Cryptocurrency launchpads have become an integral part of the blockchain ecosystem, providing a platform for promising crypto projects to raise funds and gain exposure. But what exactly are crypto launchpads, and how do they benefit both projects and investors?
Table Of Contents
Launchpads – An Overview
In simple terms, a cryptocurrency launchpad is a platform that helps launch new crypto projects through token sales events like ICOs, IEOs, IDOs, etc. Launchpads screen potential projects, perform due diligence, and ultimately host token sales if the projects meet their standards.
For crypto projects, launchpads offer an organized and credible means to raise funds from a large investor pool. Launchpads also provide marketing support to projects through their community networks.
For investors, launchpads serve as a portal to early-stage crypto investment opportunities that have been vetted and approved by the launchpad owners. Investing through launchpads is considered less risky than investing in unknown crypto projects individually.
The Rise of Crypto Launchpads
Launchpads rose to prominence during the ICO boom of 2017-18. As interest in ICOs grew, dedicated platforms emerged to host token sales, including Ethereum’s Launchpad in 2017.
Since then, the number of crypto launchpads has proliferated across blockchains like Ethereum, Binance Smart Chain, Solana, Cardano, and more. Today launchpads host not just ICOs but also newer token sale models like IEOs, IDOs, TGEs, etc.
The credibility and strong community networks of leading launchpads have made them the go-to platforms for promising crypto projects to gain funding and exposure. For investors, they provide access to potentially profitable early-stage investments.
Key Benefits of Crypto Launchpads
For both crypto projects and investors, cryptocurrency launchpads offer some major benefits:
Benefits for Crypto Projects
- Access to large investor pool – Launchpads provide instant access to legions of cryptocurrency investors looking for the next big project to back.
- Organized token sales – Launchpads handle all the token sale logistics like determining caps, block timing, etc. allowing projects to focus on development.
- Due diligence – Projects undergo rigorous evaluation by launchpad owners to determine their legitimacy and potential. Passing these checks builds credibility.
- Marketing support – Launchpads have vast community networks they leverage to spread awareness about sales and build hype around listed projects.
- Early funding – Projects can raise substantial capital in the early stages through launchpad token sales to fund development.
- Expert advice – Seasoned launchpad owners often mentor and guide projects on aspects like token economics, launch strategy, etc.
Benefits for Investors
- Early-stage access – Investors get early access to purchase tokens of promising projects before they list on exchanges. Early investors can potentially gain huge returns.
- Vetted projects – Launchpads only list quality projects that have passed their screening process, saving investors from conducting extensive research.
- Organization – Launchpads handle all aspects of sales like allocating slots, setting sale dates, determining caps, etc. making the process smooth for investors.
- Level playing field – Launchpad sales are structured to offer all investors an equal chance to participate, unlike private sales.
- Safe investments – Launchpad owners have a vested interest in listing only legitimate projects that will give returns to investors, aligning incentives.
- Expertise – The experience of launchpad owners in evaluating projects provides investors with confidence in the credibility of token sales hosted on platforms.
What To Look For In A Crypto Launchpad?
With the rising number of new launchpad platforms across blockchains, how can projects and investors identify truly valuable launchpads? Here are the key factors to evaluate:
- Track record – The number and success rate of past projects hosted on the launchpad. The most reputable launchpads have a high proportion of winning projects.
- Network/Community – Size of the launchpad’s community of followers, investors, and partners. A large and engaged community ensures strong participation and promotion of sales.
- Screening process – Rigor of the due diligence process and standards required for projects to get listed. Stricter evaluation indicates higher quality of hosted projects.
- Founder/Team experience – Relevant background and success of the launchpad founders in crypto investing and project analysis. Experience increases the likelihood of identifying winning projects.
- Investment structure – Evaluating tokenomics, vesting schedules, allocation limits, etc. to ensure a fair structure for investors.
- Support services – Range of marketing and advisory support services offered to incubate and accelerate listed projects. More extensive support improves project outcomes.
- Blockchain networks – Diversity of blockchain ecosystems the launchpad operates in. Being chain agnostic provides investors with more options.
- Security/Safety – Security protocols and investor protections in place to prevent issues like oversubscription, gas wars, etc. during volatile token sales.
- Terms and fees – Costs charged to projects for listing and platform fees deducted from successful raises. Reasonable fees demonstrate good intentions.
By carefully assessing these parameters, projects and investors can identify industry-leading launchpads to partner with for their fundraising or investment goals.
How Crypto Launchpads Work
Now that we’ve examined the benefits of crypto launchpads, how exactly do they work? Here is an overview of the launchpad process flow:
For Projects
- Application and evaluation – Projects submit applications to launchpads which are then evaluated based on predefined criteria like project stage, team, tokenomics, use case innovation etc.
- Due diligence – Shortlisted projects undergo rigorous due diligence including KYC verification, smart contract/technical audits, legal vetting etc.
- Final selection – Projects that pass due diligence are included in the launchpad’s upcoming sales pipeline based on strategic considerations.
- Incubation support – Leading up to the sale, launchpads work closely with projects, advising them on launch strategy, community growth, fundraising caps and other aspects.
- Token sale – The launchpad handles all aspects of conducting the token generation event, from setting block timing, gas fees, and allocation limits to ensuring investor security.
- Listing support – After the token sale, launchpads provide continued support to projects for exchange listings, facilitating introductions and driving community enthusiasm.
For Investors
- Registration – Investors register on launchpad platforms, completing KYC verification before accessing investment opportunities.
- Allocation – Based on factors like registration date, tier status, etc. investors are assigned token allocation slots for each sale.
- Participation – Once sale goes live, investors can buy-in as per allotted caps by contributing funds and receiving tokens in return.
- Vesting – Most sales come with token vesting, restricting investors from immediately trading tokens received at the sale.
- Returns – If projects succeed over time, investors can earn handsome returns by selling vested tokens or holding them for greater upside.
- Refunds – In cases of unsuccessful projects, launchpads institute investor protection mechanisms like guaranteed refunds.
By functioning as effective bridges between crypto projects and investors, launchpads aim to facilitate mutually beneficial outcomes for both stakeholders.
Key Launchpad Platforms To Watch
While new launchpads continue to emerge across blockchains, some of the most prominent and reputable platforms investors should watch include:
- Binance Launchpad – The major crypto exchange’s lending and staking arm. Hosts high-demand token sales of BSC-based projects like Mobox, Refinable, etc.
- Polkastarter – One of the top decentralized IDO launchpads. Polkastarter offers access to Polkadot ecosystem projects like Mangata Finance, Litentry, etc.
- CoinList – A compliance-focused US launchpad. CoinList sales are limited to accredited investors and have listed big names like Filecoin and Solana.
- TrustPad – A new player focused on multichain IDOs. TrustPad aims to bring regulatory compliance and investor protections to its listed projects across BSC, Ethereum, Polkadot, etc.
- DuckDAO – A community-governed launchpad platform. DuckDAO offers investors yield opportunities from staking and farming tokens of projects who conduct IDOs on the platform.
- BSCStation – A Binance Smart Chain focused platform that conducts community voting to determine project listings. Backed projects like Keanu Inu, Alium Swap, etc.
As the cryptoindustry matures, launchpad platforms are likely to continue playing a pivotal role in pairing promising projects with investment capital through productive token sales. With proper research and evaluation, both projects and investors can harness launchpads as springboards to accelerate their blockchain ambitions.
Conclusion
Crypto launchpads have evolved from being just hosts for ICOs to becoming multifaceted incubators driving the growth of promising blockchain projects. For investors, they represent access points to potentially gain exposure to innovative cryptoassets before the rest of the market.
With the proliferation of new projects across multiple chains like Ethereum, BSC, Polkadot, etc., launchpads are likely to grow more targeted – focused on specific verticals or chains. Simultaneously, expectations around compliance, investor protections, and security will rise.
Platforms that can balance access to deals on new project in a secure and fair environment will thrive. The future seems bright for launchpads continuing to propel crypto innovation by bringing together investors hungry for the next big thing and ambitious projects on the cutting edge. Their role as gatekeepers and kingmakers in the industry’s ever-changing landscape is likely to only grow.
