The Next Wave of IPOs Will Happen Onchain
- Matt O'Connor Founder · Legion
After the SpaceX IPO, the next wave of IPOs is going to happen onchain. At least that's what Matt O'Connor, the founder of Legion, believes.
Transcript
Recorded at Proof of Talk, Paris.
Hodl Up: Hello! We're here at Proof of Talk with Matt O'Connor from Legion. We already had Matty on an episode back in November, I think.
Matt: Yep.
Hodl Up: That was after you announced the partnership with Kraken, and a lot has happened since. A lot of projects have raised money with Legion. For those who aren't aware of Legion, it's not a launchpad. It's much more than that. It's a merit-based ICO platform, and you have this whole scoring framework so that you prevent users from dumping the token on day one after launch. Correct me if I'm wrong.
Matt: That's certainly an important part of it, yeah.
Hodl Up: And a lot has happened. The Solstice ICO happened. Talk us through what has happened since last November.
Matt: Since we last spoke, and it was a while ago now, six months I guess, we've partnered with Kraken, and we have another Asian exchange we'll be announcing as a partner very soon. We've focused on really making sure that we're working with high-quality projects. You'll notice that the last few TGEs of Legion projects, even while the market has been relatively weak, have all done pretty well. They've outperformed the market for sure. That's been a focus of ours: making sure we're working with solid projects with the right distribution partners. As you mentioned, projects can select the type of investors they want, and what you do with the tokens after the sale is part of those selection criteria. The other big thing we're really focused on, and I'd love to talk about it today, is tokenization: equity, not just tokens. RWAs.
Hodl Up: All right, so let's talk about RWAs specifically. As you said, you're an ICO platform that's expanding. How do you plan on touching that specific sector of crypto?
Matt: It's a good question. You can think of us as an ICO platform, but really what we are is a platform for fundraising, right? We're a platform where investors who want to deploy capital come, so in theory it could be any type of instrument: tokenized yield, tokenized equity. I think more and more people are realizing that just launching a token for a project that doesn't do anything, a playbook that used to work, no longer works. You need to be investing either in a project that generates real revenue and has real users, or in something that has real, tangible value in some other off-chain way. One of the biggest ways to do that is to invest in off-chain equity: real-world assets, tokenized equity. A quick stat: the expected IPO market values of Anthropic, SpaceX and OpenAI, just those three companies together, are more than all the IPOs from 1995 to 2000 combined, even after adjusting for inflation. What does that tell you? Companies are going public later and later, and there's more and more money to be made in these pre-IPO companies. I think that's why you're seeing so much interest in tokenized equity, not just of publicly traded companies but also of private companies.
Hodl Up: So you claim that the next Reddit or the next Figma won't have an IPO, but will rather be on-chain?
Matt: I don't think it'll be a traditional IPO.
Hodl Up: What realistically has to happen for everyone to get into that mindset and realize that being on-chain will be beneficial for them? We talked a lot about regulation last time, and if I'm not mistaken you're focused at the moment on EU and US regulation. Have you also looked at approaching markets in the East, or emerging regions?
Matt: Capital markets operate very differently in different countries because of regulation.
Hodl Up: Very fragmented.
Matt: Very fragmented. The US has its own particular rules, the EU has its own particular rules, and China in particular has very specific rules about its local market. So I don't think there's one solution that automatically works for everyone.
Hodl Up: And it doesn't happen overnight.
Matt: Yeah. I think you have to go market by market and prioritize the right markets, and the US and Europe are pretty good markets. The biggest markets, I mean.
Hodl Up: One thing we didn't talk about is the Pathfinder proposal. Can you walk us through that briefly?
Matt: The CLARITY Act in the US is maybe finally going through. We met with the SEC's crypto task force about a year ago, last summer, to pitch them a proposal roughly inspired by MiCA-style regulation for the US. We said, look, you acknowledge that not every crypto asset is a security, so if we do these things and make these disclosures, we should be able to sell even to non-accredited investors. The SEC has more or less adopted that stance. We still need to see specific rulemaking, but a lot of people don't realize that in ICOs like the Monad ICO, or the Sport.fun ICO that ran on Kraken and Legion, US persons participated. So from a practical risk point of view, the SEC is very different from what it was just a couple of years ago.
Hodl Up: I never thought I would hear the phrase "inspired by MiCA."
Matt: Fair. Well, inspired by what not to do as much as anything.
Hodl Up: Do you think it might scare off potential companies that might work with you, the fact that you're looking for ways to collaborate with a regulator that watches over them as well?
Matt: Maybe, but I think the reputable ones realize that's more of a perk than a friction. If you're breaking the rules, you're probably not building a legitimate business, because you wouldn't have to break the rules if you were building something that actually generates revenue.
Hodl Up: Since we're talking about regulation: these are the first frameworks we're actually using as an industry, MiCA and now the US ones. Do you think they'll last long, or will they be updated in the next few months or years?
Matt: It's a good question. I think they'll be antiquated almost immediately, just because of how fast the industry moves. Then it's a different question of when they will catch up, and that's on the regulators. What's likely is that they'll release a body of regulation that catches up to almost the present...
Hodl Up: And immediately everything will change, because the rate of evolution is so high.
Matt: And then eight years later they'll catch up again. That's the way things work.
Hodl Up: Crypto right now is merging with traditional finance in every sector. Do you think we can coexist as two industries, given that traditional finance is way slower than crypto in how it works and moves?
Matt: Absolutely. I think it comes down to the rails. Maybe there are sandboxes that get carved out, and you knowingly opt into the riskier sandbox. It's more about educating people and letting them make their own informed decisions rather than trying to prevent them from doing things outright. I hope we move more in that direction.
Hodl Up: Last time we talked, the ROI for people who participated in sales on Legion was around 3x, I think. What's the ballpark number now?
Matt: That sounds about right. The last couple of sales have all done at least around 2x, and some have done considerably more. The last few launches have all consistently performed well, so I'm proud of that record.
Hodl Up: Well, ICOs are coming back, just not only for tokens.
Matt: Not only tokens.
Hodl Up: I have one last question. What's your biggest takeaway? I know Proof of Talk isn't finished yet, but what does the room sound like here?
Matt: Everyone's building on Canton. That's one of the biggest takeaways.
Hodl Up: And suits and ties. Look at us.
Matt: Everyone's building on Canton because they're building for institutions, and there are way more suits and ties than at any other conference I've been to.
Hodl Up: Well, Matty, it was such a pleasure to catch up with you. Thanks again for your time. We should definitely do this every six months, right?
Matt: Happy to. Thanks for having me.
Hodl Up: Thank you. Cheers.
Key takeaways
- Legion describes itself as a fundraising platform, and its scope is widening from token sales to tokenized equity and other real-world assets.
- Since November, Legion has partnered with Kraken and says another Asian exchange will be announced as a partner soon.
- Matt says recent Legion TGEs outperformed a weak market, with the last few sales returning at least around 2x.
- Legion pitched the SEC's crypto task force a disclosure-based proposal loosely modeled on MiCA to open sales to non-accredited investors.
- Matt expects new crypto rules in the US and EU to be outdated almost as soon as they arrive, because the industry moves faster than regulators.
- His read of Proof of Talk: institutions are here in force, and many teams are building on Canton.
Six months after the Kraken partnership
Recorded at Proof of Talk in Paris, this is Hodl Up's second conversation with Matt O'Connor of Legion. The first took place in November, shortly after Legion announced its partnership with Kraken. Legion runs merit-based ICOs: projects choose the kind of investors they want, and a scoring framework rewards participants who hold rather than dump on day one.
A lot has moved since then. "We've partnered with Kraken, and we have another Asian exchange we'll be announcing as a partner very soon," Matt said. This episode covers Legion's track record, its push into tokenized equity, the regulatory proposal it took to the SEC, and how crypto and traditional finance can share the same rails.
Legion's record and its move into real-world assets
Quality over volume
Matt said Legion's focus since November has been on working with high-quality projects and the right distribution partners. The results show up in post-launch performance. "You'll notice that the last few TGEs of Legion projects, even while the market has been relatively weak, have all done pretty well. They've outperformed the market for sure."
The hosts recalled a return of around 3x for participants the last time they spoke. Matt said that sounded right and added that "the last couple of sales have all done at least around 2x, and some have done considerably more."
From token sales to tokenized equity
Matt reframed Legion as a fundraising platform where investors come to deploy capital, which in theory covers any instrument, including tokenized yield and tokenized equity. He believes the old playbook of launching a token for a project that does nothing has stopped working. "You need to be investing either in a project that generates real revenue and has real users, or in something that has real, tangible value in some other off-chain way."
He backed the case for pre-IPO access with a comparison: by his account, the expected IPO values of Anthropic, SpaceX and OpenAI combined exceed all IPOs from 1995 to 2000, even adjusted for inflation. "Companies are going public later and later, and there's more and more money to be made in these pre-IPO companies," he said. Asked whether the next Reddit or Figma will skip the stock market for an on-chain listing, Matt answered: "I don't think it'll be a traditional IPO."
Regulation, market by market
Legion's proposal to the SEC
Legion met the SEC's crypto task force roughly a year before this recording to pitch a US framework loosely inspired by MiCA. The argument was simple: if not every crypto asset is a security, then projects that make the right disclosures should be able to sell to non-accredited investors. Matt said the SEC has more or less adopted that stance, though specific rulemaking is still pending, and he pointed out that US persons took part in the Monad ICO and the Sport.fun ICO run on Kraken and Legion.
When the host joked about hearing "inspired by MiCA," Matt replied that it was "inspired by what not to do as much as anything." He also rejected the idea that working with regulators scares off good projects: "If you're breaking the rules, you're probably not building a legitimate business."
Fragmented markets and fast-aging rules
Matt stressed that capital markets differ by jurisdiction, so no single model works everywhere. The table below summarizes the regulatory picture he described.
| Topic | Matt's view |
|---|---|
| US | Priority market; CLARITY Act may finally pass; SEC far more open than a few years ago |
| EU | Priority market; MiCA is a reference point, partly for what to avoid |
| China | Very specific rules for its local market |
| Expansion approach | Go market by market and prioritize the biggest markets |
| Shelf life of new rules | Outdated almost immediately; regulators catch up years later |
On how long the first real frameworks will last, he was blunt: "I think they'll be antiquated almost immediately, just because of how fast the industry moves." He expects regulators to catch up to the present, fall behind again, "and then eight years later they'll catch up again."
Can crypto and TradFi coexist?
Matt said yes, and that the answer lies in the rails. He suggested regulators could carve out sandboxes that investors knowingly opt into. "It's more about educating people and letting them make their own informed decisions rather than trying to prevent them from doing things outright."
His takeaway from Proof of Talk supported the point. "Everyone's building on Canton because they're building for institutions, and there are way more suits and ties than at any other conference I've been to."