What is Launchpad ?
If we make an analogy for easy understanding, we can say that launchpad is a platform where new blockchain projects ‘meet users for the first time’. Blockchain projects that have not yet started to operate fully. But they want to achieve their intended goals need to acquire a ‘user base’ in order to achieve their goals.
How Launchpad Work?
The accelerated growth of the blockchain and crypto asset world over the years has led to the existence of initiatives. They offer extremely good features for users, it also brings scammers who want to use the vulnerabilities of these channels. Which are still the foundations of these channels.
Launchpads can also be considered an effective protection method for users against these scammers. Users who want to earn high rates of profit by getting involved in an existing new project at an early stage should directly reach the creators of the project, assuming that they do not use launchpads. This situation also brings risks.
Launchpads conduct a detailed research before accepting blockchain projects that will pre-sell tokens or coins. As a result of the research, they continue to work with ‘suitable’ projects. Although there is not yet a uniform security investigation procedure. And each launchpad carries out its own evaluation process. A preliminary examination on behalf of the users provides security to the users.
Know Your Customer (KYC) Process
In order to prevent users from manipulating the system by using anonymous names or fake identities while using launchpad platforms and gaining unfair profit, ‘know your customer’ or more commonly known as ‘know your customer – KYC’ process is carried out.
When becoming a member of launchpad platforms, users provide personal information. Auch as name and date of birth as requested on any website. However, launchpads make extra requests. These are difficult to be copied by other users, such as an identity document, a selfie taken in real time.
These requirements not only prevent manipulation of the system, but also increase security, ensure legal compliance (depending on the specific case), and prevent anti-money laundering (AML).
‘Equitable’ Distribution and Prevention of Pump and Dump
The general sales mechanisms of Launchpads prevent the market manipulation known as ‘pump and dump’. Blockchain projects that will sell tokens or coins on Launchpad platforms provide users with information. Such as sales dates, the amount of tokens or coins to be sold. These sales details vary entirely according to the project. However, it is seen that in the vast majority of sales, sales are made according to the equal distribution method. It is precisely this sales system that prevents market manipulation.
In the ‘pump and dump’ system, one of the investors is in a position where he alone owns a very large volume of the crypto asset in question. Thanks to this power, the value of the crypto asset gradually climbs in the market. And in a short period of time, he sells everything he owns and makes a huge profit. But in doing so, he causes the crypto asset (this may be a token or coin) to lose tremendous value. This creates an unsafe and loss-making environment for other investors holding the same asset.
Launchpads use the principle of equal distribution to all, which means that no one person who will own the asset to be sold can own a large amount of the asset from the very beginning. In this way, it cannot indirectly manipulate the market.
Sale in the Launchpad
The main function of launchpads is to enable new projects to sell tokens or coins. In this first sale, the price of tokens or coins is (usually) much cheaper than the launch sales to be made in the full realisation of the project. This is the main reason why investors/users show interest in Launchpad sales.
By buying tokens or coins at the cheapest possible price even before the launch, users make investments that they can make maximum profit for themselves. The money collected from these investments also provides the necessary financing for the creators of the project to continue developing the project and add new features. It is a highly profitable agreement for both parties if it is executed in a healthy manner.
Types of Sales / Supply
The sales / offerings to be made according to the content of the project selling in Launchpads can also take different names.
ICO (Initial Coin Offering)
ICO stands for ‘Initial Coin Offering’, i.e. ‘Initial Coin Offering’, is the supply of coin sales.
IDO (Initial DEX Offering – Initial Decentralised Exchange Offering)
IDO stands for ‘Initial DEX Offering’, meaning ‘Initial Decentralised Exchange Offering’. ‘The term ‘Decentralized Exchange’ is abbreviated as ‘DEX’. The fact that the tokens to be sold in IDO sales will be traded on a decentralised exchange is the main feature that distinguishes IDO sales from other types of sales.
INO (Initial NFT Offering)
INO stands for ‘Initial NFT Offering’, that is, ‘Initial NFT Offering’. The launchpad sales of ‘Non-Fungible Token – NFT’ or (in our opinion, a very successful translation) ‘Qualified Intellectual Property’ for the first time are called INO for short. NFTs are often perceived as works of art for which it is technically impossible to create a second one, and it is this element that fundamentally makes them valuable.
IGO (Initial Game Offering)
IGO stands for ‘Initial Game Offering’, which means ‘Initial Game Offering’. Public sales of blockchain-based game projects, in-game assets or game tokens are briefly called IGO.
Advantages of Launchpad for Investors
Early Stage Investment Opportunities
Launchpads, as mentioned earlier, give investors access to tokens or assets of new projects much cheaper than launch prices. For investors, this means participating in projects at an early stage and potentially realising high returns.
Security and Scrutiny
Launchpads examine projects in detail and allow/list them to sell within their own organisation. This preliminary research reduces the risk of investors being scammed and investing in fake projects.
Interface and Ease of Investment
If Launchpads are heavily preferred by users, it ensures that sales are mainly made from the same place. This situation brings along the ability of users to perform the actions they want to do comfortably thanks to a simpler interface. Familiar and easy-to-use interfaces can be considered a convenience for traders who do not want to trade on a different interface each time.
Providing Investment Options
Launchpads offer a variety of investment opportunities from different projects and sectors. For investors who usually invest in the same type of projects, this is an opportunity to diversify their portfolios.
Community and Knowledge Sharing
Launchpads allow investors to learn about projects and interact with communities. This allows investors to make more informed decisions.
Advantages of Launchpads for Projects
Launchpads allow project creators to reach a wider audience of investors than a sales process conducted entirely by themselves. This opportunity allows projects to attract more attention and attract a larger number of potential investors.
Marketing and Promotion
This situation varies according to the launchpad, it cannot be said that there is a market standard. However, some launchpads provide marketing support to projects. This support contributes to making projects more visible and reaching a wider audience.
Reliability and Reputation
Launchpads, in order to protect their own assets and remain a reliable platform in the eyes of investors, only include projects that they find ‘reliable’ and allow them to sell. Being accepted by a launchpad that is mostly preferred by investors indirectly establishes a reliable reputation for the project. If investors find the projects reliable, it means more investment and more capital formation.