This Changes ICMs Forever
Mar 13, 2026
5 min Read
TL;DR
“Internet Capital Markets” (ICMs) are often misunderstood as “anyone can launch a token instantly.” That was the first wave. The next wave is bigger: shipping real software fast, then packaging it as an asset, with ownership, access, incentives, and distribution built in.
In token-first markets, launch speed wins. In product-first markets, execution quality wins. The bottleneck moves from issuing tokens to running systems: orchestration, reliability, verification, and safe automation. This is the era Cluster is built for.
Why “ICM” needs a clearer definition
People use “ICM” to describe two different realities.
Token-first ICMs (Phase 1)
Phase 1 is about frictionless token issuance. Anyone can create a token quickly, and the market can price it immediately. This wave proved a structural point: capital formation can happen at internet speed.
But it also created noise.
A large percentage of tokens don’t represent durable products, so attention becomes chaotic, copycats multiply, and incentives attract adversarial behavior fast.
Product-first ICMs (Phase 2)
Phase 2 keeps the speed, but changes what the market forms around.
Product-first ICMs are about working software as the payload, with a token as the wrapper.
That wrapper can encode:
- Ownership
- Access
- Incentives
- Distribution
- Governance (sometimes)
The difference is simple: in token-first ICMs, the token is the thing. In product-first ICMs, the token packages something real.
Why token-first came first (and why it hits a ceiling)
Token-first ICMs exploded because they’re the easiest possible loop:
- create a token
- attract attention
- let trading do the distribution
It’s fast, measurable, and requires almost no operational maturity.
But it hits a ceiling because markets don’t just want things to trade.
They want things that:
- keep attracting users for non-price reasons
- keep generating activity
- keep evolving
- keep surviving stress
A token without a real product usually can’t do that for long.
Wave 1 proved the rails exist.
Wave 2 is about making the “thing being traded” worth holding.
What changed: building software just got radically cheaper
The real unlock behind product-first ICMs is that software creation is becoming “internet-speed.” Natural language interfaces and AI-assisted development have lowered the cost of getting from intent to a working app.
So the loop evolves into:
- prompt → working app (fast)
- users interact (fast)
- the product gets packaged as an asset (ownership/incentives/distribution)
- the market coordinates around it (fast)
This is how ICMs move beyond token factories and become a creation-to-market pipeline for real software.
##The definition: Product-first ICMs##
Here’s the simplest definition:
Product-first ICMs are markets where working software is the payload and the token is the wrapper.
In practical terms:
- the dApp / agent / protocol is what creates utility.
- the token is how you distribute and coordinate ownership and incentives around that utility.
This matters because it changes what “winning” looks like.
The real implication: markets turn your users into operators
In Web2, you could ship something imperfect, grow slowly, and fix bugs quietly.
In product-first ICMs, the market shows up early:
- automation
- edge cases
- adversarial usage
- incentive exploits
- copycats and forks
- behaviors you didn’t explicitly design for
Because incentives do that. Always. So your product isn’t judged like software anymore. It’s judged like an economic system.
That’s why the winners won’t be the teams that can “launch.” They’ll be the teams that can run.
The new bottleneck is execution quality, not issuance
Once software becomes shippable at internet speed, the bottleneck moves to operational reality:
- reliability under load
- permissioning and boundaries
- orchestration across tools/models/workflows
- verification and auditability (“receipts”)
- monitoring, rollback paths, and recovery
- privacy boundaries for sensitive inputs (when needed)
This is where many fast-built systems break: they’re impressive in a demo, but fragile under real usage.
In a market environment, fragility is not a minor issue.
Fragility becomes an event.
And events get priced.
Orchestration becomes the moat
When people say “AI agent,” they often picture a single model behaving intelligently.
In production, serious AI apps become workflows:
- tool calls
- multi-step execution
- state and memory management
- retries and fallbacks
- permissions and budgets
- monitoring and cost controls
- guardrails and policy constraints
That coordination layer is orchestration.
Orchestration is what turns:
- intelligence → outcomes
- prompts → reliable systems
- prototypes → production behavior
In product-first ICMs, orchestration isn’t a nice-to-have. It’s the difference between a system that survives incentives and a system that becomes a public incident.
The Product-First ICM stack
A simple framework to remember:
- Intent (what someone wants to build)
- Execution (agents/tools/workflows run)
- Verification (trust, auditability, correctness)
- Distribution (asset packaging + markets)
Token-first ICMs mostly lived in step 4. Product-first ICMs require all four.
That’s the shift.
Where Cluster fits in this phase
Product-first ICMs will be won by execution layers, not launch mechanics.
Cluster is built as an AI infrastructure layer designed for this world:
- orchestration to coordinate multi-step workflows into predictable outcomes.
- scalable execution through a modular infrastructure approach.
- data-first design principles so builders can incorporate and benefit from relevant datasets.
- a production environment mindset: guardrails, observability, and reliability matter as much as speed.
On top of that, interfaces like prompt-to-protocol platforms make creation accessible. But creation at scale only works when the infrastructure underneath is designed for market pressure.
The future isn’t just “anyone can launch.”
It’s “anyone can ship” and what they ship can survive.
What builders should do now (practical playbook)
If you’re building toward product-first ICMs, the playbook changes:
- Treat “listing day” as day zero, not day ninety
Incentives arrive early. Design for pressure.
- Design for operators, not just users
Users click. Operators automate. Products must handle automation safely.
- Build the execution graph early
Don’t bolt orchestration on later. It becomes painful and expensive.
- Make failure recoverable
Retries, fallbacks, limits, rollback paths, monitoring. Boring wins.
- Tokenize only when the payload can carry it
A token is a powerful wrapper when the product underneath is real.
Closing: the era after token-first is product-first
Token-first ICMs proved issuance can be instant.
Product-first ICMs make the next leap: software becomes an asset, and markets form around working systems, not just symbols.
That world will reward:
- builders who ship real products fast
- and infrastructure that makes speed safe
Product-first ICMs are the new era.
Cluster is building for what that era demands.