Echo: revolution in early-stage investment
October 7, 2024
In a crypto ecosystem often criticized for its lack of transparency and fairness, Echo positions itself as an innovative solution. The platform allows qualified investors to collaborate and invest collectively in early-stage startups and tokens. Designed to eliminate the inequalities between influential investors (or KOLs) and their communities, Echo offers a model where all participants have access to the same investment conditions on a unified platform.
Key information
- Echo is a platform that allows users to invest in early-stage startups and tokens.
- Qualified investors can create private groups where they share investment opportunities with their community.
- Members of these groups can choose whether or not to invest in the proposed projects. To participate, users must deposit USDC on Echo via the Base network and join an investment group.
What is Echo?
Echo is a platform that enables community-based investments in early-stage startups and tokens for accredited investors from various countries.
Echo uses the Base blockchain to manage investors' USDC deposits. It is not publicly known if Echo has received funding or a grant to develop its application on this blockchain. According to the Base Grants site projects built on Base can receive a grant between 1 and 5 ETH.
For each investor, a wallet is automatically created on the platform. This wallet is managed by Privy, a third-party service specializing in non-custodial wallet creation. This means that users retain full control of their funds and can export their private key to other EVM-compatible wallets if they wish, at their own risk.
Echo enhances the security of its services with two-factor authentication (2FA), which applies not only to login but also to every investment and fund transfer from the wallet.
Among the upcoming features, Echo plans to offer yield on stablecoins held by users on the platform. This information was shared in September on Echo’s X account, although the details about the protocol used to generate this yield remain unknown for now.
Additionally, Echo is working on integrating the Ethereum Name Service (ENS). Currently, investors can verify their identity via email, their X account, or through a KYC process when making an investment. The addition of ENS would improve decentralized identity management on the platform.
The projects that have raised funds via Echo since its launch include: Ethena, Wildcat, Hyperlane, OneBalance, Sphere, Dawn, Monad, Initia.
Initia was one of the most successful fundraises on Echo, managing to raise $2.5 million from investors on the platform in less than two hours.
The last fundraise on Echo set even bigger records by Usual Money that successfully raised $1.5 Million in a few seconds.
Thesis
In recent years within the crypto ecosystem, many projects have allowed KOLs (key opinion leaders, such as media figures, influencers, etc.) to invest in early-stage tokens in exchange for visibility and promotion of the project. In such cases, these public figures have access to these tokens at discounted prices, creating an unfair system between them and their community.
Echo’s goal is to rebalance this dynamic by promoting fairness among investors, regardless of their influence or status. If an investment is profitable, the creator of the investment group receives a percentage of the profits made by their group members. This gives them a financial incentive to share opportunities that are profitable to the group's members. They only make money when their community makes a profit. Group "leaders" can only share opportunities when they invest themselves under the same conditions: same prices, same vesting schedules, same terms.
Access to the Echo platform is not limited by the size of participants' portfolios. Before joining, users must indicate their primary country of residence and complete a questionnaire to determine if they are eligible to invest according to their country's regulations. This step ensures compliance with local laws and investor protection.
Some groups, such as those created by Larry Cermak or Marc Zeller, require additional knowledge tests. These tests assess investors’ understanding of the sector before offering them access to specific investment opportunities within these groups.
Key figure behind Echo: Cobie
Cobie has been a pillar of English-speaking Crypto Twitter (CT) for over 10 years (since 2013). He is an active member who has built a solid reputation. He has also contributed to the ecosystem through his podcast Up Only with Ledger Status and his Substack (very little activity recently).
With more than 700K followers on Twitter, Cobie's real name is Jordan Fish (formerly known as CryptoCobain). Cobie also worked on Lido before the protocol's launch, before handing over the reins to Konstantin and Vasiliy. Beyond Lido, Cobie has also invested in other protocols:
- Ethena via Echo
- CowSwap
- Monad
- Gearbox
- MegaEth
- Fortunafi
- many other projects
Cobie is well-known on Crypto Twitter for his critiques of the ecosystem through his personal Substack, but also for his humor and lighthearted approach to different aspects of the industry. This tone can also be found on Echo’s Twitter today: between jabs at customer support and the challenges of launching a community investment platform requiring significant legal resources, Cobie’s signature is evident in the tweets shared on the account.
No Token planned
Although Echo facilitates investment in tokens and startups, the platform has no plans to release a token or point system.
“Echo Points don’t exist. If you believe you are receiving Echo Points, then they exist. But in reality, no.” - states the website.
To access the platform, you need an invitation code. This code offers no reward to the person who shares it. Here are 3 codes if you are interested in this type of investment:
Echo cumulative funding
In October, echo announced that cumulative funding actually mounted to $20M. The first $10M in funding took 6 months.
Conclusion
The platform designed by Cobie echoes the systemic problem identified by many participants throughout the crypto industry's growth cycles. Influencers, media, and well-connected investors have access to deals with favorable prices and terms for their portfolios.
Echo aims to level the playing field for all ecosystem participants, addressing a long-standing demand from individual investors who previously lacked access to these opportunities reserved for big wallets.
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