Launchpads have been a key driving force in the evolution, growth, and funding of crypto projects. Early adopters of successful projects always benefit the most. However, given the flood of new cryptocurrencies, it can get difficult to know where to invest next. This is where the crypto launchpad enters the picture. A launchpad is the best place to find an authentic and verified project in its early stage. Not only do they offer security to founders and investors, but the cost of launching a project in a launchpad is significantly low, which is one of the major reasons why increasingly more projects are shirting toward launchpads for fundraising.
This article will brief you on what launchpads are and how they work.
- What is a crypto launchpad?
- Why do investors prefer cryptocurrency launchpads?
- How does a crypto launchpad work?
- Types of fundraising through launchpads
- How do launchpads benefit the crypto ecosystem?
- How to create a crypto launchpad?
- Why should investors invest through Launchpads?
- List of top 10 cryptocurrency launchpads
- How to choose the best cryptocurrency launchpad?
What is a crypto launchpad?
A crypto launchpad is a platform for launching new coins, tokens, and blockchain and/or cryptocurrency projects. Also known as crypto incubators, these platforms allow new blockchain-based projects to raise capital while offering early-stage token sale access to investors. Early-stage access allows investors to get a good deal on the respective cryptocurrency before it opens up to the general public.
Launchpads benefit both creators and investors. The launchpad lists a project’s details, i.e., the description, roadmap, token utilities, whitepaper, etc., allowing investors to find projects of interest and assist their growth. The founders/creators of crypto projects can use the launchpad to access a community of crypto enthusiasts and investors ready and willing to explore and test new projects.
Cryptocurrency launchpads are the safest route for new and experienced investors to get a share of crypto projects. As an early adopter, an investor can monetarily support a project during its pre-sale phase and benefit from a price increase as the project grows.
Why do investors prefer a cryptocurrency launchpad?
Beginner-friendly: Launchpads are completely permissionless and require little to no fee for listing tokens on DEXs. As long as a team passes the entry requirements, they can easily put up their crypto project on a launchpad.
Safer: Launchpads do not hold user funds and are, therefore, not vulnerable to security breaches. Launchpads get access to tokens through secure wallets only after they’ve been linked. Moreover, launchpads only list projects that have been thoroughly vetted, providing a safer ecosystem for investors’ money.
Immediate token access: The project tokens do not have a waiting period and are almost instantly available for trading.
How does a crypto launchpad work?
Launchpads have two main goals:
- To raise funding for projects
- To provide authentic projects to their communities before they’re launched publicly.
Launchpads focus on building their community and bringing genuine projects for investors to invest in to achieve these goals. Most launchpad platforms have native tokens that community members need to own. Users have to verify their identity before participating in any fundraising. This ensures that no one cheats the system by purchasing through multiple IDs.
To understand how launchpads work, let’s revise the basics of how new crypto projects traditionally raised money for their product or service:
- A new project or service is ideated.
- The project’s creators create a token that will form an integral part of their platform.
- They sell these tokens to early investors to raise money.
- The token is released in the public market.
- The token’s price increases as the project mature, and investors and early adopters make money.
Before 2018, most DeFi projects conducted fundraising and token sales on their website, distributing tokens to investors. However, a majority of the ICOs turned out to be scams. The crypto market crashed, and investors were no longer confident about projects they could invest in. Crypto exchanges saw and grabbed the revenue opportunity, taking on the task of researching many new projects and partnering with vetted projects to carry out their sale on their exchange platforms.
Since exchanges already had a community of users and potential investors, this method worked great for everyone involved. This process of conducting token sales of centralized exchanges (CEXs) was called initial exchange offering. Recently, decentralized exchanges have emerged and offered similar fundraising services to crypto projects.
Types of fundraising through launchpads
There are eight main types of launchpads:
ICO:
An Initial Coin Offering is a crypto fundraising method where investors invest their share in terms of fiat currency, cryptocurrency, or the platform’s native tokens. They receive an equivalent amount of crypto or utility tokens in return. These tokens serve several functions–from giving the holder access to particular services or features to entitling them to company dividends. Some major successful ICOs achieving this over the years include Ethereum, Cardano, Tezos, and NEO.
IEO:
An Initial Exchange Offering, IEO, is the cryptocurrency exchange equivalent to IPO. Here in, exchanges act as middlemen between investors and start-ups to help projects raise funds. The exchanges profit from fees generated by the different services they render during the diligence and fundraising processes. Binance Launchpad, Huobi Prime, ProBit, OKX Jumpstart, and Bitmax Launchpad are some popular crypto exchanges that host IEOs.
IDO:
Initial Dex Offering raises funds through a decentralized crowd sale. An IDO launchpad allows businesses to list their crypto projects on the platform and verifies them before they are visible to the investors. Investors invest in these projects by buying the respective project(s) IDO tokens. One reason for the success of IDOs is the ability of decentralized exchanges to provide immediate token liquidity. Raven Protocol, Universal Market Access Protocol, and SushiSwap are three successful projects launched from IDOs. Popular DEXs that offer IDO services include Binance DEX, Uniswap, and Polkastarter.
IFO:
Initial Farm Offering is a decentralized fundraising method where investors can participate in pre-sale events and invest their shares. IFO maximizes the advantages of trading on DEXs, particularly for crypto newbies. Additionally, IFO platforms are stimulated by P2P transactions that allow users to save money in the long run. PancakeSwap and BasketDAO are the two most popular IFO platforms.
ILO:
Another decentralized fundraising model, an Initial Liquidity Offering launchpad, is where buyers/investors sell their tokens. These platforms have a built-in AMM (automated market maker), which swiftly matches the order requests. The investors who contribute to the liquidity pool of the platform receive bonus tokens in return. In the ILO approach, a new token is first issued to the buyers who agree to contribute to the liquidity pool on a DEX. Investors invest their money in exchange for bigger profits and/or bonuses and act as third-party lenders for projects needing finance.
IIO:
In the Initial Insurance Offering model, tokens are distributed via European options trading. Users employ this token sale method to circulate new tokens to market investors. The primary purpose of IIO is to attract digital market investors to allow businesses to raise adequate funds for their projects. The IIO model eliminates the middleman in the trading system and helps users avoid market price fluctuations.
INO:
Initial NFT Offering is a fundraising method exclusively for upcoming NFTs. It involves offering a set of first-generation NFTs, such as artwork collectibles, audio files, music files, etc., on a crowdfunding platform for a certain period of time. Native tokens back these NFTs. Token holders can burn the NFTs and unlock cryptocurrency from them. PolkaBridge launched an INO platform in November 2021 to revolutionize the crowdfunding of NFT projects.
IGO:
Through Initial Game Offering launchpads, investors can invest in crypto gaming projects instead of benefits such as special in-game features and/or discounts. An IGO allows interested investors/users to invest in an upcoming gaming project during its early days. The buyers’ investment is incentivized by offering rare in-game collectibles, limited-edition skins, accessories, mystery boxes, special weapons, etc. Binance NFT, Game starter, Enjinstarter, Speedify, and GameFi are the five most popular IGO launchpads.
How do launchpads benefit the crypto ecosystem?
Launchpads offer some inherent advantages to investors and founders while positively impacting the crypto ecosystem.
- Crowd Fundraising: Fundraising is one of the most basic ways for a project to move into the next stage of development. Launchpads play a crucial role in raising substantial funding for projects to develop and expand. They can also serve as the perfect platform for the soft launch of a crypto project.
- Early-Stage Investment: Launchpads allow investors to get in on a crypto project early at the lowest possible price and benefit from maximum returns.
- Project Security & Token Appreciation: Launchpads protect investors against scams since they thoroughly verify each project before listing. Additionally, launchpads allow investors to explore the possible value appreciation of a token. Investors will invest in a project they believe can grow exponentially over the years.
- Community Building: Launchpads build a strong community of crypto enthusiasts, creating a fertile ground for loyalty to new crypto projects. With steady growth, crypto projects garner more investors helping the founders raise funds. Project developers can also use the launchpad to interact directly with the investors and involve them in the project’s development.
How to create a crypto launchpad?
Now, let’s look at the development process of the crypto launchpad.
Ideation and Planning
A launchpad is crucial in both the funding and reputation of crypto projects. As an incubator for projects ranging in all sizes, it is important that you ideate how exactly the launchpad will function and the criteria for projects to be accepted.
For instance, BSCPad is one of the most popular launchpads for blockchain projects. Given that, the platform does not have strict barriers for a project to secure a spot in their listing. It is on a first-come, first-served basis, making the process fair for everyone. Several tier options exist for projects, such as a lottery tier or a guaranteed position tier. Similarly, you can have an allocation protocol for projects on your launchpad.
The respective decision for the same will take place during the planning stage. This is the most important aspect of your launchpad, depending on which the rest of the features will follow. Thus, prioritize this as the first step in the ideation phase. Since crypto launchpads are still evolving, it is better to consult with a launchpad development company that can give you expert opinions and suggestions.
Native tokens
A launchpad has two options; either have a native token or use an existing token. This is especially helpful for investors searching for a top-tier project to invest in. This is how it works: the more native tokens an investor owns, the more their chances are to participate in a selected set of top crypto presales. But it need not be the case for all launchpads. For example, UpLift DAO is powered by its $LIFT token, and one is required only to stake a minimum of 100 tokens to access great token sales. For certain launchpads that accept other tokens, it is not necessary for all investors to stake native tokens to secure a token allocation. Additionally, you can integrate payment gateways and crypto wallets so that users can conveniently purchase tokens from the platform and easily connect to their wallets for storage.
Project verification and security
As mentioned before, a project goes through several screenings (criteria for which will be decided by the launchpad itself) before it will be listed in the launchpad. You have to include certain security checks so that both the project owners and the project’s quality are assured and validated to be presented to the investors. In fact, before the crypto launchpads came into existence, many scams happened in such a way that the project owners disappeared after they falsely convinced the investors to buy their tokens in the initial sale.
Launchpads filter out their listings so that only legitimate projects are accepted. They must be transparent and provide details about the creators and developers. Owners of the crypto project can also submit a detailed whitepaper that describes the entire project, the fundraising plan, further roadmap, and more, which will be an essential resource for investors to consider investing long-term. Not only the projects but the investors must also be verified of their identity to become platform members. You can start with KYC/AML processes for the same. You can get a better idea of security measures by talking to experts.
UX/UI
Eventually, a crypto launchpad must be made for the convenience of its primary consumers, i.e., the investors. The UX should be such that it is understandable by investors ranging from novices, new to the crypto world to advanced investors who are experts at what they do. For instance, Binance Launchpad is a relevant example of a convenient UX UI. One of the recent projects they listed is STEPN NFT Token, a Move-to-earn concept. They add details like Tokens offered, number of participants, sales price, end time, etc. You can make clone pages of other launchpads by consulting top blockchain development companies.
If you choose a white-label launchpad development solution, you will be presented with an optimum user interface in which you just have to add certain customizations. Rather, if you are building a launchpad from scratch, then detailed user research and a thorough study of existing successful launchpads will go a long way.
Admin panel
Like the user interface, the admin dashboard is equally important for the launchpad owner. This helps the verification processes to happen smoothly. Thus, the other side of the platform, i.e., the admin side, should also be built with sophistication. Because they must be able to verify and cross-check projects and investors on the launchpad and must be able to delete illegitimate accounts to make it investor-friendly and crypto-project-owner-friendly. Importantly, the admin panel must provide a clear view of analytics and data about the actions in each and every project token sales and the sales of the platform’s native token.
Integrations and additions
It is essential to stay on top of the trends when designing a tech product. Technology changes every day, and we must adapt to what is relevant and what drives consumer comfort. A recent example of catching up to trends in the industry is MetaDexa launchpad. MetaDexa provides not only ultramodern software for launching new cryptocurrencies but also effective advertising and marketing support. The marketing team of the launchpad promises the crypto projects access to a global audience. You can find out what features or services will appeal more to your platform users and continue integrating them as you function.
Test and Deploy
After doing the above steps, you’ll be entering the finale, which is testing and deployment of the platform. While testing, the platform might be sent back to the developers to make changes according to the test results. After deploying, it’s important to take in the customer survey and make the necessary changes accordingly. Once the platform is up, necessary updates should be done timely according to market relevancy and customer comfort.
List of top 10 cryptocurrency launchpads
Let’s look at some of the best launchpads today.
Polkastarter: a decentralized exchange based on the Polkadot blockchain, the Polkastarter launchpad has been designed with familiar auction systems such as dutch auctions, sealed-bid auctions, and both dynamic and fixed ratio swaps.
WeStarter: a cross-chain token initial swap protocol, WeStarter supports the IEO projects based on Ethereum, BSC, and HECO and is working on adding Polka, Avalanche, and other public blockchains to their ecosystem soon. To date, WeStarter has launched 16 projects with more than $1 billion IWO volume in total.
TrustSwap: a decentralized launchpad and protocol on the BSC network, TrustSwap operates under its native token, $SWAP, and offers next-generation, multi-chain swaps and other solutions for issues related to subscription and splitting payments. The launchpad has a Smart Swap feature that allows users to turn any token into an ERC-20 token and access more DeFi dApps.
BullPerks: a decentralized VC and multi-chain launchpad, BullPerks apply a transparent 6-tier system to ensure fair allocation for users. Users can join the launchpad’s crypto pre-sales by staking or locking its official BLP tokens.
BoostX: BoostX selects and evaluates crypto projects on BSC, Avalanche, Ethereum, Polkadot, and Terra blockchains and allows investors to put money in DeFi projects that leverage multi-chain technology. The platforms give project creators unique, customizable choices to adjust their project’s parameters, such as prices, bonuses, rewards, etc.
DuckStarter by DuckDAO: this decentralized launchpad launches blockchain-based projects in front of a large community of investors. Once a team passes its vetting process, the platform supports the team with professional marketing advice for the project’s organic and solid growth.
GameFi: a platform provided by the e-sport ecosystem, GameFi allows investors to gain early access to blockchain-based games through IGO.
Ignition: a launchpad on the PAID network, Ignition allows users to create their own policies to ensure they get paid.
OKX Jumpstart: The exclusive token launch platform of OKX, this launchpad is one of the most popular and well-trusted exchanges in the space, having supported Harmony, Pundi X, and Bluzelle token launches.
Launchpool: taking an egalitarian approach to launch and incubating blockchain and crypto projects, Launchpool allows different stakeholders (investors, influencers, experts, customers, growth hackers, traders, etc.) to collectively pool their expertise and resources to maximize a project’s growth
How to choose the best cryptocurrency launchpad?
If you’re thinking of investing in or launching a project on a launchpad, it is important for you to learn how to choose the one that best suits your needs.
For investors, security and a guarantee of return are the most crucial things to look for in a launchpad. The safety process of a launchpad should start from the initial sign-up, continuing all the way to the staking phase. The process should follow information security regulations, e.g., GDPR, to protect investors’ data and identity while providing KYC procedures to verify the authenticity of enlisted projects.
The return guarantee will vary for each launchpad and its corresponding token sales. Before investing, an investor should analyze 1) the minimum stake amount of the platform and 2) the benefits this staking tier will give in return.
For project owners, the important attributes should be the qualifications of the launchpad and its support in building the community for and increasing the visibility of the project. The launchpad’s terms of use should clearly dictate the selection process used to launch an IDO, along with the criteria determining whether or not a project is whitelisted. There should be transparency in all the launching and financing details.
Concluding thoughts
Crypto launchpads have become one of the most popular and reliable crowdfunding models in the crypto world. They benefit both the investors and the project owners. On the one hand, they help new projects find the funds and exposure needed for their growth. On the other hand, they give investors early-stage access to promising crypto projects.
Launchpads also offer an equal investment opportunity to investors of all sizes. By using scalable, efficient, and robust automated KYC tech, launchpads can ensure they remain compliant with global regulations and, at the same time, protect their users from fraud.
