In the expanding world of Web3, crypto launchpads are everywhere, even if not everyone knows exactly what these services provide. Primarily, launchpads assist in funding new blockchain projects and allowing investors and potential investors early access to projects (source: CoinTerminal). They are helping to create and market communities, while ensuring safe first steps for new token launches.
What is a Crypto Launchpad?
A crypto launchpad is designed to assist early-stage blockchain initiatives in crowdfunding and showcasing their tokens to potential investors. It can be compared to a startup incubator tailored specifically to the Web3 ecosystem, providing potential investors and new tokens a secure environment to launch.
Who Uses Crypto Launchpads
There are two main groups that utilise launchpads:
Investors and Community Members
Users who want early access to token sales prior to the wider launch for the project. They are often looking for projects that have been vetted and offer passive, lower-risk engagement with attractive entry points.
Project Teams and Founders
Teams looking for funding, promotional and community engagement, and token sale scaffolding. For them, launchpads offer a more sophisticated and wider launch.
Provide Early Investment Opportunities
A launchpad is a service that allows people to invest in a venture that has yet to be released to the public. Accessible and ample investment in early-stage ventures is arguably one of the best benefits a launchpad can provide. This is typically in the form of Initial DEX Offerings (IDO), Initial Game Offerings (IGO), or Initial NFT Offerings (INO).
Support Founders With Fundraising
Fundraising is one of the most challenging aspects of early-stage development and launchpads are here to help. They assist in reaching out to a network of potential investors and offer the funding needed for the development, marketing, auditing and the growth of the project.
Perform Project Vetting and Due Diligence
This is perhaps the most challenging part for investors, and thus the strongest advantage of the launchpad service lies here. Launchpads thoroughly review a project and its members, their technology, the development roadmap and the security, to reduce the chances of a funding scam and subpar launching.
Build and Activate a Community
A community is arguably one of the most important marketing and growth aspects of Web3 and therefore they are important to any Web3 project. Projects need visibility in the beginning to assist with community Ask me Anythings (AMAs) to help get community members to follow and support the launch.
Providing Marketing and Advisors Services Offer
Most launchpads provide sponsorship as well as advice for the founders concerning brand building, token economics, marketing and strategy for the launch. This sponsorship allows teams to learn the knowledge to navigate pitfalls that hinder growth and affect the performance of the token.
Handling the Token Sale Process
Launchpads take care of all the technical behind the scenes, like:
- Sale page creation
- Setting contribution caps/limits
- Whitelist and KYC management if necessary
- Proper token distribution
This enables project teams to concentrate on building rather than the logistics.
Providing Security and Safeguarding of Smart Contracts
With regards to the distribution of tokens, a lack of security can result in severe repercussions. To defend project teams and investors, launchpads typically employ smart contracts that have been tested for efficiency, as well as security measures that ensure a safe distribution of tokens.
Ensure Fair Access for Participants
A tiered system or a random selection system (lottery) are mechanisms that are sometimes employed by launchpads to enable token sales to a larger audience. Such approaches, as opposed to a ‘first-come, first-served’ system, mitigate the risk of system congestion and give equitable access to participants.
Assist with Growth after Launch
A launch is more than just distribution of the tokens. After the launch, many launchpads assist projects with community management, long term strategy to maintain the project and provide support for liquidity and exchange listing.
Are Launchpads Legal in The UK?
Crypto launchpads are legal in the UK, although the specific actions taken on launchpads can be subject to regulation or Realm of the Financial Conduct Authority (FCA) and EU Crypto regulation compliance.
