Decentralized Applications have been exploding. Even with the all-time crash that occurred in mid-May of this year, it hasn’t stopped hundreds of Dapps from being launched throughout the crypto space. If anything, it has reinvigorated it. So this then begs the question: how can I know when a new project is being launched? Do I need to have certain connections, and how do I know if this project is legit?
Well, that’s where crypto launchpads come in, a one-stop place where new projects and potential investors can meet up, interact and provide the necessary funds in exchange for their native token for that eventual parabolic run.
This crypto launchpad review article will take a look at some of the best crypto launchpads, how do they evaluate projects, what their strengths and weaknesses are, and why they are becoming increasingly critical.
DeFi Launchpads: A New Innovative Way to New Projects
The world of decentralized finance has contributed to the emergence of a new model of raising funds IDO( Initial Dex Offering), replacing outdated and easily scamming models like ICO and IEO. At the same time, a new generation of launch pads came to the market, equipped with a more user-friendly interface, decentralized functions, and more opportunities for both users and developers.
To date, according to CoinGecko, the market capitalization of Launchpads (Launchpad) is about $2.17 billion, with a trading volume of more than $300 million. The editors of BeInCrypto, with the participation of Guy Yampolsky from Yafo Business Development, have compiled a rating of the most promising launchpads.
Some of the key advantages of DeFi launch pads are: Democratizing access to cryptocurrency investments, ensuring that more people have early access to them, a simplified mechanism for adding crypto projects for developers, low listing costs, forming links between the platform and the project, and providing liquidity directly on DEX exchanges.
The interest in new launchpads has also been fueled by the fact that thanks to the preservation of the principles of decentralization, they provide fair, fast, and transparent trade. Each platform strives to eliminate fraud as much as possible. The wound is still fresh for many who experienced the crazy ICO hype era during 2017-2018, when the cryptocurrency community suffered losses due to malicious players. It has been estimated that around 800 tokens issued during that period turned out to be empty tokens.
The main problem of the ICO was that the interests of developers and investors diverged. The products were raw, had no value, and did not solve real problems. It was just a crypto-hype for the sake of money that was invested by people who did not understand anything about it.
IDOs in Their Most Popular Form: How They Differ From IEOs?
Nowadays, initial DEX offerings are particularly similar to initial exchange offerings (IEOs), with a few key differences.
With an IEO, it was the exchange examining the project and conducting the token sale. With an IDO – it’s a third-party platform that examines the exchange while the token sale itself happens in a somewhat decentralized fashion.
Essentially, anyone can raise funds through an IDO with a third-party launchpad platform. All they’d have to do is open a pool. At least in theory
The way this works is fairly simple. A project goes to a launchpad, and if they meet their requirements, they are chosen to conduct an IDO. The process itself might vary from one launchpad to another, but the concept is always the same.
There is a pool where users can buy “IOUs” of the token that the project wants to launch. An IOU is an acknowledgment of debt. In other words, investors pay for their tokens in advance but receive them upon the Token Generation Event (TGE), which usually happens very shortly after the IDO itself (typically within a few hours).
Once the IDO is successfully concluded and the TGE takes place, the token is immediately listed for trading on a decentralized exchange. An example would be Uniswap, as this DEX is the predominant number of projects that are still built on Ethereum, and their tokens are based on the ERC20 protocol standard. However, other blockchains are also growing in popularity, including Solana, Polkadot, and the Binance Smart Chain (BSC). This is why some projects prefer to have their tokens launched on them to avoid the high network fees on Ethereum. In this case, the token would be listed on native exchanges such as BSC’s PancakeSwap, for example.
With this said, we can already see some differences and some similarities between ICOs and IEOs. Here’s a comprehensive comparative table:
Best Crypto Launchpad Reviews
1. Polkastarter
Polkastarter is a DEX platform for cross-chain token pool interaction, developed on the basis of Polkadot’s own blockchain ecosystem. The protocol allows new blockchain projects to raise funds in a decentralized, interoperable environment.
Crowdfunding in Polkastarter is provided in different pools. There are private pools, to raise funds from certain investors. Then there are password-protected pools for more secure private fundraising.
In addition, you can hold auctions for your tokens in the pools. Holders of the POLS token can not only trade it but also use it for staking, paying commissions in cross-chain pools, and creating new pools of liquidity. Token holders manage the DAO protocol and can vote for or against making changes to the project. Thanks to the use of the Polkadot blockchain, the launchpad is compatible with various decentralized services and blockchains.
At the time of writing, the capitalization of the POLS token, according to CoinGecko, is more than $92 million. It is listed on: Uniswap, Gate.io, Huobi Global, OKEx, Binance, to name a few.
2. TrustSwap
TrustSwap is a multi-feature platform that started its smart cross-chain platform to solve recurring problems such as cross token swap, split payment, and more. It has been considered as the Swiss Army knife of crypto projects, mostly because it is more than merely a crypto launchpad project. The platform has been instrumental in the development of team locks for token launches and has created a committed community around the TrustSwap ecosystem. Holders of the SWAP token can gain early access to token launches by staking a minimum of 3,000 SWAP.
The motivation behind TrustSwap was to create a way to prevent immediate sell-offs and rug-pulls after token launches. TrustSwap has devised several innovative methods to avoid such events through various token lock-ups. For example, team tokens can be locked for a set period or only released after reaching a set milestone. This way, if a project fails to meet its goals, investors won’t lose out on their money. TrustSwap had initially been offering these services to other projects after launching in early 2020. However, later that year TrustSwap launched its own launchpad. Previous tokens to use TrustSwap Launchpad include Glitch Finance (GLCH) and Yield App (YLD).
The TrustSwap Launchpad is developing a sleek multi-purpose platform that caters to investors of all types. Currently, TrustSwap has a circulating supply of more than 88 million out of a max supply of 99.9 million tokens. At the time of writing, the SWAP token has a market cap of around $88.4 million.
3. BSCPad
BSCPad is the first-ever and biggest IDO Decentralized platform based on Binance Smart Chain. DeFi continues its dominance, but due to high gas fees on the Ethereum network, most new projects started deploying their Dapps on BSC as the latter offer higher scalability and cheaper transaction fees. BSCPad has great user interference and a fair token allocation system that is gaining attention from users.
BSCPad has two allocation rounds. Round 1 is for BSCPAD token holders, and round 2 is for non BSCPAD token holders. Round 2 participant will be getting their allocation with the first-come-first-serve rule. However, in Round 1, BSCPAD holders have different tiers. The first tier is Bronze (1000 tokens) and ends with Blue Diamond (75,000 tokens). Each tier offers greater benefits and allocations as more tokens are staked. BSCview was the first project hosted by BSCPad, and then it also hosted other projects such as Blind Boxes, Cook Protocol, AIOZ, and 8PAY.
4. Thorstarter
Thorstarter is a decentralized launchpad that offers cross-chain liquidity to long-tail crypto assets.
The cross-chain liquidity ensures that the fundraising process is fair and transparent. Thorstarter issues liquidity grants to early-stage crypto projects and helps them launch via IDOs. The projects can then swap the THORChain-pooled assets with their own tokens.
Investors can access liquidity from other blockchains without having to use synthetic assets.
Thorstarter’s XRUNE token is a hyped liquid settlement currency, just like RUNE. XRUNE is always paired with another asset to facilitate cross-chain swapping using the native RUNE-XRUNE on THORChain.
Projects selected for Thorstarter approval will have to go through a grant process governed by a community DAO. The grant has to be signed by The Council of Asgard, which consists of 9 members.
New projects launching on Thorstarter use the company’s xIDO model, which allows projects greater flexibility. They can choose from several different launch models and optimize for a token distribution that suits their project and community.
The launch methods are Dynamic Price Action, Pool Share, Fixed Price Crowdsale, Limited supply vs Elastic Supply, Open vs Gated Tiers, and Minimum Purchase vs Max Purchase.
5. DAO Maker Pad
DAO Maker, not to be confused with Maker DAO, is popular lending and borrowing decentralized application built on the Ethereum blockchain. In 2019, the DAO Maker project launched its launchpad, allowing upcoming projects to sell ERC-20 tokens to interested investors.
Dao Maker leverages the power of Social Mining and omnipresent exposure to help projects acquire a community and then uses the project’s token to convert the community into value-adding and value-assessing members of a DAO.
To get an allocation for token sales, users must lock the project’s native token, DAO, in a vault on their account.
The token sale process could happen in two ways, including Strong Holder Offering (SHO) and SEED (special seed rounds through which investors can increase their allocations).
SHO targets all holders of the DAO token, while SEED seeks to allow more people to participate in the fundraising.
To date, several projects have reportedly raised a combined $40M on the Maker DAO pad. Notable ones include Elrond Network, My Neighbor Alice (ALICE), Orion Protocol (ORION).
6. Solstarter
Solstarter is a new launchpad in the IDO market, and it resides on the Solana blockchain. The IDO Solstarter model consists of four levels: Moon, Planet, Red Giant, and Supernova, within which internal SOS tokens will be distributed. 7% for 5000 SOS staked, 15%for 9000 SOS staked, 28% for 16000 SOS staked, and 50% or 25000 SOS staked for each pool, respectively.
The future development of the project will be controlled by the DAO community, making the fundraising process democratic. For broader integration and support of the Solana blockchain, the team plans to add OTC Trusted Swap functionality, which will allow institutional and private investors to make escrow transactions on the network.
The project is already supported by large companies, including Delphi Digital, Hashed, Spartan Group, Mechanism Capital, and Definition Capital.
7. Binance Launchpad
Binance Launchpad is part of an ecosystem of services for cryptocurrency projects offered by the centralized exchange (CEX) Binance. Services include everything from early-stage advisory and funding to marketing and launching token issuance events. Binance offers an initial exchange offering (IEO) as an improved version of the previously hyped initial coin offering (ICO) model in 2017. However, this model comes with some big improvements, drastically reducing the risk for investors.
All projects must go through a thorough team and project background check during the application process. Another key thing considered by Binance for a successful launchpad project is that the project is at a relatively mature stage of development alongside having key fundamentals in place for sustained growth.
Also, the success of Binance Launchpad has been followed by a rapid price increase of the native Binance Coin (BNB). At the time of writing, BNB has a circulating supply of 153.4 million out of 169.4 million, with a market cap of $52 billion. Currently, BNB is trading at a price of approximately $340.69 after firmly securing its place in the top 10 largest cryptocurrencies in recent days, according to CoinGecko.
8. PancakeSwap IFO
PancakeSwap is a decentralized exchange platform built on the Binance Smart Chain (BSC). The project primarily allows trading of tokens and liquidity mining. However, it also has a launchpad platform to help BSC-based startups raise funds for their products.
To participate in a token sale or initial farm offering (IFO), users have to provide liquidity to the CAKE-BNB pool. This is done by purchasing CAKE tokens and BNB tokens and then adding them to a liquidity pool on Pancakeswap.
Users receive liquidity pool tokens (LPs) as per their contribution to the entire pool and then use these tokens to participate when a token sale is live. Upon completion of the token sale, the amount allocated to the user is deducted and the remaining LP tokens refunded as soon as they claim the new tokens allocated to them.
Projects that have completed a token sale on Pancakeswap’s IFO include Horizon Protocol (HZN), Helmet Insure (HELMET).
Conclusion
The crypto launchpads mentioned in this article are only the tip of the iceberg. There are many others, but these are the most prominent given the popularity of the blockchain where they reside and the DEX themselves.
As mentioned, each has its own strengths and weaknesses, so it will go up to every individual investor to know which launchpad is the most compatible in terms of security, what type of projects they are approving, how much do their tiers cost, if they are community-run, or are they centralized, is that an issue for you, etc.
This is why every investor must do their own research about each launchpad and each project that is being listed on it. No matter how thorough the team of a launchpad analyzes each project, there is no guarantee that the project will succeed.
