Crypto launchpads combine the trustless investment capabilities of the community with the decentralised ecosystem philosophy.The community has been at the forefront of innovation thanks to the Bitcoin sector and Web3. It flourishes when decentralised ecosystems proliferate and break away from central hegemony held by different governing organisations. The emergence of cryptocurrency launchpads may mark the start of a decentralised venture capital framework.
The era of Bitcoin (BTC) and Ether (ETH) paved the way to new altcoins. However, by the end of 2022, there were over 16,000 cryptocurrencies. How can an enthusiastic investor pick good projects from so many? True to its ethos around decentralization, one of the most fascinating innovations that brings together investors, projects, innovators and the retail audience is a crypto launchpad. What do these launchpads do? Crypto launchpads facilitate investments and empower investors to make informed decisions through rigorous due diligence. They take the pain of curating investment opportunities from retail investors and offer them the ability to invest into cryptocurrency projects at preferential terms on valuations. Retail investors who want to participate in these investment rounds will buy the tokens of the crypto launchpads. Depending on token holding quantity, investors are typically bucketed under tiers that determine the access and valuations they get with investment opportunities.
Terms that investors get from these launchpads vary from preferential to exclusive. Preferential investment terms are generally in line with what other investors get. However, launchpad tokenholders get first preference to invest into those opportunities. Exclusive terms are those that are offered only to launchpad tokenholders. Either way, launchpad participants benefit from the structure.
In this article we’ll discy why Crypto launchpad is required, benefits of Crypto launchpads for stakeholders, how Defi projects benefit from Defi
Why is a crypto launchpad required?
Communities can access premium offerings selected by knowledgeable investors from inside the community through Crypto Launchpads. Giving investors access to information that will help them make decisions about investing in cryptocurrency projects is one of the main purposes of crypto launchpads. In a bull market, when even seasoned investors find it challenging to sort through the noise and select solid investment opportunities with strong fundamentals, this can be a crucial differentiator.
Crypto launchpads are essential to Web3 for a second reason: they provide retail investors with access to excellent bargains. Retail investors typically do not have access to high-quality initiatives in the Web2 environment until after they are listed on an exchange. Access to high-quality deals and ease of decision-making based on well-researched information on potential investments are privileges only a few enjoy in Web2. With a decentralized model, launchpads aka crypto accelerators have opened up access for retail audiences to high-quality investment opportunities.
What benefits do crypto launchpads provide for stakeholders in the ecosystem?
Within the Web3 ecosystem, there is a tripartite dynamic that includes the investor, the project, and the community. What does each player receive, though, just simply using the launchpad?
The money a startup receives from investors and launchpad community members is the main advantage of listing on a launchpad. When retail investors visit the launchpad, they will be able to view the Web3 initiatives that are listed, learn about the projects’ teams and the communities they have fostered, and put their money in carefully chosen prospects.
Web3 projects get credibility after getting listed on a launchpad, which is critical in the ecosystem. Crypto launchpads also offer a plethora of services to early-stage crypto entrepreneurs, such as tokenomics advice, marketing inputs, investor introductions and other ancillary business services. Crypto launchpads are the Web3 equivalent of incubators and accelerators in the Web2 space.
Launchpads can only be as good as the calibre of the community’s members and the important individuals who provide the correct investment possibilities, notwithstanding these advantages. With companies like as Y Combinator, Startupbootcamp, and several more leading the accelerator concept, Web2 has clearly gotten it right. We haven’t seen a legacy like this emerge for Web3.
Lastly, crypto launchpads have effectively developed a framework for the Web3 ecosystem to filter out the noise and find businesses that are worthy of investors’ attention. Therefore, as the model develops, there should be fewer frauds and swindles of investors, which will help the Web3 ecosystem from a reputational and sentimental standpoint.
How can DeFi projects benefit from launchpads?
There are several crypto launchpads, such as DAO Maker and BSCPad, that successfully operated through the previous crypto cycle. As the next crypto cycle kicks off, cryptocurrency launchpads could be a key cog in the ecosystem.
For a project to get incubated by a launchpad, it must submit extensive details to get vetted. Some of the key operational details required are permission to perform a Know Your Customer check on stakeholders, information on partners, existing investors and advisers, status of smart contract audits, the quality of user base and unit economics.
The level of due diligence that crypto launchpads conduct is essential particularly in the decentralized finance (DeFi) space. DeFi has been plagued by smart contract vulnerabilities, oracle breaches and cross chain bridge hacks. A thorough smart contract audit from a reputable audit firm can help put the investors’ mind at rest.
In conclusion, for the Web3 world to flourish, effective operation of crypto launchpads is crucial especially when the right projects with good-quality products and vision need to be identified. The model is still in its infancy and must focus on better-quality launchpad communities with a track record that spans multiple crypto cycles. This practice would make launchpads a foundational building block of the Web3 ecosystem