Things to Look for While Choosing a Crypto Launchpad
As crypto or Web3 project founder, it is crucial to secure venture capital to dictate future growth and progress by choosing an ideal crypto launchpad. The recent boom in the crypto economy has given rise to many projects in different sectors like DeFi, NFTs, tokens, digital assets, and cryptocurrencies. However, most projects require ample venture capital to fare well in the crypto market.
In the traditional method of raising funds, startups generally look to friends, family, investors, venture capital institutions, and other financial institutions. However, a crypto launchpad allows anyone to contribute towards a crypto project. It doesn’t matter whether the individual is an investor; as long as they have money, they can easily invest in a crypto project.
What Is a Crypto Launchpad?
A crypto launchpad is a platform that helps crypto projects to raise venture capital for their products, roadmaps, and goals. This is commonly done by buying and holding tokens provided by the crypto and web3 projects. These tokens, after that, offer value and utility that can be used to enjoy the products and services the startups provide.
The ultimate motto for any investor is to undergo an early-stage risk to find the next big crypto project to earn high returns in the future. Ultimately, the success of a crypto project depends on the unique products and services it will offer and how it will help the crypto ecosystem to grow. Hence, a crypto launchpad helps to act as a way for startups to launch their projects and for investors to raise venture capital.
Types of Crypto Launchpads
There are three main types of crypto launchpads. These include Initial Coin Offering (ICO), Initial Exchange Offering (IEO), and Initial Decentralized Exchange Offering (IDO). Each crypto launchpad has its own merits and demerits. However, the IDO launchpad is preferred for crypto projects to raise venture capital. Here’s a short synopsis of how each platform is different from the other:
Initial Coin Offering (ICO) Launchpad
Initial Coin Offering (ICO) was first introduced in 2013 and was the only way for crypto and Web3 projects to raise funds for their goals. It invited investors to buy a limited supply of tokens created by the projects, which could be later traded or exchanged with other cryptos in the future.
However, there was no vetting process for startups to list their projects on the platform. As a result, only a few startups could raise funds for their projects, while many other investors became victims of fraud and scams. Hence, the investors’ interest in the project ultimately decided a startup’s success.
Initial Exchange Offering (IEO) Launchpad
The Initial Exchange Offering (IEO) model was introduced in 2019 as a successor to the ICO model. It hoped to resolve the shortcomings of the IEO model by introducing a vetting process to filter genuine crypto and Web3 projects. It worked on the same principle by inviting investors to buy from a limited supply of tokens.
Here, the investors had to go through AML and KYC to be able to invest in a project of their choice. Offering a sense of transparency and security, it allowed the success of various projects on the platform. However, the problem faced by the IEO model was that it was overseen by a centralized exchange which raised questions regarding favorability and unfair advantage to specific projects over others.
Initial Decentralized Exchange Offering (IDO)
Introduced in the same year as IEO, the Initial Decentralized Exchange Offering (IDO) model is the current successor of the other crypto launchpads. It resolved the final issue with the older models by introducing a decentralized exchange platform for startups to raise funds for their projects.
Hence, an IDO model provides better security, fairness, transparency, liquidity, and availability features for investors and startups. The main benefit of an IDO model is that it offers immediate liquidity post-sale with the help of a liquidity pool that has caught the attention of many investors.
Why Should You Choose a Crypto Launchpad?
Compared to its predecessors, the IDO launchpad offers a range of benefits. Due to its strict vetting process, it becomes near impossible for fraudsters and scammers to launch their projects on the platform. It also has the advantage of immediate liquidity post-sale, which isn’t available in ICO and IEO.
However, the most crucial benefit is that the platform doesn’t operate under a central authority. It is a decentralized exchange platform that offers fairness and transparency to crypto projects. Hence, it is the most preferred crypto launchpad among startups.
Benefits of a Crypto Launchpad
Currently, there are a number of IDO launchpads available for crypto projects. Although they follow the same principles, they may differ in terms of functionality and benefits. However, most of these benefits become similar for the most part. Let’s take a closer look at the benefits of an IDO launchpad in detail:
Most IDO launchpads are available readily and it takes little effort to get a crypto project hosted on the platform. As long as your project has good potential and data to back up its claims, then you don’t have to worry about anything. All IDO launchpads follow a degree of scrutiny when it comes to accepting applications from crypto projects. Once your project is accepted, it will become available for investors, financial institutions, and the common people to raise venture capital.
In an ICO launchpad, all crypto projects are hosted on the platform under a central authority. Naturally, it can bring about an unfairness in the way a project is vetted to be accepted. To back this claim, most scams and frauds have happened under the ICO model. Comparatively, IDO launchpads do not have a centralized authority and give equal opportunity to each crypto project. In the end, the success of a project will depend on its quality of services and future growth.
With the lack of a central authority, IDO launchpads offer a great degree of transparency. Whether you are a startup, investor, or neither of the two, you can still see the progress of crypto projects on the platform. This helps to invite future investors who may be interested in the project after seeing its growth over time. Hence, it also provides a better chance for successful fundraising.
How to Choose the Right Crypto Launchpad?
Once you’ve made progress with building a credible crypto project, the next step is to choose the right crypto launchpad. As mentioned earlier, there are many IDO launchpads to launch your crypto project. Each differs in terms of functionality and the degree of support they are willing to provide. You can check out our list of Top 10 IDO Platforms to Launch Your Tokens for a quick analysis. Here are some key factors you need to consider while choosing your crypto launchpad:
Some IDO launchpads are easier to get into when compared to others. The difference in vetting process depends on what type of crypto projects they mostly support on their platforms. Hence, you need to do a quick research on the same. This will help you decide which IDO launchpad will help raise funds in an efficient way.
Crypto Launchpad Benefits
Various IDO launchpads offer further benefits in the form of post-launch services. These include marketing support, data analytics, and business intelligence to help support your crypto project. Do not forget to research past projects they have already helped and if they will provide additional tools and resources whenever needed.
If your crypto project gets accepted by an IDO launchpad, it already signifies that they have trust and confidence in your project. As a result, some IDO launchpads ensure that they provide further benefits to ensure the project’s success. This is provided in the form of casting a spotlight on your project to ensure that it reaches the maximum number of investors on the platform for secure fundraising.
Multiple Blockchain Support
To maximize the success of your startup fundraising, it is important to consider that investors may exist in more than one blockchain network. Hence, it will be an additional benefit if the IDO launchpad you choose has multiple blockchain support. This will allow your project to be open for investment in other blockchain platforms as well.
For any business, it is important to consider the fees of launching a startup on a platform. Similarly, different IDO launchpads have different fee structures. This can be in the form of gas fees, percentage of tokens, or as a mix of multiple components. Eventually, choosing an IDO launchpad with low fees and maximum outreach to its investors is advisable. This will help to secure major venture capital without incurring many costs.
The best way to choose the right crypto launchpad for your crypto project is to weigh the pros and cons of each platform. Do not forget to take your project itself into consideration. The success of your project will depend on the platform and its vast network of investors. A good way to judge an IDO launchpad is by researching about their past projects and how it has performed under the platform’s help and support. Hence, carrying out extensive research is important even in choosing the right crypto launchpad.
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