Circle IPO Sparks Controversy in the Encryption Community: Bias Towards TradFi Causes Discontent Among Native Players

Recently, the USDC stablecoin issuer Circle completed its initial public offering ( IPO ), priced at 31 dollars, which is higher than expected. On the first day, it closed at 84 dollars and rose to 107 dollars within a week, indicating the market's enthusiasm for stablecoins and encryption assets.

There are several reasons why the Circle IPO has attracted attention:

1. As the first listed asset focused on the growth of stablecoins, it meets the long-term needs of investors.

2. The stablecoin market has huge potential, expected to exceed $1 trillion.

3. USDC currently manages 60 billion USD in assets, with an annual growth rate of 91%.

However, there are also some potential risks:

1. The business model excessively relies on interest income.

2. Dependence on partners such as Coinbase and BlackRock.

3. In recent years, revenue and profit growth has been slow.

4. The current valuation is high, approximately 30 times gross profit and 110 times earnings.

The industry has strongly criticized Circle's approach of favoring traditional financial institutions for this IPO allocation while neglecting native crypto participants. They believe that Circle has deviated from the original intention of the crypto industry and has not achieved alignment of interests.

Many long-term supporters of USDC, including encryption funds and companies, received very few or no allocations in this IPO. This practice is considered shortsighted and does not reward those supporters who are deeply involved and continuously invested in the encryption industry.

Critics point out that Circle could have benefited customers through an IPO, enhancing their returns and asset sizes, thus creating a virtuous cycle. However, Circle chose to allocate shares to traditional financial institutions that may not fully understand its business, which completely goes against the spirit of encryption.

Regarding these criticisms, there are also different voices that believe:

1. Encryption funds should not expect free distributions like airdrops.

2. The decision-making power for IPO allocation lies with the issuer rather than the underwriter.

3. Over-subscription leads to a general compression of allocation ratios.

However, critics believe that these explanations do not fully account for Circle's actions. They expect that future shareholding disclosure reports will reveal which investors Circle has chosen to share its growth dividends.

Overall, the controversy surrounding this IPO reflects the conflict between the encryption industry and TradFi, as well as the challenge of balancing the interests of different stakeholders. Whether Circle's choice will impact its future development remains to be seen.