What Is Crypto Launchpad and How Does It Work?
You must have heard terms like launchpad in the crypto industry. But, what exactly is crypto launchpad and how does it work?
To understand what the crypto launchpad is, a brief history is explained.
It all started in the year 2013 with the idea of using ICO to raise capital for a project.
What is ICO?
ICO is a method that early-stage blockchain-based startup project use to raise capital for their project.
In an ICO, a blockchain startup mint a certain quantity of its own native token and offer them o early investors in exchange for other cryptocurrencies such as Tither ( USDT ), Bitcoin ( BTC ), or Ethereum ( ETH ). This new blockchain startup mint token cannot be traded until the ICO pre-sales is over and the token is listed in an exchange.
In 2013, Omni Layer formerly known as master Coin sold is token through initial coin offering (ICO) and was able to raise $600,000. In 2014, the Ethereum was introduce to investors through ICO and sold each token for 0.311 and was able to raise $15.5 Million to fund it blockchain project. in the same year seven other project token that was sold through ICO was total of $30 million.
Due to the success of ICO, attract scams and fraudulent act deceiving investors with fake promise on the white paper making investors to believe of getting 100x in there token. The promise investors more than 100x once get listed which they never did. These result to many investors losing their money to scammers and fraudster all to make 100x buying their fake token.
These became a concern to the government. ICO was ban and a regulatory measures was put in place to reduce the fraudulent act.
Any token sold via ICO is considered a high-risk investment if an ico fails or turns out to be fraudulent, you lose your money. These is were IEO comes in.
What is IEO?
IEO stand for initial exchange offering.
IEO is an idea that most successful exchanges such as Binance, Bybit, MEXC Global, Gate.io, and TrustSwap used to raise fund for blockchain startup project and provide protections for early investors.
An IEO is also known as crypto launchpad. It is a cryptocurrency fundraising strategy that crypto exchanges used in their platform to help new blockchain-based startup raised capital to fund their project and also help investors to discover crypto promising project before they enter the mainstream.
What is Crypto launchpad?
Launchpad is a platform that crypto exchange provide for blockchain startups in raising funds for new project that want to hit the market. The exchange also provide knowledge and support so that the team can broaden it reach of investors.
Launchpad are usually operated by a crypto exchange. The crypto exchange allow investors to buy into new cryptocurrency projects through the platform before they enter the mainstreams. The token are publicly released with a discounted price for early investors.
Crypto launchpad has gain tremendous attentions.
How Crypto launchpad works?
Launchpad allows investors to buy into new cryptocurrency projects before the project enter the mainstream. They also have a vetting process in place to avoid investors falling into scam and rug-pull, so you can invest with your money very secure. Should the project happened to be fake, the exchange will refund back investors money.
Investors can use crypto launchpad to keep tabs on interesting projects in their early stage.
How do you participate in launchpad?
To participate in launchpad, you must be a register member of the exchange. If you don’t have account with the exchange, you will need to create one. once you have created an account, you will have to find out if the exchange support your jurisdiction.
Next, you have to study the exchange launchpad rules governing the participation of the launchpad project token purchase.
Once you’ve check your jurisdiction, open an account and study the rules, you can purchase the token if you are eligible for participation.
Every exchange have there own set rules to be a launchpad participant. So do your own research before you join in any exchange launchpad.
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