People who were there in 2017 likely recall the initial coin offering (ICO) mania, which saw a plethora of new projects arise, many of which yielded astonishing returns for investors in a matter of weeks or months.
Though many ICO-funded initiatives turned out to be failures, a small proportion grew and developed into the present heavyweight blockchain platforms, together with Ether (ETH), Filecoin (FIL), Polkadot (DOT), and Cardano (ADA) — all of which are among the prime 30 largest crypto belongings by market capitalization.
The average ICO yielded a phenomenal 1,320% return for short-term investors, making them one of the most enticing funding possibilities of late despite their generally subpar long-term performance.
However, there was a substantial disadvantage. Due to the sheer quantity of ICOs and concurrent euphoria, not solely was it extraordinarily troublesome to precisely gauge the power of a venture, however securing a slot in prime tier ICOs was nearly inconceivable for common customers, typically requiring pure luck, connections, or a sizeable funding to secure a slot.
The beginning of modifications
This began to change in 2019 with the introduction of the Binance Launchpad, which for the first time provided a way that opened early-stage projects to the masses, or more specifically, anyone who possessed Binance’s native utility token (BNB).
Although Binance Launchpad arguably sparked the democratization of the cryptocurrency crowdfunding market, it has become steadily less accessible over time. Now, clients must carry exorbitantly large amounts of BNB to secure an affordable size allotment from its initial DEX options (IDOs) – making it anything but fair access.
To democratize access to the next generation of crypto projects and protocols, a plethora of platforms have emerged over the past year, all with the same goal in mind. Simply referred to as launchpads, these platforms feature a hand-selected and curated list of new projects that are made available to their users.
The vast majority of this year’s top-performing properties have completed the final round of their token sale via a number of launchpads. This includes Venture Seed, PulsePad, WagyuSwap, and My Neighbor Alice, each of which achieved a maximum return on investment (ROI) of over 30,000%.
Depending on the features of each platform, democratized launchpads provide access to new opportunities to tens of thousands or hundreds of thousands of consumers, each of whom either has a chance to participate or a guaranteed allotment. Since these projects are manually verified, they aid in reducing fraud, cash grabs, and duds.
However, the rapid growth of these platforms has begun to negatively impact their users, whose allocations are diminishing as the number of users grows. Many decentralized launchpads are also beginning to raise their entry requirements, with some launchpads asking a minimum investment of several thousand dollars.
The launchpad industry
Currently, the launchpad market is highly populated with numerous platforms, many of which target projects starting on particular blockchains or industries/niches. Although there are normally a variety of platforms that provide launchpad services for each blockchain, a few few have evolved to dominate their individual chains, absorbing the majority of high-quality projects.
DAO Maker now leads the Ethereum project landscape, having established such heavyweights as XCAD Community, Opulous, Orion Cash, GameFi, and DeRace in recent months. Due to recent achievements such as NFTLaunch, BitOrbit, WagyuSwap, and ADAPad, BSCPad is commonly regarded as the launchpad of choice for Binance Good Chain initiatives.
Other emerging blockchains have their own notable launchpads, such as Solanium, a Solana-centric launchpad that hosted the wildly successful Venture SEED, Cryowar, and DeFi Land play-to-earn initiatives; and Avalaunch, which has launched a variety of coveted properties within the Avalanche ecosystem.
BlueZilla, on the other hand, has cast a wide net by developing and operating launchpads across a variety of blockchains, including Cardano (ADAPad), PulseChain (PulsePad), and KuCoin Group Chain (KuCoinPad) (KCCPad). This strategy appears to democratize access to the efforts populating these new chains.
Launchpads are one of the main reasons why Avalanche, Solana, Terra, and many other modern blockchains have seen such a Cambrian explosion of innovation in recent months, as they provide a straightforward route for projects to not only secure funding and distribute their tokens, but also bootstrap their initial user base.
Some are now sufficiently substantial to be officially backed and endorsed by the native blockchain they support, such as VelasPad, which teamed with the AI-powered Solana fork known as Velas.
Launchpads and the blockchain house
Launchpads have become a core service in the blockchain ecosystem by providing a stable starting point for new projects, and the most popular launchpads can have tens of thousands of users.
While launchpads have effectively democratized access to potential funding opportunities, not all launchpads are created equal, and those on the less profitable end of the spectrum may struggle to secure high-quality projects in the face of increasing competition.
Undoubtedly, there are currently a vast number of launchpads, but a very small number of promising projects. This has resulted in heated competition among launchpads, as each strives to secure the most successful initiatives for their individual communities. However, just the most effective launchpads have the group and observe file required to be selective with their efforts, which often leaves much less established platforms with the lowest high quality initiatives.
As we progress deeper and deeper into a bull market, the typical hole is prone to widen, which may represent a difficulty for far less knowledgeable merchants and traders, who may incur losses as they entrust their cash to an expanding variety of subpar launchpads.
Kalani Moe is the director of ecosystem development at Velas, a fork of Solana’s decentralized smart contract platform. As a serial entrepreneur and an early pioneer in the blockchain space, Moe founded the Divi Venture and helped CoinPayments become the world’s leading cryptocurrency payment processor while serving as its former creative director.