For startups wanting to make the most of crypto fundraising opportunities, look no further than launchpads.
As a startup new to the crypto space, you might be overwhelmed by the different ways to raise funds—initial coin offerings (ICOs), initial DEX offerings (IDOs) and more. Crypto fundraising has gained momentum as there are fewer barriers to entry and greater access to a larger pool of investors. So, all things considered, you don’t want to miss out on this opportunity. If you’re not sure how to get started, try using a crypto launchpad!
What are launchpads in crypto?
Like startup incubators, crypto launchpads help projects raise funding on their platform through offerings, such as IDOs. First, you submit your project to a launchpad. Then, the launchpad vets your projects, along with many others. The vetting process factors in the project’s developmental blueprint, potential for large-scale adoption, the team behind, benefits to the crypto ecosystem and more. Once the process is complete, they allow a select few projects to feature on their platform. Then, they invite investors to buy tokens of the launchpad. For instance, if Polkastarter was the launchpad of your choice, investors would buy the POLS tokens. Using those tokens, investors can invest in different projects.
Qube Launchpad’s tweet summarizes the concept of a launchpad. “[It is] a platform for decentralized projects that want to expand the user base and raise funds for development within the framework of IDO, as well as investors eager to participate in the formation of a new crypto giant at an early stage.”
Benefits of using launchpads:
- Access to a large pool of investors and projects
Launchpads benefit both: startups and investors. Startups get to display their projects to investors around the world and, possibly, convince them to invest. Additionally, the only barrier to entry is the vetting system, which, if you don’t have any loose ends, will not pose a problem. For investors, launchpads are advantageous as they display a host of projects on one platform. Additionally, by becoming a launchpad member, investors get early access to projects, which means they get a more affordable token price than others will later.
- Safer ecosystem
Since the projects are verified, investors don’t have to worry as much about losing their money or falling prey to scams. Launchpads prevent the possibility of rug pull scams, where startup founders take your money and disappear. Plus, it is not very expensive to launch a project on launchpads. Thanks to that, startups don’t need to worry about losing out on too much.
Besides early access to projects, another reason motivating investors to invest in launchpads is the possibility of value appreciation of the native token. If a launchpad, like Polkastarter, becomes very popular among investors, the price of its native token—POLS—will go up. This way, investors will get even higher returns on their investments.
Popular crypto launchpads
Over the past few years, various launchpads have sprung up to support startups. Here are some well-known ones that you can consider:
Launched in October 2020, this launchpad boasts over 200,000 investors. It enables decentralized auctions, thus allowing startups to access high amounts of money. Recently, DeFi-as-a-Service (DaaS) provider Tosdis conducted a successful IDO on Polkastarter. They later tweeted, “We are really delighted to announce that our IDO on Polkastarter is sold out. POLS pool was sold out in [a] record 30 seconds. After fixing some overloading and gas issues, the public pool was sold out in 90 minutes. We are overwhelmed by the support.”
Since its launch in September 2020 to May 2021, the TrustSwap Launchpad has raised over US$20 million in crypto startup funding. In a blog post, the company defined their platform as “a full-service launchpad for new blockchain projects who want to take advantage of the security and trustlessness that smart contracts can offer”. The platform offers media and marketing support to the projects and also provides a SmartLock service—a way to lock up tokens to avoid a rug pull scam.
- Binance Launchpad
Touted as the first successful example of a crypto launchpad, Binance Launchpad came to be in 2019. Besides offering tokens, the platform features aspects of a traditional incubator, as it provides startups with mentorship and marketing. In a blog post, the company dubbed its venture “a full advisory service for projects, which will benefit from our insights and experience”. They noted, “We ensure that the projects can focus their efforts on where it matters: developing their product and increasing adoption.”
Note that, as with any cryptocurrency venture, investing in crypto projects on launchpads is not risk-free. Their business models are heavily reliant on the success or failure of the projects. So, if the value of their projects falls, the value of the native token will, too. Plus, launch pads can be expensive, especially if you want access to the top startups. That said, they are a great way for both startups and investors to collaborate without intermediaries and other restrictions. You do not need to be a venture capitalist to invest, and you do not need to be an experienced startup founder to seek funds. It’s a platform for everybody.
Header Image by Freepik