Echo, founded by Jordan Fish “Cobie”, today announced the launch of its new product Sonar. Unlike the previous community wheel product “Little Circle”, this tool will support anyone to conduct public token sales on the platform. An increasing number of VCs are supporting retail investors for early-stage investments, showcasing a shift in the current investment market. The emergence of Sonar also expands this model into a broader scope. Will it be able to replicate the glory of the 2015 “ICO” boom?

What is Echo

Echo is by crypto KOL Jordan Fish, better known as Cobie.@echodotxyz“Founded in March 2024. Cobie was the Head of Growth at Lido and hosted the popular Web3 podcast UpOnly. The core of Echo lies in the ‘leading investment recommendation mechanism’, where users can create investment communities as lead investors, share projects with members, and earn a share of the profits.

Since its launch, over 30+ cryptocurrency projects have raised funds through Echo, including well-known projects such as Ethena, Morph, Usual, Hyperlane, Dawn, Monad, Initia, MegaETH, and others. A total of 100 million dollars has been raised within a year, among which, in December 2024, MegaETH completed a 10 million dollar financing in two rounds through the Echo platform, with the first round of 4.2 million dollars completed in 56 seconds, and the second round of 5.8 million dollars completed in 75 seconds. This is the largest financing currently conducted by Echo.

Echo’s initial architecture resembles the “Elite Alliance” of crypto investors, inclined to select high-potential projects recognized by a small circle, such as Larry Cermak, CEO of The Block, and Marc Zeller, founder of Aave, who have both created their own Echo communities. Users who wish to join must first answer some questions and undergo relatively strict identity KYC verification. Additionally, certain communities may need to meet specific conditions to access particular investment opportunities. Currently, there are 67 community leaders who have created communities in Echo.

Not the enemy of VC, but a distribution platform for VC.

In January of this year, Echo stated that some venture capital firms had attempted to prevent the founders from offering better terms to the Echo community, or simply to stop the community from selling unless it was done in the form of a later high-valuation issuance. Alexander Pack, co-founder of Hack VC, remarked, “The reason is that while tech 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, the profits of the VCs will be compressed.

Rob Hadick, a partner at Dragonfly, also expressed his views on this in the media. He believes that such platforms actually supplement venture capital funding, helping projects build stronger communities while maintaining collaborative relationships with investors. He stated, “However, venture capital firms that cannot provide real value may feel threatened by the rise of these platforms. For those venture capital firms that truly feel the pressure, they either adapt or go out of business.”

More and more “value-creating” VCs are joining this camp, with Paradigm, Coinbase Ventures, Hack VC, 1kx, and dao5 all creating groups on the Echo platform. Additionally, the emerging hot ecological niche “Agency” has also posed many threats to these VCs. As Rob said, VCs that have yet to find their positioning at this stage have gradually faded from the historical stage.

In the current market where the “attention economy” is being continuously consumed, will the next step welcome a phase of “value return”?

Dreaming back to 2015, is Sonar bringing back the “ICO craze”?

In this regard, Matt O’Connor, co-founder of the currently popular ICO platform Legion, stated that “the relatively relaxed regulatory environment in the United States may promote the revival of public token sales,” and mentioned that “once ICOs regain vitality, they may shift their focus away from the memecoin craze.” In the current market environment, there is a decreasing number of projects truly focused on product development, while a significant amount of wealth is accumulating behind the scenes.

However, at that time, the state of Echo could not solve the problems of a broader market, and even the project team itself stated, “We don’t like this organizational structure.” Thus, the founding team, including Cobie, began planning a more traditional “ICO” platform early on. In February, founder Cobie revealed that they would develop an ICO platform, stating, “There is currently no good way to conduct an initial sale; your best option might be CoinList, but it has significant limitations for several reasons.” Three months later, this product was launched.

Sonar is a tool that allows founders to self-host token sales. Sales can be conducted in various forms (auctions, options swaps, points systems, variable valuations, and distribution scales, etc.), with options to choose chains like Hyperliquid, Base, Solana, or Cardano. It provides a variety of configurable compliance tools, integrated with Echo’s electronic identity authentication passport (existing users of Echo can register to use Sonar with one click). As a result, the issuing team can also select the regions in which they want to sell (for example, prohibiting UK residents from purchasing, or setting a longer lock-up period for users in a certain region).

Sonar attempts to combine community-driven sales from the ICO era with the current demand for policy Compliance, aiming to address the regulatory and privacy issues faced by ICOs. It introduces a more flexible “sales model” to replace the previously popular “LaunchPad” format in the market. It encourages project parties to build their own communities and communicate directly with investors, rather than relying on Echo’s platform community. This model allows investors to research projects more deeply, rather than pushing a project to other uninterested users who are not familiar with it. However, this model also faces the risk of information asymmetry.

Comparison of IPO, ICO and Sonar, Chart: Rhythm BlockBeats

In the last paragraph of the Sonar release document, Echo officials stated that their goal is “to be as close as possible to the market dynamics of the ICO era while providing compliance tools for founders who do not want to go to jail.”

The first launched project - Plasma

At the same time that Echo released Sonar, PlasmaAnnounceA portion of the official token $XPL will be sold using Sonar. Plasma is a brand new blockchain built specifically for stablecoins, which will run in parallel with the Bitcoin network and is fully compatible with EVM, allowing developers to build Ethereum-like applications on Plasma.

Plasma will offer 10% of its total supply of XPL tokens in the sale on Sonar, aiming to raise $50 million. This 10% corresponds to 1 billion out 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 as the Founders Fund’s investment in Plasma’s equity and token warrants last week.

Prior to this, Plasma raised $24 million in seed and Series A funding, with 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, previously known as DAI) into the Plasma vault on Ethereum. The allocation will be determined based on each participant’s time-weighted share of the total deposits in the vault. After the deposit period ends, positions will be locked until the beta version of the Plasma mainnet goes live, after which XPL tokens will be distributed.

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

With the gradual passage of stablecoin legislation, the increasing recognition of cryptocurrency companies led by Coinbase by traditional capital, and the SEC’s “friendly” attitude, the market phenomena may gradually bring “Compliance” ICOs back into the public eye, and platforms like Sonar may bring a different vitality to a restless market filled with “LaunchPads.”

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