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Klondike for investors. What are launchpads and why are they in demand?

Klondike for investors. What are launchpads and why are they in demand?

Now investors can participate in crowdsales of promising startups. The projects themselves were able to quickly bring the token to the market, using the liquidity of the leading crypto exchanges – they account for most of the launchpads. There are a lot of different definitions in the field of cryptocurrency, for example, IEO Launchpad, IDO, blockchain and much more. It’s impossible to talk about everything, but we will try our best.

The exchange acts as a guarantor of the transaction for all participants in such crowdfunding. The threshold for entering the market is minimal, and to gain access to investments, it is enough to have an exchange token. By the value of the tokens of the leading trading platforms, one can judge the volume of tokensales that take place on them – over the past year, the coins of the largest cryptocurrency exchanges have shown an increase of more than 1,000%, and the capitalization of decentralized launchpads has exceeded $1 billion.

Klondike for early investors

Thanks to launchpads, tokensales take on a more classic format. But, unlike an IPO, the conditions for gaining access to large amounts of investment are minimal.

Such investment volumes are possible thanks to the largest exchanges, which first launched a new token sale format two years ago:

The first investment round on Binance Launchpad allowed the FetchAI project to raise about $6 million in just over 20 seconds.The first crowdfunding on the Huobi Prime platform ended even faster – in just 7 seconds, 300 million TOP tokens worth more than $500,000 were purchased. By the way, the Huobi exchange became the first platform that provided investors with access to crowdsales on the basis of early participation.

This model allows investors to purchase a project token at a better price, which, after listing on the exchange, can increase several times. Thus, the early investors of the startup TOP Network were able to increase their investments by more than 250% immediately after the token was listed on Huobi Global. The token of another project has risen in price by 1,700% , and the cost of one of the latest NFT coins after listing on the same launchpad has grown by a record 3,800% .

Exchanges also did not stand aside and significantly increased their capitalization by using their own tokens in the crowdfunding process. The value of Huobi Token reached historical records on May 12, rising to $39 – an increase of 650% since the beginning of the year. At the end of the month, the exchange token corrected against the backdrop of a decrease in the capitalization of the crypto market and today it is trading at $10, which is still 240% higher than its value at the beginning of the year.

BNB, the token of the Binance exchange, reached its all-time highs on May 10. Its price rose to $680, showing an impressive gain of 1,689% since the beginning of the year. Today, the BNB rate has also corrected, but does not fall below $300, which is 830% more than six months ago.

How investor launchpads work

Anyone can participate in tokensales on stock exchanges. To do this, you need to select an exchange with a launchpad, register, go through verification and follow the news about the launch of the token sale. They are held on average once every 2-3 months, but can be more often. The exchange announces the launch in advance and offers a subscription – this is when the user checks his eligibility through the presence of exchange tokens and allocates an amount for investment.

Sales in crowdsales sometimes take several minutes, so exchanges use the lottery method to evenly distribute tokens among traders. The system ” who is the first – that and slippers” no longer works, and now everything is decided by fate. Moreover, Binance even limits the number of lottery tickets to a maximum of 5.