What Is a Crypto Launchpad?
What is a crypto launchpad? Crypto launchpad is a platform where the primary sale of tokens is held. This procedure is called IDO (Initial Dex Offering). It is the process of initial public offering of tokens of new crypto projects and launching trading of tokens on decentralized exchanges. The process is a bit like an Initial Public Offering (IPO), when a company first issues its shares into circulation on the stock market.
Why Do We Need Launchpads Crypto?
The secret to success in chasing the emerging cryptocurrency market is that investors who want to invest in a promising project in the early stages make big profits. While some investors may feel that getting involved too early can be a riskier move, recognizing solid businesses early on increases their chances of making higher returns.
However, the tricky part of this particular investment strategy is identifying which early-stage projects are promising and worth the risk. Is it possible to notice something really worthy before the project becomes mainstream? Thanks to the best crypto gaming launchpads, this is possible.
Launchpads for cryptocurrency blockchain-based projects are the safest way for both experienced and novice investors to make a profit. Such platforms literally filter out first-class projects and show them to interested investors who are ready to invest in the early stages of development.
As an early adopter, the "pioneer", the investor can finance the project at the presale stage and benefit from price increases as the product develops. No one wants to miss out on what even in theory such an opportunity can offer.
Crypto launchpads are like a breath of fresh air for the world of cryptocurrencies and investments. They offer equal investment opportunities for anyone and everyone: previously, this was only possible for wealthy investors who helped fund thousands of crypto projects.
This is the main function of crypto launchpads: to make investments easier, faster and more reliable. They allow you to make crypto investing more accessible, as well as help accelerate the development of as many crypto projects as possible.
How to Make Money on IDO?
Earnings on IDO mean selling several times more expensive tokens that you purchased at the IDO stage. After the start of token sales on the exchange, its price, as a rule, is many times higher than the initial one.
For example, a new project on one of the blockchain platforms is launched, it wants to receive investments, and decides to allocate 10% of the tokens from the total number to IDO. 10% of the total is 1,000,000 tokens. The project, for example, sets the price for IDO at $0.1 per token, thus it plans to raise $100,000.
If a project is included into a top-end crypto launchpad list, it gets a lot of attention right away. The number of those who want to buy a token at a price of $0.1 is dozens or even hundreds of times higher than those who end up buying them. There is a rush, a shortage.
Literally immediately after IDO, the token is listed on the exchange, and everyone who has not received an allocation through IDO has the opportunity to buy this token on the exchange, but at a market price.
But the hype is so great that the price starts to rise higher and higher, as people know that the token at the IDO stage was sold at $0.1, and now it costs $0.5 and grows further. The effect of the crowd and artificially created excitement pumps the price. Then the excitement subsides, and the price stops somewhere in the middle, but, as a rule, those who manage to buy at the IDO stage remain in pluses. Of course, we can talk about guaranteed profits only in the case of projects that come out on top launchpads.
What Role Do Crypto Launchpads Play in the IDO Process?
There are 2 key phases in IDO:
- Sale of tokens to a limited number of people who have been included in the whitelist (whitelist is a list of approved accounts for participation in IDO) of the project at a fixed price. Such a sale is usually carried out through launchpads. Solid projects always have multiple oversubscriptions, and getting into the whitelist is played in the form of a lottery. The amount of tokens that is allocated to one participant is called an “allocation” and, as a rule, is in the range of $100 – $1000 per person;
- Placement of startups’ tokens in the form of a liquidity pool on decentralized exchanges and launch of trading;
There is a whole line of people who want to buy tokens of top projects. People who are not included in the whitelist or who want to buy more project tokens can do so on the DEX exchange immediately after the tokens are placed. In the liquidity pool, tokens are initially set at the IDO price, therefore, in promising projects, people buy coins very quickly and they rapidly rise in price. Often this is done by special bots, and sometimes the project teams themselves buy back their tokens, since tokens go to IDO, as a rule, at a very good price.
Also, IDO is always accompanied by a big marketing campaign. As a result, the price of tokens on the exchange in the first minutes after the placement rises sharply. Interestingly, at the time of launch, the price cannot even theoretically fall, because no one on the market has project tokens and, accordingly, no one can sell them, they can only buy them. And the price only moves up. In the worst case, no one just buys tokens, but this is a failed IDO.
As a rule, IDO participants who purchased directly through the launchpad receive their tokens after a certain time (minutes or hours) after the launch of the liquidity pool and the start of trading on the exchange. At this moment, sharp price drops begin, as buyers want to fix their profits and start selling tokens on the exchange.
Further, as a rule, there is a local bottom and a price rebound, and after that there is no longer a single “template” and everything depends on the quality of the project and the popularity of IDO. There are examples of projects that only continue to grow in price after IDO, and there are also those that may never return to the price level after IDO or even go negative.
How to Participate in an IDO on a Crypto Launchpad?
Dozens of IDOs pass daily on the network, the vast majority are complete slag or scam. How do you know what is the best IDO launchpad and which projects are worth investing capital in? Ideally, of course, you need to conduct your own study of the project, do some kind of analysis and make a decision based on it. But in reality, this is impossible, because of the huge flow of information (if you do not do this full-time).There are two important rules for deciding whether to participate.
There are top crypto launchpads on which top projects come out. If the project comes out on a good platform, you join it;
If the project has top investors, you can also join it.
And even if you are going to join a top project, it is very important to study the tokenomics of the project. At a minimum, you need to know if there is a lockup (token freeze period) and what kind of vesting (token unfreeze schedule), since there are IDOs where you will receive tokens only 1-2 years after participation.
There are three main ways to participate in IDO on crypto launchpads.
1. Participate in the drawing of a spot in the whitelist.
This method is very popular because it is available to most. You don’t really need any investments, you just need to fill out simple forms and hope for good luck. In more or less serious projects, the probability of getting into the whitelist in this way is below 1%. Nevertheless, this method is not becoming less popular, and in general, from the point of view of probability theory, you will be lucky sooner or later.
To take part in the drawing of a place in the whitelist, you need to hold (keep on your wallet or in a special storage) launchpad tokens. Also, projects often raffle off some of the places in the whitelist between community members. Usually 50 – 100 places are raffled off with an allocation of $100 per person. These are the so-called community rounds. As a rule, to participate, you need to subscribe to the social networks of the project, make a repost and fill out the form. Sometimes there are Q&A sessions or creative contests, you can also participate in them if you have time. The chances of winning in the community round are much less than with a token hold, but it's completely free.
The optimal participation strategy for each person is individual and depends on many factors, such as the size of the available deposit, risk tolerance, willingness to freeze funds for 1–2 years, free time, etc. The strategy may differ, but you can focus on the algorithm above as some base variant.
2. Buy and store launchpad tokens
Using this method, it is much easier to get into the whitelist, but you need to have a fairly large capital. As a rule, you need to hold (buy and store in your wallet) launchpad tokens. This is how launchpads add utility to their token. But you need to understand that the usefulness of the token of any launchpad depends on the profit that this launchpad brings.
As a rule, launchpad tokens are held by those who are interested in a guaranteed place in the IDO. If it happens that projects that are launched on this launchpad stop making a profit, then token holders will start getting rid of them and the price of this token may drop sharply.
This method increases your chances significantly, but the minimum entry threshold for most projects is $1,000 or more. Moreover, you can’t count on a guaranteed place with $ 1000, you will most likely also participate in the lottery, but the competition here is certainly not as big as in the 1st method. If you want to have an allocation guaranteed, you need to hold tokens for a very large amount, from $10,000 in launchpad platform tokens.
3. Buy a spot on the whitelist
The third way is to buy a guaranteed place in the whitelist. This is an unofficial way, but effective. The main thing is not to fall into the hands of scammers. You give the address of your wallet, pay for a place in the whitelist of the project you are interested in, and your wallet is guaranteed to be included in the whitelist, then you just need to redeem the tokens, wait for the listing, sell them and take profits.