So, what is CTO in crypto supposed to mean? Generally speaking, it could mean multiple things.
The acronym might mean "community takeover", "community token offering", "coin token offering", or, as most in tech know, "chief technology officer".
In this article, we are going to focus on defining, with examples, community takeovers and then community token offerings.
A lot of these examples happened right in front of us, giving us a front-row seat to how some of these CTOs unfold.
These are things you get to see when you have been in crypto for close to 8 years.
Community Takeovers: When Communities Reclaim Abandoned Projects
When the founding team abandons the project, or the community simply has a bigger vision than the current team, a community takeover happens.
Community takeovers are rapidly gaining traction in the expanding blockchain space, where new projects emerge daily.
For example, chances are you know of a memecoin or NFT project that dropped 97% in value. Perhaps because the biggest token holders dumped the token and initiated an on-chain sell-off massacre. This is exactly when most takeovers happen.
In crypto specifically, having a capped supply on your digital assets is quite common and appealing to retail investors.
Most protocol tokens, memecoins, and NFT collections offer a unique investment opportunity by granting access for anyone to buy most of the supply.
Therefore, anyone who wants to take over can aim to hold most of the supply themselves, or as much as possible, and have the vision to build further value.
A successful community takeover often leads to improved performance and market position, with new optics, as the change in leadership brings fresh perspectives to already promising projects.
Who Can Execute a Community Takeover?
Everyone can do a community takeover.
However, if you are going to put your skin in the game, you might as well ensure that it is a project with potential, and you have a vision you can fulfill.
If the above does not apply, I recommend you leave the door open for someone else.
Not everyone is built to survive the scrutiny, expectations, and grind required to succeed in web3.
If you want to contribute to your token and community without completely taking over, paying for DEX on Dex Screener, or CoinMarketCap is always a good option.
Real-World Community Takeover Success Stories
You see these CTOs everywhere, really, even more so with new memecoins and NFT collections. Let’s break down some of the most popular CTOs, in my opinion, and let’s see if you recognize any of them.
To be honest, when it comes to memecoins and NFTs, we always thought they were speculative investments. Nonetheless, seeing them grow by multiple Xs in comparison to other assets caught our attention.
Fun Crypto Story Time:
A good friend of mine, someone who did not know much about crypto, managed to double a $20k investment on Dogecoin, bagging $40k!
This was then used for a down payment for a new house in sunny San Diego.
So yeah, pretty hard to forget.
Frankly, I did not think that a cryptocurrency with a funny-looking dog would be so successful.
What's often overlooked is that Dogecoin today is fully CTO'd, a community takeover happened, and it still stands as the memecoin with the highest market cap.
Let's take a quick dive and learn about some popular CTO examples.
Dogecoin: The Memecoin That Started It All
Perhaps the grandfather of all memecoins.
Not because it is the oldest, but because it's the first one to make it big.
Little did Billy Markus and Jackson Palmer know that their hilarious plot of buying dogecoin.com, after seeing the popular dog meme go viral, was going to change their lives forever.
Markus, with a strong programming background, forked the Litecoin code, giving birth to the Dogecoin we know today.
This was the first mainstream example of how blockchain technology could be adapted and modified to create entirely new digital assets with different characteristics.
Regardless of your opinion on this memecoin, it is hard not to respect these founders navigating absolute euphoria with no precedent on what a memecoin should be.
After 2015, both Palmer and Markus started to distance themselves from Dogecoin. Neither ditched the project officially, but the project has been community-led ever since.
Markus ended up selling his tokens for a 2015 used Honda Civic. At its peak, his 33M Dogecoin tokens would have been worth over $17m.
Markus today goes by Shibetoshinakamoto on X. He has one of the largest followings in the space, with more than 2M followers.
Before memecoins and NFTs really became mainstream, there was Dogecoin.
And yes, I’m sure there are some lesser-known tokens or NFT projects before Dogecoin, but this one clearly made history, and has held a top 10 spot among the cryptocurrencies with the biggest market caps.
Today, over 4.7 million unique addresses are holding Dogecoin. Robinhood is the top holder.
Even after the recent memecoin frenzy, Dogecoin today is still going strong and part of the top 10 biggest cryptocurrencies by market cap.
An independent, decentralized, digital asset and perhaps the clearest example to understand what a successful CTO is in crypto.
So clear that Elon Musk called it "the people’s crypto".
Perhaps because the project was CTO'd in the first place.
Pudgy Penguins: From Rugs to Riches
If you were around during the NFT bull run, you probably remember this tweet.
To put things into perspective, a Pudgy Penguin NFT was going for less than $2.5k a piece, and Luca Netz made an offer worth 750 Ethereum (ETH), which at the time was around $1.5m.
Today, each Pudgy Penguin is not only worth about $40k based on recent market data.
Those who held a Pudgy Penguin NFT earned one of the biggest airdrops ever seen in web3, and by far the biggest from an NFT collection in this cycle.
The launch of their own memecoin on Solana, $Pengu, allowed the team to airdrop approximately 23 billion PENGU tokens to the community, representing 25.9% of the total 88.88 billion token supply.
The total airdrop was valued at approximately $1.5 billion at the time of launch on December 17, 2024.
Pengu Airdrop Distribution Breakdown:
- Pudgy Penguin holders: about 1.7 million PENGU tokens, a $57,800 value per NFT
- Lil Pudgy holders: around 188,000 PENGU tokens, worth $6,400 per NFT
- Pudgy Rod holders: 105,000-195,000 PENGU tokens, which is somewhere between $3,600-$6,600 depending on rarity traits of the NFT
That is at least $3.6k worth of $PENGU per user, airdropped and tradable by most NFT wallets supporting Solana.
All for free, just for holding the NFT digital asset.
Today, one $PENGU goes for $0.02807 and is available to trade in the best Solana DEXs on the market.
Benefits and Risks of Community Takeovers
Pros
- Decentralization of ownership: A capped supply for most digital assets allows for fractionalized control of the project, removing single points of failure
- Aligned incentives: Those conducting the community takeover usually have a significant stake in the asset, creating better alignment with other holders, in contrast to traditional fundraising methods involving accredited investors and VCs
- Legitimacy and vision: With rugs happening left and right, having the right leader take on the project can ultimately change its course for the better, providing real value while emphasizing practical utility over pure speculation
Cons
- Coordination challenges: The constant shift of top holders can blur coordination and synergy efforts, which can ultimately translate into volatility for the asset
- Technical and legal compliance: Managing smart contracts, treasuries, and roadmaps is no small feat when most things in web3 are built in public, requiring deep technical knowledge and awareness of legal risks
- Regulatory uncertainty: Compliance issues arise with the global aspect of web3. Founders and users spread across different locations and jurisdictions make it an ever-growing challenge to navigate existing laws
Community Token Offerings: Rewarding Early Adopters
Only in web3, you will find companies that allow individuals to buy pre-sale tokens before their product launch, or be financially rewarded with an “airdrop” for using the platform in the past.
Rewarding user engagement with actual money is one of the core features of web3, often increasing user engagement significantly compared to traditional, ad-driven, growth web2 models.
These CTO models are great tools to encourage consumer participation, adoption, and virality.
A presale can be viewed as a fundraising method beyond traditional private equity.
Airdrops are a bit different, and to be honest, a concept that many think is too good to be true.
Understanding Airdrops: Free Money or Marketing?
They can be seen as a token distribution exercise at scale. Winners will be rewarded based on the community token offering framework internally established by the protocol or tool.
Some protocols disclose the airdrop criteria by creating quests, or a set of actions, to boost engagement. Others prefer to keep it private to prevent users who just want to "farm" the airdrop.
So, are “airdrops” essentially free money? Yes, pretty much.
Airdrops can be done by anyone. Common use cases include: protocols, tools, marketplaces, and even memecoins and NFT collections.
The catch is that you typically have to be early, use the platform, do volume, stake tokens, use their cross-chain bridges, refer new users, and more. The more customer engagement, the better.
Our team personally received the $300 airdrop from Genie, a popular NFT aggregator acquired by Uniswap.
They rewarded all past users with at least $300 USDC for completing just a single transaction on the platform.
You read that right, $300 for doing minimal engagement, over just one transaction!
The craziest part is that this is peanuts in comparison to what top “airdrop” farmers actually earn.
For some, "farming" airdrops is a full-time job.
How to Qualify for Future Airdrops in 2025-2026
If you want in on the action, get ready, because more airdrops are on the way.
Popular confirmed airdrops include: MetaMask, Base, OpenSea, Aster, and more!
If you know of a product in web2 that gives you a financial incentive beyond a simple discount, please let us know. We are interested! 😉
Major Community Token Offering Success Stories: From Ethereum to Uniswap
Ethereum: The Blueprint for Token Sales
Vitalik and his team introduced programmable blockchains with smart contracts, leading to a crowdsale of more than $18 million in Bitcoin (BTC) back in 2014.
The raise allowed the distribution of Ethereum tokens across crowdsale participants and the Ethereum Foundation.
This model laid the foundations for future token launches, crowdsales, and ultimately created the infrastructure that many DeFi projects would rely on.
Uniswap: Pioneering the Airdrop Model
In September 2020, Uniswap airdropped 400 UNI tokens to users who had used the platform.
At the time, UNI traded at around $3, meaning that the airdrop rewarded users with around $1,200 in tokens.
An important precedent that has shaped the “airdrop” concept of today.
Now you see all new protocols and tools encouraging users to use the platform early and reap the rewards later, following the same model.
dYdX: Rewarding Historical Activity
The protocol distributed tokens to traders and liquidity providers based on historical activity, using market data to determine allocation.
It's probably the best example of how DEXs could benefit from a community token offering.
Blur: Competing Through Community Incentives
The popular NFT marketplace is known as one of the top competitors of OpenSea.
Even though Blur’s marketplace offers many unique features, the airdrop announcement gave it an edge over OpenSea and Magic Eden.
This announcement shifted a large chunk of NFT traders to prefer Blur.
On the downside, the concept of “airdrop farming” has become more apparent in the NFT space.
Traders were willing to take action within the platform even with little upside.
The number of bots sending low bids to collections and immediately dumping them at the floor price has become a tiring nuisance for those looking to collect rather than trade.
Brave: Web Browser Success Story
Brave is often overlooked despite being a successful example of a web3 browser CTO.
For instance, the Basic Attention Token (BAT), created exclusively by the Brave web browser, shows how tokens can reward user engagement when purchasing products and services within their ecosystem.
Advantages and Challenges of Token Offerings
Pros
- Decentralized funding: Raising funds with VCs and angel investors is now an option. Community token offerings allow founders to raise capital from their current or future user base
- Network effects: Token holders become natural evangelists since they have some stake in the game, helping to attract investors and build a sustainable user base
- Governance and alignment: Participants can use the native token to vote on the product roadmap in an improved democratic model through transparent governance. A popular token utilization feature among most decentralized autonomous organizations (DAOs)
- Enhanced utility: Tokens provide other benefits beyond investment potential, including direct interaction with exclusive platform features and services within the ecosystem
Cons
- Complex tokenomics: Even with more than a decade of crypto projects flourishing left and right, designing long-term, sustainable token economics is still a challenge. Utility, token buy-backs, and staking remain some of the most popular alternatives today
- Attacks and gaming: Competitors may aim to exploit vulnerabilities in the community token offering framework, following predatory and extractive behavior to harm the token and its community
- Market timing dependence and short-term focus: If there are more attractive investment opportunities as the token goes live, expect the token to dump as traders collect liquidity to invest in "the next big thing". In crypto, there is no shortage of speculative trading
- Regulatory challenges: Ensuring each offering remains compliant with regulatory requirements is complex, as many tokens operate differently from securities but still face scrutiny from regulatory agencies and the Securities and Exchange Commission (SEC). Projects must navigate regulatory considerations and conduct proper compliance monitoring, often requiring extensive approval process steps
CTO as Chief Technology Officer: The Traditional Definition
The name is self-explanatory, and not the real focus of this article.
It means a C-suite executive who leads the technology side of a business.
Navigating Legal Compliance in Crypto CTOs
The relationship between tokens and traditional investment vehicles remains unclear.
Unlike real estate investment trusts and other investment vehicles, some crypto tokens could be designed as regulated securities in many jurisdictions.
Projects must work closely with regulatory bodies and ensure responsible development practices. This often involves extensive planning and adaptability to successfully navigate the evolving regulatory landscape effectively.
Understanding CTO Terminology in Web3
We reviewed the most common definitions to understand what is a CTO in crypto.
A consumer token offering can also be considered a CTO. The contrast between how a consumer token offering works and a community token offering is minimal. In our opinion, both terms could be used interchangeably in a general context.
Keeping up with new terminology in web3 is actually quite difficult and tiring. It is a place where acronyms and slang thrive at an unprecedented pace.
Other popular crypto terms that overlap with the CTO concept include: initial coin offerings (ICOs), security token offerings (STOs), consumer token frameworks (CTFs), customer token systems (CTSs), and beyond.
If you struggle to filter the noise and keep up with web3 in general, check out our curated X feed featuring the best news from crypto Twitter (CT).
What's Next: The Evolution of CTOs in Web3
Although creating tokens is extremely easy and cheap, it is packed with complex legal consultation requirements and regulatory compliance. Actual utility could be considered as a security under different jurisdictions to protect consumer interests.
dApps like Base App and Zora are great examples of how a global tokenization market unfolds, turning every single profile, post, and piece of content into a token.
If this takes off, then we can hypothesize that community token offerings will be required in the future for everything.
The real question is, if more tokens are going to flood the market because they are easy and cheap to launch, is a community token really worth it today?
With that being said, you have to really justify CTO'ing a launched project. Perhaps because it already has a loyal user base, growth momentum, and more demand.
Marketing a CTO'd Project
For those looking to CTO a blockchain project themselves, we hope you understand the risk, upside, and best examples in the market.
Suppose you are really serious about doing this. Like, Luca Netz-level serious...
Then check out some of the best crypto and NFT marketing services in New York. Here, we break down the best agencies in web3 if you are really aiming for the moon.
It includes a solid list of resources and industry leaders ready to advise you on more than just marketing. They can also help by consulting legal experts, recruiting, development, and beyond.
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