What is a Launchpad: Crypto Project Fundraising
Key Questions Answered
- A crypto launchpad is a fundraising platform that provides investors with the opportunity to invest in early crypto projects before they are listed publicly.
- This enables them to buy tokens cheaper, so that they can maximize their return on investment when price appreciates later on and they sell them.
- As for the crypto projects, raising funds through a launchpad enables them to reach a broader base of investors. This prevents a large number of their tokens being bought up by whales and subjected to pump and dump schemes, which will cause their token prices to plunge.
Since Bitcoin’s emergence in 2009, the crypto world has witnessed several successive revolutions at a rapid pace with the launch of smart contracts, decentralized finance (DeFi), decentralized applications (DApp), and other features.
In turn, many early stage cryptocurrency projects have turned to the latest fundraising platforms in order to secure funds. A crypto launchpad, also known as an Initial DEX Offering (IDO) has emerged as the successor of earlier platforms such as Initial Coin Offerings (ICO) and Initial Exchange Offerings (IEO).
In this article, you’ll learn about what’s a crypto launchpad, how a crypto launchpad works, and the best crypto launchpads in the market right now.
What is a Launchpad in Crypto?
A crypto launchpad is a decentralized exchange-based (DEX) platform for launching new coins, tokens, and blockchain or crypto projects. It differs from other fundraising platforms in that it provides investors with the opportunity to invest in early crypto projects before they are listed publicly.
This is a strong value proposition for investors as it enables them to buy tokens cheaper, so that they can maximize their return on investment when price appreciates later on and they sell them.
3 Launchpad Advantages
Launchpads offer several advantages–for both the projects and investors. These advantages include:
- Beginner-friendly: IDOs are completely permissionless and require little to no fee for token listings on DEXs. Any team can put their project on a crypto launchpad as long as they pass the entry requirements.
- Safer: Launchpads are not vulnerable to security breaches as they do not hold user funds. Instead, investors are in full custody of their assets. Launchpads can access the tokens through secure wallets only after wallet linking.
- Receive tokens almost instantaneously: The tokens of interest are almost immediately available for trading and do not require a waiting period.
How Do Crypto Launchpads Work?
A token sale on a launchpad uses a blockchain-based approach for regular investors to invest in early stage crypto projects, by ensuring a fairer distribution of tokens across the board. This is because blockchain enables greater transparency through closer tracking of token allocation. This kind of opportunity was only previously available to venture capitalists (VCs) and other institutional investors.
With crypto launchpads, even regular retail investors have an opportunity to invest in a promising project at a low price, before it launches publicly and prices shoot up. This fairer distribution of tokens also protects crypto projects from sudden price depreciation due to pump and dump schemes that whales are normally guilty of.
What Are the Best Crypto Launchpads?
Launchpads organized by centralized exchanges such as Phemex have emerged as a popular choice, as they combine the best of both worlds–DeFi capabilities as well as user security and convenience. This is because centralized exchanges conduct thorough due diligence to safeguard against scams and rug pulls. In addition, centralized exchanges offer a one-stop platform for users to buy, stake and trade tokens, as long as they have an account with that exchange.
Crypto launchpad list
In addition to launchpads supported by exchanges, here are a few other decentralized crypto launchpads offering similar services:
- Polkastarter: Polkastarter is a decentralized exchange based on the Polkadot (DOT) blockchain for token pools and auctions. It’s a crypto launchpad designed with many familiar auction systems such as sealed-bid auctions, dutch auctions, and also dynamic and fixed ratio swaps. Like other top launchpads, it also features a password-protected private pool, whitelisting, smart contract token swaps, and price notifications.
- TrustSwap: TrustSwap is another decentralized launchpad and protocol, founded in Canada in mid-2020. It strives to popularize smart contracts and empower “customizable transactions” in DeFi as well across the entire crypto space. The platform’s native token, SWAP, offers next-generation multi-chain swaps and other functionalities pertaining to splitting payments and subscriptions. Its Smart Swaps feature enables users to turn any token into an ERC-20 token in order to access more DeFi DApps.
- WeStarter: WeStarter is a cross-chain token initial swap protocol based on the HECO Network, established in early 2021. One of its highlights is that it supports the initial exchange of projects based on BSC, Ethereum, and HECO. By supporting multiple blockchains, it can fulfill the needs of Initial Wallet Offering (IWO) for most crypto projects. IWO is a crowdfunding technique where crypto wallet users directly participate in the new project’s crypto presale and possibly enjoy the benefits of high transaction speeds and zero gas fees. To date, WeStarter has launched a total of 16 projects, with over $1 billion IWO volume in total. In the future, the platform plans to add Polkadot (DOT), Avalanche (AVAX), and other public chains into its ecosystem.
- BullPerks: BullPerks is a decentralized VC and multi-chain crypto launchpad that highlights transparency and follows a community-dedicated approach. The platform applies a transparent 6-tier system to render its users a fair share of allocations. Users can join BullPerks’s crypto pre-sales by locking or staking the platform’s official BLP tokens.
The number of BLP tokens locked corresponds to the user’s tier in the platform. The launchpad reviews the level and number of tokens every two months according to the price performance of the crypto project. This process lowers the barriers for users to move between tiers while allowing new users to join the platform. Users can use the BLP tokens to upgrade their tier via locking, staking, or farming to earn rewards.
- The Qube Launchpad: The Qube Launchpad is a crowdfunding platform designed for DApps. It aims to tackle the shortage of quality crypto launchpads in the crypto sphere, which has hindered early investors from getting into the whitelists. A whitelist is a list of identified investors that are allowed to participate in a crypto presale. The Qube Launchpad offers simplified entry and fair selections to solve this drawback. It also plans to deploy on multiple chains, including Polygon (MATIC), Avalanche, and so on.
Crypto launchpads have become one of the main crowdfunding models in the crypto world, benefitting both new projects and investors. On the one hand, launchpads offer new projects the funds and exposure they need. At the same time, they help investors access a group of promising crypto projects and early-stage token sales. In addition, the vetting process associated with top launchpads helps safeguard investors from potential crypto frauds and scams.