Over the past few years, cryptocurrencies’ popularity has grown significantly. With bitcoin as the foundation, more than 20,000 cryptocurrencies have now arisen. It is amazing how much the sector has grown in such a short time, and early adopters have benefited from it.
The rise of cryptocurrencies has also drawn a large number of investors, spurring even further advancements in the sector. The adoption of cryptocurrencies and other decentralized initiatives is currently rising due to these breakthroughs.
The emergence of crypto launchpad platforms is one innovation that speeds up this process and benefits enthusiastic enthusiasts and would-be business owners.
II. Crypto launchpad
The venues for discovering fresh and cutting-edge cryptocurrency ideas are referred to as crypto launchpads or crypto incubators. Early investors and creative entrepreneurs are the industry’s beating heart. It was just a matter of time before a platform would develop to enable investors to locate new companies, as those who adopted successful projects first have benefited the most.
Crypto launchpads are platforms that serve the purpose of hosting various blockchain- and crypto-based initiatives in order to generate enough money while also providing early access advantages to investors, such as token sales at discounted pricing. Before the initiative is released to the public, investing in it early on ensures investors a lower cost of entry.
The infrastructure required to offer security and transparency for project creators and investors is built up for projects on crypto launchpads. Before a project is launched, it must pass a thorough vetting process. Launchpads also employ a thorough KYC (Know Your Customer) process through a third party for user authentication.
Launchpad enables founders to connect with devoted groups of investors and cryptocurrency enthusiasts that can aid in the meaningful growth of their ideas.
III. How launchpads benefit users
Launchpads are beneficial to both inventors and investors. Investors now have access to the very first cutting-edge new cryptocurrency projects. The ability to purchase project tokens at a discounted price is the main advantage of investing in launchpad initiatives. Purchasing project tokens early in their life cycle can be a very profitable investment because their value can soar after they go public.
Investors do not need to worry about frauds because cryptocurrency launchpads are extremely safe and make sure that the project creators are real people and do not vanish.
IV. Fundraising methods for crypto projects
Following the discussion on launching platforms will be the different methods that crypto projects can use to connect with customers and raise funds.
A way to raise money with cryptocurrency is through an initial coin offering (ICO). For projects that have not yet fully established a blockchain platform, product, or service, this approach is typical. Bitcoin and Ethereum are the most common payment methods. The coin gains value as a result of investors taking part in the ICO. Or to put it another way, as the initial investors in that cryptocurrency initiative, they anticipate large returns.
- Easy and cheap to set up an ICO project
- New investors can make small investments
- More liquidity in little time
- Investors have total control over their financial resources
- Airdrops, private and public sales, and bounty programs can all be used to raise money
- Low security
- Unfit for long-term investments
An IEO (Initial Exchange Offering) is a fundraising event managed by an exchange. Contrary to Initial Coin Offering (ICO) where the project team will conduct its own fundraising, in IEO, fundraising will be conducted on the fundraising platform of a famous exchange, such as Binance Launchpad, Huobi Prime… where users can buy tokens with coins directly from their exchange wallets.
- High security: all exchanges are KYC/AML verified
- Direct participation from investors
- The level of regulations lowers the risk of fraudulent
- Investors buy directly to account instead of smart contracts
- High costs of funding and difficult set-ups
- Lower liquidity
- Investors don’t have much control over exchanges.
IDO (Initial DEX Offering) means the initial issuance of coins on a decentralized exchange (DEX – Decentralized Exchange). The IDO initiative was first proposed by the Raven Protocol project team.
- Authorization not required
- Instant Liquidity
- Instant Transactions
- Less costly
- Easy to use
- Lack of administrative mechanism
- Immediate fluctuations in price caused by large transactions
- No data of investors
To become a crypto investor, users should first equip themselves with knowledge on where and how to make their investments, what method would benefit them depending on their intentions. Launchpads, ICO, IEO, IDO are all different ways for projects to approach their potential customers. While launchpads are more of a convenient technological platform that are created to assure investors of projects’ credibility, ICO, IDO, IEO are not a platform. They are tools that crypto projects have to decide on how to use in order to maximize funds raised, as well as gaining investors’ interest and trust.