Crypto launchpads have become increasingly popular in the blockchain world, and for a good reason. They are the latest iteration of crowdfunding for crypto projects and offer advantages both for investors and crypto startups.
In this post, we take a closer look at how the launchpad model works, what are the benefits of using these platforms and some of the top crypto launchpads on the market today.
What are crypto launchpads?
A crypto launchpad is an initial exchange offering (IEO) or initial DEX offering (IDO) platform, sometimes also referred to as a token launch platform.
The goal of a crypto launchpad is to bring together investors and projects in one place, providing both parties with the opportunity to participate in token sales without going through intermediaries or buying on shady platforms that may not be trustworthy.
The crypto launchpad model can reduce the risk for investors by making it easier for them to see which projects are worth funding before committing capital.
It also provides project teams with access to funding from a wider audience as well as marketing channels that don’t yet exist at the early stages of their development cycle.
What is the difference between an ICO, an IEO and an IDO?
These 3-letter buzzwords can be confusing to newer investors, so let’s quickly go over what each of them stands for.
What is an ICO?
An ICO (initial coin offering) is the original crypto crowdfunding model in which a project sells tokens to investors in exchange for crypto or fiat currency. ICOs became popular in 2017 when crypto gained mainstream attention and funds were flowing freely.
During an ICO, the projects themselves conduct the token sale on their own platform without any third-party vetting process.
They gained incredible popularity by the end of 1017 with billions of dollars raised. However, the ease of getting funds this way attracted a large number of bad actors and Ponzi schemes, which quickly thrashed the reputation of the method and caused many regulators to crack down on the ICO craze.
What is an IEO?
IEOs, or initial exchange offerings, were the next evolution in crypto crowdfunding. They are conducted on cryptocurrency exchanges instead of directly by the project.
The most notable difference is that crypto exchanges vet and select projects to list on their crypto trading platform before they launch the IEO. This adds an extra layer of security for investors, as the exchange itself conducts due diligence on the project to ensure that it is legitimate and has a good chance of success.
The first IEO was conducted by Binance, and since then, many other exchanges have followed suit. IEOs became very popular in 2019 and 2020, with some projects raising millions of dollars in just a few minutes.
What is an IDO?
With the rise of decentralized crypto exchanges, IDOs, or initial DEX offerings, have become the latest trend in crypto token launches.
IDOs are conducted on decentralized exchanges that run on smart contracts. The launchpad team vets the projects, requiring KYC and other compliance measures from the founders. For those who pass and are accepted into the program, the launch is managed together by the launchpad and the project. The same is true for marketing.
This model has a number of advantages, chief among them being decentralization and transparency. However, it also comes with a few challenges, such as the lack of liquidity during market downturns and the difficulty of getting listed on popular IDO platforms.
The benefits of using crypto launchpads for investors
- Access to early-stage projects: One of the biggest advantages of launchpads is that they give you access to projects that are still in their early stages. This means you can get in on the ground floor and potentially see a higher return on investment (ROI) than if you wait until a project is further along.
- Diversification: Launchpads often require investors to hold a certain amount of their own tokens in exchange for access to their IDOs. By investing in a launchpad project, you’re likely to get a chance to invest in multiple projects, diversifying your portfolio and minimizing your risk.
- Professional management: When you invest in a launchpad project, you can be confident that the team behind it is professional and experienced. This is not always the case with early-stage projects, which can often be run by inexperienced founders.
- Support from the community: Launchpad projects typically have strong support from the crypto community. This means there’s a good chance that the project will succeed, which in turn, could lead to a good return on your investment.
The benefits of using crypto launchpads for crypto startups
- Funding: One of the main benefits of using a launchpad is that it gives startups a chance to raise funds. This is especially important for early-stage blockchain projects that may not be able to get traditional seed investments.
- Exposure: In addition to funding, launchpads also give startups exposure to a wider audience. This can help them attract more investors and build a strong community around their promising crypto projects.
- Professionalism: As mentioned above, working with a launchpad gives startups access to experienced professionals who can help them with everything from marketing to compliance. This can be a huge advantage for young projects that may not have the resources or expertise to navigate the often-complicated world of crypto.
- Improved odds of success: Overall, the odds of success are improved when a startup works with a crypto launchpad. This is due to the fact that launchpads typically vet projects before they list them, and they also provide support and advice that can help startups avoid common mistakes.
The best crypto launchpads on the market
The top crypto launchpads combine advanced capabilities such as cross-chain technology, security, and compliance with a wide range of assets and easy-to-use interfaces. This makes them ideal for both experienced investors and first-time users.
Success leaves clues, and you should absolutely look at the launchpad’s track record when you are researching which one to use. The best launchpads have a history of successful projects and happy users. They should also have a strong community presence and be able to provide you with all the information you need to make an informed decision.
Few investors have the funds to hold enough launchpad tokens to gain access to allocations on many at the same time. If you can only afford 1 or 2, choosing which launchpad to invest in is a big decision, and it’s important to do your due diligence before you commit. But if you choose wisely, a launchpad can be a great way to access early-stage crypto projects and potentially see a higher ROI than if you wait until a project is further along.
Seedify
Seedify is an innovative platform that helps early-stage startups raise capital and get exposure. The Seedify team includes experienced entrepreneurs, investors, and marketers who are passionate about helping startups succeed by offering an incubator in addition to being a launchpad.
Seedify has a long history of successful token launches, focusing on gaming blockchain projects. They provide a wide range of services to help startups grow their businesses. This includes everything from marketing and PR to compliance and legal support.
Binance Launchpad
Binance is one of the most popular cryptocurrency exchanges in the world, and their crypto launchpad is one of the most respected in the industry. They typically list high-quality projects, and they have a good track record of successful launches.
Getting access to the wide user base of Binance is a coveted prize for any startup, so expect tough competition and prepare to jump through multiple hoops if you plan to launch your crypto business on their own token launch platform. But if you are selected, it will be well worth the effort.
Polkastarter
Polkastarter is a leading decentralized exchange for launching token sales. They offer support for multiple blockchains, KYC/AML compliance, and a user-friendly interface.
Polkastarter is one of the few launchpads that accept applications from a wide variety of web-3 projects, not just crypto gaming or metaverse. This makes them a great option if you are looking for a crypto launchpad with a diverse portfolio.
Their rigorous selection process means that only the best crypto projects are listed on their platform. If you are a founder, this can be a disadvantage if you are not selected, but it also means that investors can be confident they are investing in high-quality projects.
DAO Maker
DAO Maker is an innovative platform combining a decentralized launchpad with a community launchpad where members can vote to fund projects.
This unique approach means that projects who put more effort into community building have a higher chance of getting funded, which provides some assurance to investors that they are putting their money into a project with an engaged audience and, therefore, a higher chance of success.
DAO Maker also has a strong focus on social media and marketing, which is crucial for successful crypto launchpad projects. If you are selected to launch on their platform, they will provide you with guidance and support to help you grow your social media following and get exposure for your project.
Gamefi
Gamefi aims to be the number 1 launchpad choice for crypto gaming projects. They are a relatively new platform, but they have already had 60+ successful token and game asset sales.
One of the benefits of Gamefi is that they offer a wide range of services to help you launch and grow your crypto project. This includes marketing, PR, and business development support. They basically act as a decentralized incubator.
They also have a strong focus on community building. They want to create a supportive environment for founders and help them connect with influencers and thought leaders in the gaming industry.
FAQ
Why are launchpads so popular?
Blockchains are still in the early stages of development, and there’s still a lot that needs to be done in terms of infrastructure, regulation and education before mass adoption takes place. For this reason, many crypto projects will raise funds via token sales to investors in order for them to get started and scale their businesses effectively.
How do crypto launchpads make money?
Launchpads typically take a small percentage of the tokens sold in the token sale as a fee for their services.
What are the risks of using a launchpad?
As with any early-stage investment, there is always a risk that the project will not achieve the success it is hoping for, and you will lose your investment. However, by carefully researching crypto projects and the team behind them, you can minimize this risk.
For an investor, one of the risks is that launchpads often require you to hold their native utility token. As the price action of these tokens is volatile, they add an extra layer of risk for the investors holding them.
It is also important to note that most launchpads have a minimum investment amount, so if you are not prepared to invest at least that much, you will not be able to participate.
What is the difference between a launchpad and an exchange?
A launchpad is a platform that helps startups raise capital by selling their tokens to investors. An exchange, on the other hand, is a platform where you can buy and sell cryptocurrencies.
While some exchanges also offer a crypto launchpad service, they are not the same thing. Launchpads typically offer more support and services to help startups grow their businesses, whereas exchanges focus on facilitating trades.
About RR² Capital
For more information about RR² Capital and our expansive disruptive technology-focussed investment portfolio, visit our website here or send us a mail here.
