Crypto launchpads allow new crypto projects to raise funds while giving investors first access to tokens. Here’s how they work.
In the world of cryptocurrency, joining projects early may be beneficial. For example, investors who bought Bitcoin (BTC) in 2011 are now reaping the benefits of their investment. They discovered something new, saw its potential and stuck with it.
With cryptocurrency’s growing worldwide adoption comes a new fundraising platform: the crypto launchpad. Launchpads allow crypto investors to discover and invest in early-stage crypto projects before they are listed publicly. As a result, they can buy tokens for cheap and profit more when their value increases.
In recent years, crypto has enjoyed a significant rise in popularity despite market volatility which saw Bitcoin fall from $60,000 to around $35,000, Ether (ETH) crashing 40%, and Dogecoin (DOGE) falling 45%. The push for regulation has also been stepped up, with the Biden administration taking steps to regulate cryptocurrency.
Despite these events, interest in cryptocurrency remains at an all-time high. Investors and the general public are on the lookout for the next big thing, and crypto launchpads may offer the ideal platform.
Launchpads allow crypto project founders to build awareness and generate capital for their companies at a small price. Moreover, launchpads offer investors and founders a secure platform to discover and connect with each other.
What is a crypto launchpad?
A crypto launchpad, sometimes called a crypto incubator, is a decentralized exchange (DEX)-based platform where crypto projects are introduced and can obtain funding. Before being publicly listed, early-stage crypto token sales are made available to the project’s crypto investors.
Investors see this as a great chance to profit from a future price increase by buying tokens at low prices and selling them at a profit later on. Because the cost of launching is so minimal, the platform can also draw in more crypto projects for funding.
New founders also stand to gain from the platform, as they will have easier access to the pool of cryptocurrency investors and fans waiting for the next exciting venture.
In 2021, at the bull market’s peak, many new coins and projects were launched, with investors pouring money into them. However, some were scams, and many lost money since they didn’t have the proper skills or time to screen the projects.
In contrast, trusted crypto launchpads perform due diligence on behalf of users and investors, which is another reason for their growing popularity. New projects undergo a stringent screening process, with a third party enlisted to conduct Know Your Customer (KYC) verification on new users, helping to protect both founders and investors.
How does a crypto launchpad work?
Crypto launchpad platforms exist to connect cryptocurrency projects and interested communities. Launchpads help founders raise money from potential users and investors and give investors a chance to maximize their return on investment.
Transparency and security are two key features that attract investors. Users who create a new account will typically be subjected to a KYC process to verify their identity. This procedure also makes it harder for someone to manipulate the system by making transactions using several aliases.
Each crypto launchpad will have its own set of handpicked cryptocurrency projects and their current status. Interested investors should be able to access important information about these projects, such as the price and start date. Investors will also be able to purchase specific tokens once their sale starts.
Token sales on crypto launchpads are similar to blockchains in that they provide transparency and make it easy to track the distribution method for each token. This makes it possible for retail investors to invest in early-stage tokens. It further encourages an even distribution of tokens among investors and discourages “pump-and-dump” tactics.
What are the benefits of crypto launchpads?
Launchpads are advantageous for bringing cryptocurrency projects and investors together. Among the other benefits are the following:
- Low fees: Some launchpads only charge a nominal fee, while others don’t charge anything for listings. Some launchpads make it quick and easy to start a project by lowering the barriers to entry.
- Security: Launchpads vet both users and projects thoroughly, safeguarding everyone involved. It’s also unlikely that a breach would occur because investors have absolute ownership of their assets, and launchpads do not store user funds.
- No waiting period: Tokens are available immediately after purchase without needing a processing period.
How to use crypto launchpads
The following are some general steps; however, they may differ slightly depending on the crypto launchpad they use:
Types of crypto launchpads
Initial DEX offering (IDO) launchpads
IDO launchpads are decentralized platforms for crowdfunding. Tokens that represent assets hosted on a DEX are traded here. Some known IDO launchpads are FireStarter, BSCPad, GameFi, Seedify and TrustPad.
Initial NFT offering (INO) launchpads
INO launchpads allow investors to fund projects in which a collection, or collections, of nonfungible tokens (NFTs) are offered for sale on the platform. A few INO launchpads are Only1, BSCStation and Seedify.
Initial coin offering (ICO) launchpads
ICO launchpads allow founders to raise funds to finish developing their blockchain projects by offering tokens to investors. Investors will put money into promising projects, hoping for a significant return. Well-known ICO launchpads include CardStarter, Binance Launchpad and Polkastarter.
Initial game offering (IGO) launchpads
IGO launchpads are platforms where game and metaverse developers can get funding for their projects. These launchpads host IGOs, play-to-earn projects, gaming utilities and related NFTs. Some examples of IGO launchpads are Gamestarter, Enjinstarter and PlayPad.
Characteristics of a good crypto launchpad
Before investing in or launching a cryptocurrency project, it is important to do some research on the right launchpad.
For investors
For investors who want assurance that these projects are safe, profitable and will earn a good return on investment, it’s vital to check the launchpad’s commitment to security. The platform should follow strict security protocols, use KYC checks and take other steps to safeguard personal information.
The minimum staking amount and perks associated with each launchpad will vary, so careful analysis is needed before deciding.
For founders
Founders interested in launching their project through a crypto launchpad should assess how well the platform promotes related projects and whether or not the community is supportive. In addition, it is essential to check the project vetting process, the criteria, and how fair and realistic the launchpad’s terms are.
A supportive community can be of great benefit since other members can help market projects to users and potential backers.
The future of crypto launchpads
Crypto launchpads are new platforms designed to help facilitate the funding of crypto projects. They aim to alleviate growing distrust surrounding cryptocurrencies and increase investor confidence.
By rejecting scammers and promoting legitimate crypto projects, launchpads help to improve the market and provide investors with a sense of security, which is advantageous for investors and founders. For investors, it helps to lower the risks while giving founders additional opportunities to market their projects.
As a bonus, regular investors can now access investments formerly reserved for institutional investors and venture capitalists. The development of crypto launchpads should make cryptocurrency investment easier and safer. And with more investors, it is hoped that the cryptocurrency industry will continue to grow.
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