Many cryptocurrencies are available today, and as we speak, even more, are being developed. When a new crypto project is under making, it needs to raise capital for further development. But with the overwhelming amount of new projects, the lines are blurring between scams and real cryptos. As a mechanism to successfully filter new crypto projects and present investors with ventures to invest in, the crypto launchpad was built. It has led to the discovery and successful development of many new crypto startups with sufficient funding and great ROI for investors.
Let’s dive more into how beneficial launchpads can be for developers and investors.
A launchpad is a platform that allows a blockchain project to raise new funds and gain access to early investors. Launchpads for crypto are also known as crypto incubators. A launchpad offers a unique opportunity for projects to get their foot in the door, so to speak, by giving them a chance to sell their tokens at a lower price than what they would be offered after launch. This incentivizes investors to buy in early and contribute to the project’s success.
The early-stage tokens offered on the launchpad are priced lesser than the price after launch. Thus, investors are keen on securing good deals and thereby contributing to raising capital and community building. The cost of launching crypto on a launchpad is very less, and more projects are choosing to go this way for fundraising.
Launchpads must have top-notch features to serve the investors. Some important features include the following:
KYC (Know Your Customers): Users must be registered and validated, even if it’s an initial offering. A KYC feature that collects their details will go a long way in retaining them easily, even after the launch.
Native Tokens: Launchpads can also have native blockchain tokens unique to the platform and offer staking rewards for investors when investing in listed initial offering projects.
Fundraising models: Launchpads support several fundraising options such as ICO, IEO, IDO, STO, INO, and IFO to assist project owners in generating funds based on their needs.
Built-in Wallet: A built-in wallet is essential for traders and investors to store their assets. The decision of what type will depend on your idea, but there are some requirements you should keep in mind when making this choice, such as security features.
Compatibility: The launchpad solution you get from your blockchain developers should fit the bill in every way. Here, choose a high-quality and reliable technology that best suits what it is supposed to do – be compatible with all aspects of your business.
Automated Liquidity Pools: Liquidity groups are a great way to increase trading experience. You can be on any platform. The main protocol is that you need liquidity tokens for deposits, allowing traders access to these pools of money where they’ll have more opportunities at better prices because there’s no betting involved like in traditional markets.
Multiple Funding Rounds: Multiple funding rounds are required to raise the necessary tokens. Depending on how many people invest, they will have one or more respective investment periods.
With the sheer number of tokens in the market available every day, it is very easy to get duped by hype and bad actors in crypto. In the past, some crypto projects have turned out to be scams to make the founders some bucks, and then they are gone. They can do this without ever revealing their faces.
The problem is that it becomes really hard for excellently built, legitimate crypto startups, the ones that are high quality, to break through the noise of all these other scam projects and stand out.
Due to the name and reputation of the launchpad (which is built over time), investors can use them as a filter. Launchpads are effectively putting their neck out for new crypto projects. In that way, crypto projects benefit because they get filtered through all the noise of scam projects. Investors benefit from the filtered-out scams, but ideally, the best projects stand out among the rest.
Fun fact: launchpads sometimes launch other, newer, smaller launchpads too.
Importantly, launchpads create communities. These are platforms where developers can communicate about what makes their projects valuable and allows investors to gain insight into which project is worth investing money in.
Raising funds for a crypto project on launchpads is pretty easy. The developers must ensure that the project is good enough to be picked up by launchpads and that resources such as whitepapers and tokenomics are ready.
Here’s how launchpads work commonly:
Launchpads like Polkastarter and Binance Launchpad each have their tokens for the investors to hold and trade. When you hold the token, you become eligible to get early access to all the projects hosted on the launchpad.
So by holding a crypto token of a launchpad, you show yourself to be a good-intentioned investor who will go long-term on the projects that the launchpad supports. You can think of this as a private invitation to invest in a new project that they have diligently filtered out.
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Many launchpads have a tier system. The largest holders of the launchpads token are given guaranteed positions in new projects, and others on the lower tiers of investment are given lottery allocations. In a lottery allocation, you can only sometimes guarantee that you will be able to invest in their supported projects because the early supply of tokens is either assigned at random or reserved for upper-tier investors. But, the more the launchpad hosts new projects, the price of the launchpad’s token can also potentially increase.
Creating a launchpad begins by collating all your ideas like any other crypto project. This is the stage where you decide the details of your launchpad, such as the target domain, the technology to be used, competitors, marketing strategy, etc.
You can take inspiration from some of the top launchpads that exist today. For example, one brilliant launchpad project to learn from is Binance BNB. It recorded sales of over 1,300% of its native currency in 2021. It outperformed market leaders such as Bitcoin (BTC) and Ethereum (ETH). Early investors gained significantly. The launchpad development company you choose can also help in ideation and planning.
A well-written whitepaper can make or break your crypto project. Frame an impeccable, to-the-point, and explanatory whitepaper for your launchpad to convey your project’s image to the whole world.
Whitepapers are data-based documents containing information collected from original research, case studies, and external academic research. A good whitepaper serves multiple purposes at once–it should be well-researched, presenting information that otherwise would be difficult to find on the internet. Here are some tips that help write a good whitepaper:
Some launchpads have a native token, and we can trade using that only. You can decide whether you want a native token or adopt other popular tokens, like Ether, Tez, etc., that the crowdfunding participants will purchase. The advantages of the native tokens are that you can customize your coin, like name, logo, initial supply, etc.
Take the example of TrsutPad’s coin TPAD, $0.085465 USD, with a 24-hour trading volume of $1,572,450. The profit margin of TPAD has even increased by 9.0% in 24 hours. Such being the power of native coins of a launchpad, it must be created and strategized carefully because it could also serve as an investor magnet.
You must ensure users an intuitive and easily navigatable experience while scrolling through different crypto projects on your launchpad. 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.
Customize the user-end features in the white-label launchpad solution to fit your project’s tone and needs. These features can revolve around security (encryption, blacklist management, 2FA, etc.), application (UI/UX, accessibility, performance, configuration, integrations, etc.), built-in features such as analytical dashboards, tier, and user management, KYC modules, etc., or other add-on features such as a support system, multi-language communication, etc.
If needed, you can refine the back end for the new features to ensure smooth functionality. This may include refining encryptions, adding a security layer, updating the firewall, DOS, DDOS, etc.
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.
Binance is the largest cryptocurrency exchange on the planet. BSCPad is the first launchpad based on the BSC Network. The platform enables funding, liquidity gains, and token distribution, all in a decentralized architecture. BSCPad has the famous “two-round0 allocation model,” which makes it stand out from other launchpads.
In the tier method, there is a guaranteed allocation in the first round, and any remaining share will be offered on a first-come-first-served basis in the second round. The platform operates using its native token, $BSCPad. The higher the tier and allocation a user gives, the more they stake.
TrustSwap is another BSC-based decentralized launchpad. The platform’s native currency is $SWAP. It addresses a very specific problem that occurs with early investors. Often a new coin can get so excited that its price can skyrocket in the first few hours or days, and then it dumps suddenly. This kind of activity can be detrimental to a new project. TrustSwap has a few clever innovations to protect projects from immediate sell-offs.
TrustSwap locks a pre-released token for a set period and sets staggering release periods to incentivize early buyers to hold. Not only does the project gets supported by early funding, but it also gives confidence to investors in the upward price movement.
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With the help of Polkastarter, 109 different projects have raised $49 million in funds by conducting secure and decentralized token sales. All these successful crowdfunding efforts were made possible because this platform uses unique capabilities offered through the Polkadot network to prevent whales from manipulating prices on cross-chain trading platforms.
Huobi Prime is the launchpad of the leading global cryptocurrency exchange Huobi, launched in 2019. The launchpad has hosted several successful initial offerings, including BitTorrent Token, TOP Network, and Harmony.
KuCoin Spotlight is the launchpad of the popular cryptocurrency exchange KuCoin. Since its launch in 2013, KuCoin has become one of the most successful Chinese exchanges. The platform offers incentives for users to use specific digital assets.
Cryptocurrency launchpads are essential for a set of simple reasons. First, they provide an easy way for people to invest in new but real crypto projects. Second, they help to legitimize new currencies and give exposure to more investors. Solving some of the biggest difficulties new projects were once facing, launchpads have become the staple for the modern crypto fundraising system.