A few days after the collapse of confidence surrounding the Trove Markets ICO, another high-profile token sale has placed crypto fundraising practices under scrutiny. Space, a Solana-based leveraged prediction market, raised more than $20 million in its public token sale despite repeatedly referencing a $2.5 million target. The team has since clarified that the figure represented a soft cap rather than a hard limit and stated it will retain approximately $13 million at a fully diluted valuation of $69 million.
The outcome has sparked debate across the crypto community and revived comparisons to the Trove episode.
What Happened During Space’s ICO?
Space positions itself as a leveraged prediction market that allows users to trade outcomes across categories such as crypto, politics, sports, and technology. The project ran its $SPACE public sale from mid December 2025 through January 16, 2026. The team initially set a target of $2.5 million at a $50 million floor valuation, with a price-discovery mechanism that allowed the valuation to scale up after the target was met.
By December 19, Space’s raise crossed the $2.5 million milestone and entered its price discovery phase. Demand continued to accelerate through the holiday period. On December 26, the team announced revised terms that lowered the final clearing price to $0.069 per token, setting the fully diluted valuation at $69 million, down from the previously stated $99 million ceiling. Space also extended the sale window, citing travel and holiday scheduling conflicts among participants.
Upon the sale's conclusion, Space reported raising more than $20 million.
The team stated that it would refund only $7.3 million “after final runway review”. According to Space, 19.6% out of the 51% community pool was allocated at $0.069 per token.
Throughout this period, the project attracted strong attention. On November 14, an earlier raise on Echo closed with more than 1,300% oversubscription.
In December, the team announced a $3 million seed and strategic round led by Morningstar Ventures and Arctic Digital.
Binance Research later featured Space in its December 2025 ecosystem report, which many participants viewed as an additional signal of legitimacy.
“Soft Cap” Explanation and Criticism
After the sale, Space explained that the $2.5 million figure functioned as a soft cap rather than a maximum raise. Team stated that “accepting only $2.5M would have funded a few months of operations, not the multi-year runway required to build leveraged prediction market infrastructure at scale.”
Critics pushed back on that explanation. Community members noted that earlier communications referred to a $2.5 million target without explicitly labeling it as a soft cap, arguing that the distinction emerged only after the sale exceeded expectations.
Others questioned why the project chose to retain more than five times the originally promoted amount rather than issuing broader proportional refunds.
Community Response and Comparisons to the Trove ICO
The controversy has drawn frequent comparisons to Trove Markets, which raised more than $11 million while promoting a Hyperliquid-focused roadmap before abruptly pivoting to Solana and retaining most of the proceeds after initially targeting only a $2.5 million raise. In both cases, investors accused teams of relying on flexible language, extended sale timelines, and justifications to keep significantly more capital than was initially stated.
Commentary across social platforms described Space as following a familiar playbook.
Critics pointed to the use of hype around emerging sectors, leveraged trading narratives, and open-ended sale mechanics.
Positive reaction to the announcements has been met with skepticism, as the community believes the praise is financially incentivized
Others accused the project of misleading communication and selective engagement, claiming the team responded to insiders while ignoring refund questions from smaller contributors.
What’s Next for Space?
In light of the situation, Morningstar Ventures, the VC fund that led Space’s $3 million seed and strategic round, has put out a post stating that they learnt about the “discussions surrounding the Space ICO through Twitter and other public channels” and that they are “trying to have a discussion with the Space team to better understand the developments and implications of the situation.”
The firm has stated that they would issue a public statement when it has more information to share.
In the meantime, Space has scheduled a community update session today, January 22, on X by 7 pm UTC to address concerns and outline next steps. The discussion will likely determine whether the project can rebuild trust or join Trove as another case study in the growing debate over how crypto projects should conduct public fundraising.
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