What is a launchpad ?
When an innovative company decides to create a token, it needs liquidity at the time of the startup. So it decides to make a fundraising called in the crypto environment : the launchpad.
How does a launchpad work ?
Investors stake a quantity of tokens that they choose (the stored tokens are those of the platform on which the launchpad is located). The tokens are thus blocked for the duration of the launchpad.
Then, when the project sees the light of day, the investors are entitled to a quantity of the new token according to the quantity they had made available.
The most popular launchpad is the one from Binance, and it was the first general exchange platform to offer a launchpad.
What is a launchpool ?
On some trading platforms you will find launchpools. They simply allow you to block a certain amount of money for a short period of time (one month maximum) and be rewarded with a fixed return (APY).
Launchpools are similar to launchpads, except that you get daily interest and you get out when you want. This makes it less risky than a launchpad.
The tokens received are also those of the new project. They allow you to diversify your investment by offering unique opportunities.
Opportunities to keep an eye on
We advise you to keep an eye on the new additions to the launchpads and launchpools. Indeed, if these are unique opportunities, they are not plentiful.
The different types of launchpad
There are historically different types of crypto fundraising, let’s take stock of the crypto fundraising technologies to date.
The main types of launchpad are :
ICOs (Initial Coin Offering)
As early as 2016, they made it very easy to raise money. One project offered investors to invest in crypto in their project in exchange for a number of tokens when they were released.
The problem is that it is an on-chain technology, which remains totally anonymous, and unfortunately allows too much porosity with illegal investments (dubious portfolios in tax havens for example). This is what existed before the launchpad.
Managed directly by the company wanting to launch a token, and given the too great anonymity of the investors, this option presents too many risks for viable projects on the long term.
IEO (Initial Exchange Offering)
In 2018, in order to alleviate the problem of ICOs, the centralized exchange platform (CEX) Binance launched the first launchpad. The fundraising is no longer managed directly by the startup company, an exchange partner handles the fundraising and it is then called launchpad.
This has two advantages :
- First of all, exchange platforms do not offer total anonymity, as users have to perform KYC identity and address verification before accessing the launchpad
- Then the platforms that offer a launchpad group together different projects and become real incubators and the new projects have more chance to be supported
IDO (Initial Dex Offering)
This time it is decentralized exchange platforms (DEX) that offer fundraising. DEXs belong to the Web3 ecosystem and require the use of a “hot wallet” like MetaMask.
IDO launchpads offer the best of the two other types of fundraising seen above :
- A return to the anonymity of the funds raised, in any case a strong Web3 philosophy
- Combined with platforms that positively expose launchpad projects
Launchpads to follow in 2023
We have selected several launchpads which often propose very interesting projects and which it is better to follow in 2023.
Here are the launchpads to follow :
- Binance Launchpad
- ByBit Launchpad
The Binance launchpad is historically important and is also the one where fundraising is the highest.
It offers carefully selected projects, with large-scale partnerships such as with soccer clubs (FC Porto and Lazio of Rome for example).
The biggest project of the Binance launchpad is STEP’N and its GMT token: This NFT-based game counts your steps via smartphone (put on your best collectable NFT sneakers and walk with them to value them).
The launchpad has raised over 8 million BNB or the equivalent of approximately $2.9 billion (as of March 2022, the launch date of STEP’N).
PolkaStarter and DuckStarter : the little Web3 brothers
PolkaStarter is a DEX launchpad, it has already enabled more than 100 projects to be born, with very positive results.
It supports projects on a selection of the largest blockchains : Ethereum, BNB Chain, Solana, Polkadot, Polygon, Avalanche and Celo.
Several successful projects can be mentioned : the futuristic metaverse CryptoVerse, or the PVP game based on the NFT Galaxy Fight Club.
Duckstarter, even if it is a bit more confidential, is still worth mentioning. It is part of the DuckDAO ecosystem.
ByBit offers, on the model of Binance, a clear and easy to access launchpad, performing IEO type fundraising.
Two projects are the payment service Kasta and the game NFT CropBytes.
How to participate in a project via a launchpad ?
Crypto launchpads offer very high APY returns during their launch phases, and are among the hottest investments.
There are many opportunities, but remember to check the fundamentals. Visit the official website of the project and make up your mind about its soundness.
From a practical point of view, launchpads often require you to use a token native to the platform you choose (BNB at Binance, Bit at ByBit, …). All you have to do is exchange the amount you want to invest and block it until the fateful launch phase.
After the launch period, you will receive a quantity of tokens corresponding to your investment.