What is a launchpad in cryptocurrency?

For those hoping to get a new cryptocurrency project off the ground, access to funds is vital. One increasingly popular way to raise capital is by using a cryptocurrency launchpad, otherwise known as a cryptocurrency incubator, which gives investors the opportunity to buy some of the project’s first coins, tokens, or other assets and support its early development.

In this AAG Academy guide, we’ll explain what a cryptocurrency launchpad is in more detail, and look at how they work. We’ll also cover their advantages, look at some of the most popular crypto launchpads in operation today, and explain how you can create one.

What is a cryptocurrency launchpad?

Cryptocurrency launchpads can be seen as somewhat similar to crowdfunding platforms like Kickstarter or Indiegogo. They are a platform through which startups can introduce a new blockchain project and give early investors the opportunity to buy their first cryptocurrency coins or tokens before they are made available to the wider public.

Launchpads are often facilitated by decentralized exchanges (DEXs), which are considerably more flexible and more affordable to use than centralized exchanges (CEXs) — thanks in large part to the fact that they are unregulated. Despite this, launchpads are significantly safer from an investor’s standpoint than traditional ICOs facilitated by new projects themselves.

As a result, cryptocurrency launchpads have become increasingly popular in recent years, and developers have already poured billions of dollars into them.

How do crypto launchpads work?

One of the primary objectives for crypto launchpads is to connect credible new projects with the people who are interested in investing in them. It is a relatively simple process: Potentially promising projects are listed on the platform, giving investors the opportunity to put capital into them in exchange for early coins, tokens, or other assets — often at a discounted price.

There are a number of different types of launchpad that can be used, depending on the startup’s focus. Some of the most common include:

Initial coin offering (ICO)
By far the most common type of launchpad, an initial coin offering (ICO) gives investors access to a project’s first coins or tokens. These are typically used by blockchain startups with general purpose use cases.

Initial DEX offering (IDO)
An initial DEX offering (IDO) is very similar to an ICO in that they offer coins or tokens. The big difference is that they are facilitated by a DEX, which means that investors usually get access to their tokens immediately, rather than having to wait for an exchange listing later.

Initial NFT offering (INO)
As you may have guessed, an initial NFT offering (INO) gives investors access to a project’s first NFTs, which are often part of a limited-edition collection that has greater scarcity than future releases. These are commonly used by projects that are heavily focused on NFTs.

Initial game offering (IGO)
An initial game offering (IGO) is something of a hybrid option in that they sometimes offer tokens and NFTs, but they are focused on GameFi, so they are mostly used by play-to-earn startups.

What are the advantages of a crypto launchpad?

Launchpads boast a number of big advantages, which have helped make them so popular. For startups, they offer a way to almost instantly put a new project in front of a community that is actively seeking fresh investment opportunities. This kind of exposure can be hugely beneficial to startups that don’t already have a large following — or a sizable marketing budget.

For investors, launchpads make it easier to find promising new projects and then put capital into them. The ability to access a wealth of exciting startups through one platform negates the need to seek them out individually, which can be incredibly time-consuming. What’s more, acquiring tokens early at a smaller price makes it easier to profit from them later.

By far the biggest advantage launchpads offer to both startups and investors is security. Every project undergoes a stringent screening process, and every investor is vetted using proven KYC (know your customer) methods. This protects both parties and dramatically reduces the possibility of either of them being scammed — a common problem with other funding methods.

What are some popular crypto launchpads?

Depending on the type of project you’re interested in, or the type of offering you prefer, there are a number of popular cryptocurrency launchpads you may be interested in. We’ve categorized them below to make things easy:

• ICO/IDO launchpads: Binance Launchpad, Bounce, BSCPad, CoinxPad, DAO Maker, Ignition, Polkastarter, Seedify, TrustPad.

• INO launchpads: BSCStation, Only1, Polkastarter, Seedify.

• IGO launchpads: Gamestarter, Enjinstarter, PlayPad, Red Kite.

How to use a crypto launchpad

If you’re launching a new cryptocurrency project and you want to take advantage of a launchpad, the first step is choosing the one you want to use. You’ll notice there are many options listed above, plus lots of others there are not mentioned in this guide. Do your research and find out which one works best for you, depending on your project type.

You can then follow the launchpad’s official process for listing and launching a new project. This is typically a relatively smooth and inexpensive process, but as we touched on above, your startup will be screened and there will be some fees to pay. In almost all cases, the bare minimum is that you have published a project whitepaper.

For investors, using a launchpad is as simple as choosing the right one for you based on your investment strategy, then signing up for an account. You can then start investing in the projects that you’re interested in. Note that the signup process involves going through KYC verification, which means you’ll need a valid ID to prove who you are, and you’ll need to upload a photo.

It is important to bear in mind that although launchpads are mostly safe to use, there are still risks involved. As is always the case with investing, a profit is not guaranteed, so it is still incredibly important that you carry out your own research and due diligence on any of the startups you’re interested in before you put capital into them. 

References

• What is a crypto launchpad and how does it work
• What is launchpad in crypto
• What is a crypto launchpad and how does it work
• Top-10-ido-launchpads