The cryptocurrency industry is growing at an exponential rate globally, with about 1 billion people around the world expected to adopt cryptocurrencies in 2022. What’s even more interesting in the advancement of cryptocurrency is that over 10,000 are in circulation, but more than 12,000 have existed, which is indicative of the acceptance of cryptocurrency and its value in the eyes of keen investors.
The popularity of cryptocurrencies has paved the way for many important investor-friendly innovations, facilitating an acceleration in crypto acceptance and adoption on a global scale. One such innovation that many crypto investors are gravitating towards is the crypto launchpad.
Crypto launchpads are slowly becoming the backbone of the decentralized finance ecosystem, offering small and large cryptocurrency projects, whether it be gaming, metaverse, or Move-to-Earn apps access to a pool of investors wanting to find the next big thing. They are drawing investors and entrepreneurs of all sorts into new crypto projects that are worth their time and money. In this piece, let’s find out what crypto launchpads mean and of what benefit they could be to the crypto ecosystem. So, what exactly are crypto launchpads?
What Are Crypto Launchpads?
Crypto launchpads, also called crypto incubators, are special platforms that help blockchain-based projects take off. These platforms act as fundraisers for any crypto project. They provide a group of investors access to token sales that are in the early stage. This kind of access ensures that investors can achieve bargain prices on sales before they become publicly available.
Launching anything on a crypto launchpad involves buying tokens at low fees, which is a huge plus for investors, signifying low investment costs. As a result, many projects are approaching crypto launchpads to raise requisite funds.
Top crypto launchpads also safeguard investors and get more capital by screening out scams or rug-pulls, which are very common and thorny on other non-launchpad platforms, while a third party usually performs the KYC (Know Your Customer) process as part of new users’ verification.
Moreover, early joiners of successful crypto projects always benefit the most because they stick with the project from the bottom, thus reaping the fruit of their labor in the long run.
Types of Crypto Launchpads
1. Initial Dex Offering (IDO) Launchpads
Initial Dex Offering (or IDO) is a decentralized crowdfunding platform that is a relatively new way of raising funds in the crypto industry. Usually, this kind of fundraising is done by swapping tokens representing various assets hosted on a decentralized exchange (DEX). IDOs are frequently carried out when a project releases a currency or token through a decentralized liquidity exchange.
IDOs offer businesses a tool for engaging their communities in an economy that both enriches their products and services while allowing them to make smart business decisions regarding their assets. Most IDO launchpads also have native tokens, which are sometimes the qualifications for users to participate in crowdfunding.
2. Initial NFT Offering (INO) Launchpads
The Initial NFT Offering (INO) launchpad is a new cryptocurrency crowdfunding mechanism based on the same fundamentals that involve offering a set of limited NFTs for sale.
NFTs are experiencing a massive adoption as many prominent musicians, artists, athletes, and INOs have risen in popularity with the NFT hype, which benefits both content creators and investors. INO involves offering a set of NFTs on launchpads or marketplaces for sale to public investors.
3. Initial Coin Offering (ICO) Launchpads
Initial Coin Offerings (ICO) are an ingenious approach for raising funds through the use of cryptocurrencies. Such a strategy is more prevalent in cryptocurrency projects that are yet to fully develop their blockchain-based product, service, or platform. The funds collected on ICO events are normally received as Bitcoin (BTC) or Ether (ETH), but in some cases, fiat currency may also be taken as payment.
Usually, investors engage in Initial Coin Offerings with the hope and expectation that the digital token (or coin) and its corresponding company will be successful, possibly resulting in a good return on investment (ROI) for those who are regarded as early supporters.
4. Initial Game Offering (IGO) Launchpads
Despite not being very popular, Initial Game Offerings Launchpads are platforms hosting Initial Game Offerings (IGOs), gaming metaverses, P2E projects, in-game utilities, and marketplaces for trading gaming/metaverse NFTs. They help developers procure crowdfunding for their projects and monetize their tokenized creations.
IGO Launchpads follow a tiered structure for their allocations. The higher your token staking quantity and duration, the higher your tier, and the greater your priority status and chances of winning guaranteed allocations. Some IGOs include Game starter, Enjin Starter, and PlayPad.
Crypto Launchpads and Their Benefits to the Crypto Ecosystem
Crypto launchpads have a couple of inherent advantages that they can offer to both investors and founders, which also impact the ecosystem within which they operate.
1. Crowd Fundraising
Every business reaches a certain point where they need to scale up, and fundraising is one major way to get to the next stage of development. This is no different for crypto projects. For founders or creators, launchpads are a novel approach to raising funds that have never been possible in the past.
Crypto launchpads play a key role in offering substantial funding that helps in venture development and business expansion. They also serve as the perfect platform for the soft launch of a cryptocurrency before making it available to crypto exchanges.
2. Early Stage Investment
Since investors get in on a crypto project early, it allows participants to enter at the lowest possible price and benefit from the maximum returns. Project tokens’ price can skyrocket when it goes public, so buying them early in their life cycle is definitely a super sweet deal as a member of any crypto launchpad. Clearly, this is one major reason that investors flock to crypto launchpads.
3. Security of Projects and Token Appreciation
More than $1.6 billion in crypto has been stolen from users in 2022, surpassing the total amount stolen in 2020 and 2021 combined. This highlights a security risk that chases potential investors away from crypto projects. However, launchpads help because all the projects enlisted in launchpads are all verified, which provides a safer ecosystem for founders and investors.
Launchpads mean investors do not have to worry about losing their money to scams or frauds where startup founders take their investors’ money and disappear into thin air.
Also, apart from early access to projects, another reason to motivate investors to explore launchpads is the possibility of value appreciation of the native token. When investors believe that a crypto project can appreciate over the years, they are more likely to invest in it.
4. Community Building
Launchpads help build community over time, creating a fertile ground for loyalty and indirect mouthpieces for crypto projects opened by founders. As the crypto project continues to grow, it will garner more investors interested in participating in the project and purchasing tokens.
Project developers also have the room to interact directly with their investors on a single platform. There can be occasional meetings to talk about recent updates in the project, allay fears and build more participation. Investors love to be part of building something; after all, they’ve put in the money.
Crypto launchpads play a significant role as a bridge between investors and developers to develop a project. Startups need access to good funding for next-stage project development, while investors have access to some sweet early stage deals. These launchpads basically allow many projects to be created often and most of them rely on a decentralized world to raise income for their projects.