Launchpads and launch pools are both great options for blockchain startups that want to hold a public token offering and secure decentralized funding. As a project founder, it’s important to understand the difference between launchpads and launch pools so that you can take advantage of both scenarios.
Launchpads vs. launch pools
There are many similarities between launchpads and launch pools. Just like launchpads, launch pools carefully select up-and-coming projects that have a strong team and a promising growth trajectory. Most launchpads and launch pools thoroughly vet potential launches and also require investors to complete a KYC process before participating.
This is where the different platforms start to diverge. Launch pools take some of the best aspects of crypto launchpads and make them more scalable and easy to use. While launchpads typically spotlight a single project at a time, launch pools are able to host several launches at once. Since launch pools can also have a lower minimum investment threshold, users can easily gain exposure to a more diverse range of new tokens.
There are also key differences in the way that launchpads and launch pools distribute public sale tokens. Instead of focusing on lottery sales with tier-based ticket allocations, launch pools can also offer direct access through other mechanisms such as staking.
Key advantages of launch pools
Why do platforms offer both a launchpad and a launch pool? Let’s take a look at three reasons why launch pools have emerged as a viable alternative to launchpads.
Lower barriers to entry
Launch pools typically reduce the entry barriers for both projects and investors. For projects, it’s generally more straightforward to get hosted on a launch pool than a launchpad. For investors, launch pools only require users to start staking in the pool or complete a simple whitelisting procedure instead of qualifying for staking snapshots like most launchpads. Launch pools can also have a lower minimum investment requirement, which helps even more entry-level investors get in on the action.
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More opportunities for growth
With launch pools, a single platform can host multiple launches at the same time. This way, it’s easier for investors to get early exposure to a range of growing projects and diversify their portfolios with new tokens at attractive entry points. It’s also a great opportunity for new users to practice doing their own research by performing due diligence on each project in the launch pool and analyzing which ones to support. Hosting more launches is also useful if you are a project founder since it gives you additional chances to hold your public sale.
Less post-launch uncertainty
Finally, launch pools are less subject to the luck of the draw. Liquidity pools have become a key part of DeFi, and many launch pools leverage a version of this structure instead of the lottery format used by most launchpads. While lotteries can be exciting, this aspect might be a turn-off for some investors who want to minimize their risk and uncertainty. Some launch pools even allow users to keep their initial investment and earn the new tokens as a bonus, which may be appealing to smaller investors who want to hold onto all of their existing assets.
How to navigate your launch successfully
While launchpads have historically received more attention, launch pools are also a valuable tool for projects that don’t have access to a high-quality launchpad but still deserve to make their place in the ecosystem. No matter where your startup is launching, every blockchain business needs a solid game plan to make the most of their public sale and help ensure long-term success.
Connect with the ecosystem
Before launching, Web3 startups should focus on tapping into the ecosystem for incubation and support. Forming partnerships with more established projects will help you learn from their experience and navigate your launch with confidence. This type of cooperation can also transfer trust from the broader community to your project and generate buzz around your token.
Put your treasury to work
New launches offer a huge opportunity for startups to make the most out of their funds. Before you raise any money, it helps to have a strategy in place about how your project will earn passive income and manage risk during the bootstrapping phase. While keeping some stablecoins in your treasury helps reduce volatility, a great way to potentially increase your project’s upside is through diversifying your investments and allocating capital to other strategies such as staking or providing liquidity.
Keep up the momentum
After launch, make sure to keep the momentum going for your community. It’s important to deliver on your roadmap with urgency and provide long-term incentives to your supporters. Focus on compelling token utilities that generate real value over time. And if you lock up some of the tokens that are distributed from your public sale, make sure to give investors plenty of reasons to stick around after the unlock.
Get ready for the next wave of adoption
Both launchpads and launch pools are important tools for growing the Web3 ecosystem. These platforms will likely play a vital role in the next wave of blockchain adoption by delivering new use cases that connect talented builders with passionate investors. Overall, launching innovative projects is one of the best ways to accelerate Web3 growth — especially once the bull market returns.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
Wolfgang Rückerl is the CEO of Istari Vision and Entity.global. His expertise is in Web3 startups and staking.
This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.