed his views on this in the media. He believes that such platforms are actually a supplement to venture capital funds, helping projects build stronger communities while maintaining partnerships with investors. He said, "But venture capital firms that cannot provide real value may feel threatened by the rise of these platforms. And for those venture capital firms that do feel the pressure, they either adapt or go out of business."

More and more VCs that can "create value" have joined this camp. Paradigm, Coinbase Ventures, Hack VC, 1kx and dao5 have all created groups on the Echo platform. In addition, the hot niche "Agency" that has emerged in recent years has also posed many threats to such VCs. As Rob said, VCs that still cannot find their own position at this stage have gradually faded out of the historical stage.

As for the current market where the “attention economy” is continuously being consumed, will it be able to usher in a stage of “value return”?

Back to 2015, Sonar brings back the "ICO craze"?

In this regard, Matt O'Connor, co-founder of Legion, another hot ICO platform, said that "the current relatively relaxed regulatory environment in the United States may promote the recovery of public token sales" and "once ICOs regain vitality, they may shift their focus away from the memecoin craze." In the current market environment, the number of projects that truly focus on product construction is decreasing, while a lot of wealth is accumulating behind the scenes.

But at that time, Echo was not able to solve the problem of a wider market, and even the project owner said, "We don't like this group structure." Therefore, the founding team, including Cobie, began to plan a more orthodox "ICO" platform early on. In February, founder Cobie revealed that he would develop an ICO platform and said, "There is currently no good way to conduct an initial sale. Your best choice may be CoinList, but it has great limitations for several reasons." Three months later, the product was launched.

Sonar is a tool that allows founders to host their own token sales. You can sell in the form you want (auctions, option swaps, points systems, variable valuations and allocation sizes, etc.), and you can choose chains such as Hyperliquid, Base, Solana, or Cardano. It provides a variety of configurable compliance tools, which are integrated with Echo's previous electronic identity authentication passport (existing Echo users can sign up to use Sonar with one click). Therefore, the issuing team can also choose the region where they want to sell (for example, prohibit British people from purchasing, or set users in a certain region to lock up longer).

Sonar attempts to combine the community-driven sales of the ICO era with the current policy compliance needs, trying to solve the regulatory and privacy issues faced by ICOs. It also launched a more flexible "sales model" to replace the "LaunchPad" form that was previously popular in the market. It also encourages project parties to build their own communities and communicate directly with investors, rather than using Echo's platform community. This model allows investors to study projects more deeply, rather than pushing a project to other users who are not interested and do not understand it, but this model also faces the risk of information asymmetry.

Comparison between IPO, ICO and Sonar, by BlockBeats

In the last paragraph of the Sonar release document, Echo officials stated that their goal is to "stay as close to the market dynamics of the ICO era as possible, while providing compliance tools for founders who don't want to go to jail."

The first project to go online — Plasma

At the same time as Echo released Sonar, Plasma announced that it would use Sonar to sell part of its official token $XPL. Plasma is a new platform built specifically for stablecoins.Blockchain, which will run in parallel with the Bitcoin network and will be fully compatible with the EVM, allowing developers to build Ethereum-like applications on Plasma.

Plasma will offer 10% of its total supply of XPL tokens in the Sonar sale, with the goal of raising $50 million. These 10% are equivalent to 1 billion of the 10 billion XPL tokens, priced at $0.05 per XPL. According to the team, the fully diluted valuation of the XPL tokens is $500 million, which is the same valuation that Founders Fund invested in Plasma last week for equity plus token warrants.

Prior to this, Plasma raised $24 million in seed and Series A funding rounds from investors including Peter Thiel, Cobie, Tether CEO Paolo Ardoino, Bitfinex, USDT0, and Bybit.

To participate in the XPL sale on Sonar, users must deposit stablecoins (USDT, USDC, and USDS (formerly known as DAI)) into the Plasma Vault on Ethereum. Allocation will be determined based on each participant’s time-weighted share of the total deposits in the vault. After deposits are closed, holdings will be locked until the Plasma Mainnet Beta goes live, after which XPL tokens will be distributed.

XPL token pre-deposits will open on June 9, and the actual sale will begin a few weeks later. Global users can participate, except for UK residents and individuals from sanctioned jurisdictions, while US participants will face a 12-month lock-up period and most other participants will face a 40-day lock-up period.

With the gradual passage of the stablecoin bill, the gradual recognition of traditional capital by crypto companies led by Coinbase, and the "friendly" attitude of the SEC, "compliant" ICOs may gradually return to the public's attention, and platforms such as Sonar may bring a different vitality to the impetuous market full of "LaunchPads".

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