"Big funding means big Listing price!"

That’s the impression many people give when hyping airdrops or new projects.

But is that really how it works?

 Let’s break down Crypto Project Funding, how projects actually raise money, why they need it, and whether it all goes into liquidity like many assume.

This is a must-know for every Web3 enthusiast especially Newbies.

First, How Do Crypto Projects Raise Funds?

Crypto projects raise capital through multiple channels, depending on their stage and goals. 

The most common include:

VC (Venture Capital) Investment.

Projects raise funds from crypto-native or traditional VCs in exchange for tokens (with vesting) or equity.

VCs don’t just bring money they offer:

-Strategic advice.

-Network access.

-Market-making links.

-CEX connections.

Examples of VCs are: a16z, Paradigm, Multicoin, Binance Labs, Kucoin ventures, Pantera Capital etc..

Angel Investors.

These are early believers and individual investors who come in very early (often before a product development) based on the team's vision or reputation.

They usually get favorable terms and help shape early traction or influence.

Private/Seed Sales (Presales).

Early rounds where tokens are sold to insiders, advisors, or strategic partners at discounted prices.

These typically involve:

-Lockup periods.

-Vesting schedules.

-Different tiers (Seed, Strategic or Private)

It is usually used to build long-term aligned supporters.

Public Sales (ICO / IDO / IEO).

- ICO (Initial Coin Offering) 

Public sale via project’s own website. 

It is risky and often unregulated.

-IDO (Initial DEX Offering) 

Sale via decentralized launchpads like DAO Maker, PinkSale, or Polkastarter.

-IEO (Initial Exchange Offering) 

 Sale conducted on CEX platforms like Binance Launchpad, KuCoin Spotlight, or MEXC Kickstarter.

Ecosystem Grants & Incentives.

Projects building on chains like Ethereum, Solana, or Arbitrum can apply for grants from foundations or DAOs.

This helps:

-Attract builders.

-Fund innovation.

-Grow the ecosystem.

-No tokens sold just pure funding support.

Community Rounds & Crowdfunding.

Some projects offer fair-launch or community sales via CoinList, Tokensoft, or similar platforms.

They often are Retail-friendly, often oversubscribed and Includes KYC & whitelists.

Other Sources of Funding includes; 

-Hackathon rewards.

-NFT sales (especially for gaming/metaverse projects).

-Launchpad/Accelerator support.

-DAO Treasury allocations (in DAO-governed ecosystems).

Why Do Crypto Projects Raise Funding?

It’s not just to launch a token. Funds are used to:

-Develop the product such as Games, Web apps and various Web3 products.

-Scale the team by hiring More professional hands and paying salaries.

-Build the community.

-Pay for audits & legal services.

-Run operations.

-Provide liquidity by adding tokens to DEXs, working with CEXs, or hiring market makers.

-Reserves to Secure runway for Bear market survival.

-Marketing & Community incentives such as AMAs, onboarding KOLs and ambassadors, paid ads, press release, Exchange Listings etc.

So Is the Raised Money Used Only for Liquidity?

From the above the answer is a Big NOOOOO!!!

Providing liquidity is just one of several allocations. 

Most projects set aside 5–20% of funds for liquidity, often paired with another pair on Dex or used on exchanges.

The rest funds long-term growth.

Crypto fundraising is strategic and multi-phased. Don’t assume every dollar raised is dumped into a liquidity pool.

The best projects think long-term focusing on development, sustainability, and real user adoption.

Liquidity is important but it’s not the whole picture.

Save this thread and share it with someone who thinks every money raised by projects is supposed to go into Liquidity.