How Merit-Based Fundraising Aligns Projects and Investors | Fabrizio Giabardo

Okay. Hello everyone. Good morning. Welcome to the Prosperia stage. We're going to get started with our go to market stage.

Um we're going to cover everything from hypebased marketing to merit-based fundraising. Um it's going to be a packed schedule. So if you are wanting to listen to the go to market stage, please take a seat here. And without further ado, I'm going to introduce our first speaker for the day, Ev, who's head of operations at Legion and is going to be taking us through how merit-based fundraising aligns projects and investors. So, Ev, go for it.

All right.

Hello. Good morning, everyone. Are we doing headphones or no headphones?

One, two, one, two. Yeah. Mic check. Mic check. Yeah.

Good. All right. Yeah. Yeah. All right.

Okay, cool. I think I'll just roll. Uh, morning everyone. Thank you guys for uh coming. Uh, we have like six people in the audience.

Strong bare market vibes. Mom, if you're watching it, love you. Cool. Uh, so we're going to talk about my favorite topic, fundraising. I guess if you're guys building, you need funds and there are different ways to to raise them.

So, I'm going to cover uh our new approach to public fundraising. So, my name is F. I run operations at Legion. Uh so, I'm going to start with some brutal stats. Uh last year, 84.

7% of tokens are now trading below the uh launch price. Uh so, pretty bad. And uh we believe that it's not a tech problem, it's pretty much structural problem. Um but uh why it's happening so we try to dig deeper into the core reasons. Uh if you look at the private markets uh cap tables are sele selected by projects.

So when you're a project you're raising funds VCs want to give you money and then you try to select the best fund which aligns with the uh where you want to go and uh it's not only about the capital but which value can the fund bring to you. uh and then long-term conviction is a big filter for which funds you want to select. So these things they don't exist in token markets because normally when uh projects try to do a public sale with the token it's a first come first-s serve model uh pretty much anyone can get in um if it's a hot deal um most of the allocation goes to b farms and cibil so we just like try to dig some stats 68% from big sales last year uh went to the bot farms um if it's not first come first serve approach then it's some sort of a ruffle field from the bottom. Some weird structures where projects don't have any control where uh the tokens will go. So there is no filter for merit or conviction and then what happens when people or one user who has a bot farm gets the tokens uh they dump them immediately on day one when DG happens.

U so we believe that it's not about fixing your tokconomics or improving the product, it's better investor selection. Um so our uh philosophy is that we don't really care what's your in your wallet. We care what you've built, contributed and proven on chain. U so we believe that tokens shouldn't go to the people who are the fastest because often times it's not people. It's just bots and scripts.

Uh not to the richest like amount of ETH or Bitcoin in your wallet shouldn't matter. But uh people with verified history and a proven track record should get allocation. So uh to tackle this problem we build a thing which is called legion score. Uh so this score can be bought, borrowed, copied. Uh it basically reflects your onchain behavior community contribution and verify identity.

So it's built on four pillars. Uh the first one is cloud. Uh it's uh when you create your legion account, you connect your Twitter handle and we score it based on your uh activity on Twitter like how how many followers you have, who are those followers, any projects following you, like do you have meaningful engagement? uh so you are getting the cloud score also planning to add telegram to it discord and score other social uh platforms the second thing you can connect is GitHub and then we're going to score GitHub based on your uh commits contributions uh contracts you deployed um and then you're getting developer score and then the last but on the the list is onchain score so you can connect any number of EVM SVM wallets we're going to score all of them and give you uh the score based on the transaction history protocol usage and participation. Um, and then the higher the score, uh, the more access or bigger allocations you should get.

So, more opportunities for value ad network participants. We also, um, recently introduced value ad score, which I'm going to touch in a second. Uh, so this is how uh, your snapshot of the profile looks like. So, you have your overall score, you have specific dev, DGEN, cloud score. So, as you can see, I have a very low dev score because I'm not developer.

So my GitHub I only got 22 260 but I have good onchain history. So I have like pretty high dig score and then I have uh okayish Twitter uh and I get 860. Plus we can also give you some uh achievements based on your activities. So for example if you interacted with Wonderland in the past then you're getting fun Sefue uh or if you claimed arbitum air drop you're getting this achievement and then projects when they're assigning allocation they can filter by whatever they need. So this is more a detailed view of your user profile.

You have social developer onchain score, all your achievements or all your past investments, number of smart followers also like the smart followers who are registered on Legion, their score and then your overall rank. So I have pretty good rank. I'm number 106 out of 280,000 users. So top 1% uh on Legion, which means that when there is a new sale and I applied in the sale, I have a pretty high chance of getting allocation. Um so with that said we also introduced value ad score because we believe that not all capital is equal.

Uh basically based on your past track record uh when it comes to contribution to the projects what do you do with the tokens when you receive them from the sale like do you dump them immediately on day one? Do you go and stake them? Do you buy more on the open market? Uh your score value ad score changes and then also it tracks all your previous um legion uh sales. So for example, my value ad score is 594.

So I probably dump some tokens because otherwise it will be 10,00 um and then when projects are raising legion they can uh select investors with the highest value ad score because those people are more likely not to sell your token or just even buy more tokens on the open market. So some stats from 2025 we got 300 mil uh in deposits uh in the smart contract from all our sales. got to 280,000 registered users on Legion and then launched uh more than 20 projects. Uh we also publish all our postg cell data. Some of the sale data is not pretty.

Uh but what we're trying to do is be as transparent as possible and just show like what users actually do with the tokens after the sale. Couple of uh case studies from last year. So we launched this project called Yield Basis. So this was pretty hype sale. uh they were planning to raise 2 mill um as a race target got almost 200 million in demand deposited in the smart contract in 24 hours uh from 68,000 people uh it was 100x of subscribers so it was very competitive sale a lot of people wanted to get the token uh and only let's do some public math uh like few% of the participants managed to uh get the token and some social scores they went like 7x in one week on on on Twitter Cool.

The next case study is a project called Sport Fun. They're building a fantasy sports product on base. Um they did we did a sale together with Kraken. Uh they got 3.5,000 people who applied into the sale but only 700 people got admitted based on the reputation and the legion score.

So it was again pretty heavily oversubscribed round. A lot of people want to to get in. uh but only selected people uh got based on the value ad score and also internal metrics from sport funds. So they also have their internal score how many people use uh the product. Uh but the the pretty crazy stat is like how many tokens were sold on day one from this sale is 10.

5%. They have I think a detailed uh slide here. So yeah um out of all applications 600 people got accepted 2.4,000 4,000 get rejected and we also identified almost 500 syibles who tried to participate which is like 12% of the sale. None other platforms are doing it.

Um so yeah we're pretty proud that we've managed to cut those people and they didn't get allocation. Um and then investor behavior uh which is again a pretty crazy stat that only 10% of the tokens were sold, 5% of people held them in the wallet, 12 didn't claim it, 12% staked and then 20% transferred to a different wallet. And then there's like the rest is uh vested. Um because you as a project what you want to do is to have as less sell pressure on day one. Ideally you have you want to maximize the buy pressure and minimize the cell pressure uh just supply and demand.

Um and then we're also looking at uh some uh behavior based on the legion score. How many people uh with the highest score like what they did with the tokens. So for example uh people with the highest legion score they are more likely to held partially. So people sell some of the tokens but also held the rest in the wallet. And I guess just like high level where we are moving uh so we are moving from being just a fundraising platform to becoming the world's first ICO underwriter which means four things.

One is sourcing and curation of those deals. uh be honest uh right now there's not many great projects uh you want to launch and probably you don't want to launch mediocre projects. So basically we're spending tons of time doing due diligence and uh picking the projects which are worth backing. The second step is structuring the deal because sometimes it's a great project but the sale terms don't make any sense or they're just like too expensive. So riskreward for investors is not there.

So we're trying to negotiate the best deal in terms of pricing, vesting terms and allocation. how much money a project wants to raise and can raise because what we've I guess learned last year is the best projects they're optimizing not for maximum capital they want to raise but it's more a brand building exercise so they want to get as over subscribed as possible perform great at TG so everyone is happy and it creates good optics for the project price goes up best tech good tech people love it so sale itself so we're working with Kraken right now as one of our uh distribution partners so we co-launch uh sales with We're also adding uh new partners this year. Uh so we're going to announce them soon u across centralized exchanges, neo banks. Uh and then uh the last step which is pretty crucial for us uh is TG support. It's yeah doing a successful sale is 50% of success but uh doing a successful TG is a completely different ballgame because normally the founders is their first token launch.

So they don't know a lot of things like how to work with market makers, what's the good market maker deal, which terms for the exchange is worth accepting, uh how to work with liquid funds, etc. So we're trying to support them as much as possible, which is again it's not our core business, but them having a successful TGE uh is a great optics for us as a as a project. And then yeah, we work with Kraken Clos as I've mentioned and also we have a pretty uh great backers. So we have Vanek, Brian, Howard, Deli, GSR, Crypto.com and Coinbase ventures.

So work closely with them on the on the deal flow and all those uh launches. Cool. Uh so yeah, the future of distribution is merit based. That's what we believe in. Uh if you want to have a chat if you have any questions, please uh hit me up on Twitter or Telegram.

Uh yeah, I don't know. We have two minutes left. Uh maybe if anyone has a question, maybe I can do one question if you guys want. If not, we're going to wrap it up. I think no questions.

Awesome. All right. Thank you so much. Enjoy ETH Denver. Thank you.