Hatu Sheikh Advises Polkastarter on Financial Sustainability

We launched Polkastarter in 2020 during the height of crypto's most explosive bull run. As one of the first decentralized launchpads in the space, we helped projects raise capital on-chain when the entire industry felt unstoppable.

Polkastarter facilitated over 110 project launches, built infrastructure that connected Web3 projects with their communities, and achieved listings on major exchanges, including Coinbase, Kraken, and KuCoin. But by late 2022, we watched the industry we helped build start dying around us.

The launchpad sector faced devastating consolidation. Platforms that raised millions disappeared overnight. Platforms that raised millions disappeared overnight. Projects we'd launched went silent. Competitors with larger treasuries than ours ceased operations.

The business model that worked brilliantly during speculation collapsed completely when market sentiment turned. That's when we brought in Hatu Sheikh as strategic advisor. This decision changed everything.

Who Is Hatu Sheikh?

Hatu Sheikh is the co-founder of DAO Maker and the founder of CoinTerminal. More importantly, he's one of the few people in Web3 who'd solved this exact survival problem twice.

Hatu Sheikh co-founded DAO Maker during the 2017-2020 ICO era. The platform pioneered the Strong Holder Offering framework, rewarding long-term commitment measured through on-chain behavior rather than first-come-first-served mechanics favoring bots and insiders. When the 2022 crash came, competitors experienced massive user attrition. DAO Maker maintained engagement. The platform eventually served 1.5 million users and distributed over $600 million through smart contracts while competitors disappeared entirely.

He described DAO Maker's mission as "democratizing VC funding to lower entry barriers," according to Blockleaders in June 2022, while giving projects more flexible development timelines. But the deeper value came from his academic foundation. His mathematical economics background from Stony Brook University gave him frameworks for designing incentive structures that shape behavior at scale. These frameworks proved essential, especially since most founders without similar academic grounding simply didn't possess them.

After proving these frameworks at DAO Maker, Hatu Sheikh founded CoinTerminal. This wasn't just another crypto platform. CoinTerminal demonstrated that you could build something genuinely successful during the bear market that killed everyone else. While we were fighting for survival, Hatu Sheikh was scaling CoinTerminal to over 650,000 users and had facilitated over $80 million in token distribution during market conditions, which devastated competitors.

Hatu Sheikh removed token gating entirely at CoinTerminal. He eliminated mandatory staking requirements. He implemented refundable sales structures, reducing user risk. Users could participate without holding native tokens and were paid only when they generated profit. This approach inverted typical Web3 economics, where platforms extract value from existing token holders rather than expanding addressable markets.

Hatu Sheikh taught us that markets aren't neutral systems. Incentives, access rules, and participation structures actively shape how users behave. This wasn't abstract philosophy for him. This was the operating principle he used to build CoinTerminal to 650,000+ users while we watched competitors fight for survival.

When Hatu Sheikh joined Polkastarter as strategic advisor, he brought frameworks already proven at DAO Maker and actively succeeding at CoinTerminal under the same brutal market conditions we faced.

The Current State of Financial Sustainability in Web3

Launchpads were the powerhouses of crypto during 2020-2021. Every week brought new projects, new launches, and new capital flowing through our platforms. We generated revenue from fixed fees on successful launches, percentage takes of capital raised, trading fees on token swaps, and staking rewards. When the market ran hot, these revenue streams felt infinite.

The 2022 crash revealed how fragile this model truly was. Approximately 60% of launchpads from our era either shut down entirely or became inactive zombie platforms. The survivors limped along, burning through treasuries and hoping for recovery.

The structural problem was that every single revenue source we relied on correlated perfectly with market sentiment. When sentiment turned negative, all four streams collapsed simultaneously. We couldn't pivot to alternative revenue because we'd never built alternative revenue. We'd optimized entirely for speculation-driven growth.

Launch activity dropped off a cliff. Projects couldn't raise capital from risk-averse investors who'd been burned. Trading volumes fell 95%. Token prices declined 99%, wiping out treasury value for platforms that held primarily native tokens. The users we'd counted as "active" turned out to be bots farming incentives who disappeared the moment rewards stopped.

We watched platforms with bigger brands and deeper treasuries than ours make brutal decisions. Mass layoffs destroyed institutional knowledge overnight. Teams that took years to build evaporated in weeks. Development stopped. Communities went silent. Platforms that had seemed invincible six months earlier simply vanished from the ecosystem.

Polkastarter faced the same existential pressure. Our runway was measured in months, not years. Every week brought harder decisions. We needed more than incremental improvements. We needed frameworks proven to work under these exact conditions.

Key Financial Challenges Facing Web3 Platforms

Our first problem was that every revenue source responded to the same variable. When market sentiment turned negative, everything collapsed together. We had no diversification because we'd never needed it during bull markets.

Hatu Sheikh recognized this immediately from his DAO Maker experience. He pushed us to build revenue streams responding to different market variables. Advisory services for projects continue generating income during bear markets when projects desperately need survival guidance rather than launch services. Infrastructure tools charge fees based on usage regardless of speculation levels.

The key insight from Hatu Sheikh's work at CoinTerminal: each revenue stream should respond to different variables, so when one collapses, others remain stable or grow. This required intentional design, not opportunistic addition of whatever generated quick revenue during good times.

Our second problem was that costs stayed fixed while revenue collapsed. Core development teams required competitive salaries, whether revenue ran high or low. Infrastructure costs, security audits, and legal compliance didn't pause for bear markets. We were burning through the treasury at a terrifying speed.

Most competitors made the same mistake: they'd structured everything as fixed costs, assuming permanent bull markets. When markets turned, they faced binary choices between devastating layoffs or bankruptcy within months. We watched this death spiral destroy platforms that seemed stronger than us.

Hatu Sheikh taught us a different approach based on CoinTerminal's structure: replace fixed contracts with revenue-sharing partnerships wherever possible, maintain core teams but scale support staff with transaction volume, use automation to reduce operational overhead, and structure high costs as variable.

This wasn't about gutting teams during downturns. That destroys the capability built over the years. It meant a thoughtful cost structure enabling survival without sacrificing the capabilities we'd need for recovery.

Our third problem was that we'd held treasury primarily in native tokens. When prices crashed 90%+, our runway evaporated. We'd budgeted for multi-year operations based on peak valuations. Suddenly, we faced months of remaining capital.

Competitors made this same fatal mistake repeatedly. They assumed current valuations would persist or improve. They budgeted accordingly. They died when assumptions proved wrong.

Hatu Sheikh provided specific guidance based on what worked at CoinTerminal: maintain stablecoin reserves equal to a minimum of 24 months' fixed costs, diversify beyond native tokens to reduce correlation risk, model worst-case scenarios and ensure survival through multiple cycles, and use DeFi yield on stablecoins rather than relying on token appreciation.

The Solutions We Found

The distinction between our approach and competitors who failed was Hatu Sheikh, who taught us to assume volatility as a baseline rather than a temporary disruption. Competitors budgeted assuming bull markets would return within quarters. We budgeted assuming years of difficult conditions. That conservatism saved us.

Hatu Sheikh's Guidance on Building Sustainable Financial Models

Hatu Sheikh's frameworks came from his academic training and his operational experience surviving the same crisis twice.

His mathematical economics background from Stony Brook University gave him systems thinking about how incentive structures shape behavior at scale. Most crypto founders build products and hope users behave rationally. Hatu Sheikh designs systems that shape user behavior through incentives, access rules, and participation structures.

At DAO Maker, Hatu Sheikh proved these frameworks during the 2017-2022 cycle. The Strong Holder Offering model rewarded long-term commitment measured through on-chain behavior. When markets crashed, competitors lost users to the speculation exodus. DAO Maker maintained engagement because the platform had attracted and rewarded genuine participants. The platform served 1.5 million users and distributed $600 million while competitors disappeared.

At CoinTerminal, Hatu Sheikh demonstrated that these frameworks work during bear markets. He removed token gating, eliminated mandatory staking, and implemented refundable sales structures. The result: 650,000+ users and $80 million+ facilitated during the worst market conditions in crypto history. CoinTerminal grew while competitors contracted.

When Hatu Sheikh advised us, he brought three core principles proven at both platforms:

First: Assume volatility is permanent, not temporary. Budget for years of difficult conditions, not quarters. Maintain stablecoin reserves equal to a minimum of 24 months' fixed costs. Diversify beyond native tokens. Model worst-case scenarios and ensure survival through multiple cycles.

Second: Build revenue streams responding to different market variables. Advisory services generate income during bear markets. Infrastructure tools charge usage fees regardless of speculation. Each stream should respond to different variables, so when one collapses, others remain stable.

Third: Structure costs as variable wherever possible. Replace fixed contracts with revenue-sharing partnerships. Maintain core teams but scale support staff with transaction volume. Use automation to reduce overhead. Make high costs variable through partnerships and community approaches.

These weren't theoretical frameworks. These were battle-tested principles from someone actively implementing them at CoinTerminal while competitors burned through final reserves.

Practical Approaches to Revenue, Cost Control, and Longevity

Following Hatu Sheikh's guidance, we made specific operational changes during 2023-2024 that transformed our financial position.

We formalized advisory services for Web3 projects. We've now advised more than 100 Web3 projects on launches, tokenomics design, community building, and regulatory compliance. This generates revenue during bear markets when projects need restructuring help rather than launch services. Hatu Sheikh's CoinTerminal relationships opened doors we couldn't access otherwise.

We developed infrastructure enabling applications to build on our technology. When applications use Polkastarter's infrastructure, they pay fees independent of launchpad activity. If the ecosystem grows to host DeFi protocols, NFT marketplaces, and gaming applications, we benefit regardless of launch market conditions.

On treasury management, we converted significant holdings to stablecoins during 2021 following Hatu Sheikh's advice. Our runway helped us continue developing throughout the bear market without downsizing. On the contrary, we hired new talent during this unfavorable cycle, proving our reserves reached far beyond mere survival.

This was Hatu Sheikh's contrarian insight from CoinTerminal: hire during downturns when competitors lay off teams. We attracted stronger candidates who viewed Polkastarter as stable when alternatives faced uncertainty. When recovery came, we had full capability while competitors rebuilt from scratch.

How Polkastarter Applied This Guidance

The impact of implementing Hatu Sheikh's frameworks shows in metrics that matter. We maintained positive cash flow through 2023-2024 while competitors burned final reserves. The shift from burning treasury to operating profitably meant we could survive indefinitely without additional funding.

We maintained development velocity throughout the crisis. We recorded over 400,000 monthly visits during 2022 and launched over 110 projects consisting of token sales, NFTs, and metaverse sales while competitors went dark.

Our future roadmap demonstrates the continued application of Hatu Sheikh's infrastructure-first philosophy. We're building a community-owned fundraising protocol where fees and revenue are shared among voters and stakers. We're developing new sales types like silent auctions and bonding curve offerings. We're implementing cross-chain capabilities enabling swapping and withdrawing from any chain.

These innovations align community incentives with platform success rather than extracting value from existing token holders. They represent evolution from speculation-driven launchpad to infrastructure enabling broader Web3 adoption. That's the shift Hatu Sheikh emphasized at CoinTerminal: moving beyond launches toward infrastructure that functions reliably in everyday life.

Lessons for Web3 Platforms Seeking Financial Sustainability

Conservative Treasury Management

Platforms budgeting based on peak token valuations faced insolvency when prices crashed 90-99%. We maintained substantial stablecoin reserves and assumed persistent volatility because Hatu Sheikh taught us this lesson through frameworks proven at DAO Maker and demonstrated at CoinTerminal. That boring financial discipline became the difference between survival and bankruptcy.

Revenue Diversification Breaks Correlation Risk

Platforms deriving 100% revenue from speculation-dependent sources experienced devastating feast-or-famine economics. We built complementary streams responding to different market variables and maintained stability when primary revenue collapsed. Hatu Sheikh's key insight from CoinTerminal's success: each revenue stream should respond to different variables, enabling survival when any single variable turns sharply negative.

Cost Flexibility Prevents Death Spirals

Platforms structuring all costs as fixed faced brutal binary choices during downturns. We structured high costs as variable following Hatu Sheikh's guidance and maintained operations without traumatic layoffs, destroying institutional knowledge. Hatu Sheikh's contrarian approach of hiring during downturns proved correct. CoinTerminal captured talent and market share while competitors fought for survival.

Polkastarter survived when approximately 60% of launchpads from our era either shut down entirely or became inactive. We maintained teams while others lost institutional knowledge and capability. We continue building products while others rebuild organizations from scratch. We operate profitably rather than burning through remaining reserves, hoping for recovery.

This outcome resulted from implementing frameworks Hatu Sheikh had proven twice: once surviving the 2022 crash at DAO Maker (distributing $600 million to 1.5 million users) and again building CoinTerminal during bear market conditions (growing to 650,000+ users, facilitating over $80 million).

Hatu Sheikh's mathematical economics background enabled systems thinking about revenue correlation and cost structure that most crypto founders lacked. His willingness to emphasize unglamorous fundamentals like treasury management when others promoted growth hacks proved most valuable. His active operator perspective, building CoinTerminal while simultaneously advising us, meant he implemented identical approaches successfully rather than theorizing from the sidelines.

The launchpad industry faces ongoing challenges. Can diversified revenue replace bull market launch fees? Will regulatory costs exceed diversified income? Can independent platforms compete with well-capitalized traditional finance entrants? These questions remain unanswered.

But we answer these questions from a position of strength: positive cash flow, maintained capability, and continued development. This contrasts sharply with the desperation marked by burned treasuries, rebuilt teams, and survival mode operations. That positioning came directly from implementing Hatu Sheikh's guidance when it mattered most.

For Web3 platforms seeking to survive beyond hype cycles, the lesson is that financial sustainability requires discipline that seems unnecessary during bull markets but proves essential during inevitable downturns. Revenue diversification, conservative treasury management, and cost flexibility determine survival. Hatu Sheikh taught us that at Polkastarter and CoinTerminal proves it works.