What is a crypto launchpad?

What is a crypto launchpad?

A crypto launchpad is a platform that helps new projects raise funds by selling their utility tokens, governance tokens or NFTs directly to investors. Think of it like Kickstarter—but specifically for crypto projects.

The crypto launchpads make it easy for investors to discover promising Web3 startups early before tokens are listed on major exchanges. At the same time, startups get quick access to funding without relying on traditional venture capital.

Popular launchpads include Binance Launchpad, which launched projects like BitTorrent, and CoinList, famous for introducing Solana and Filecoin. During crypto market booms, some launchpad projects have delivered huge returns—sometimes up to 100 times the original investment.

What are common types of crypto launchpads?

Crypto launchpads mainly use three models to distribute token allocations to investors:

• Stake-to-access model
• First-Come, First-Served (FCFS) model

1. Stake-to-access model

In this model, investors need to stake (lock up) a certain amount of the launchpad’s tokens to qualify for a token allocation. The more tokens you stake, the larger your potential allocation. This model can be seen in both initial DEX offerings (IDO launchpad) and initial exchange offerings (IEO launchpad).

For example, Binance Launchpad (IEO launchpad) requires participants to stake BNB tokens to join token launches.

• Pros: Higher stakes usually lead to bigger allocations, rewarding loyal holders.
• Cons: This model can become costly and may develop into a Ponzi-like system, where new investors must buy and stake increasingly more tokens just to get a small allocation.

2. First-Come, First-Served (FCFS) model

FCFS allocations are given out on a first-come, first-served basis. Investors who join the sale as soon as possible secure their allocation. This method is common in NFT launches and some token sales.

• Pros: Fairness based on timing—everyone has an equal chance if they’re quick enough.
• Cons: If a project isn’t popular enough, it might fail to raise enough money, leaving unsold tokens and reducing investor interest overall.

What are the benefits of using crypto launchpad platforms?

The biggest advantage is early access—investors can buy tokens at lower prices before they go mainstream. At the same time, launchpads vet new crypto projects, reducing the risk of scams compared to unregulated token sales. Let’s break down the key benefits of using a crypto launchpad.

1. Early access to promising projects

One of the biggest advantages of using a crypto launchpad is getting in early. You can buy tokens of early stage crypto projects often at a lower price.

For example, Solana (SOL) was first available to investors through CoinList (initial coin offering launchpad platform) at just $0.22 per token in Mar 2020. It skyrocketed to over $200 at its peak in November 2021.

Another example is Filecoin (FIL). It was sold for $1.91 per token on CoinList in August 2017, and at its peak, it traded above $230 in April 2021—a 123.57 times return for early investors.

These discounted prices are a key reason why launchpads are so popular, especially in bull markets. However, not every token increases in value. Some token projects struggle after launch because they unlock too many tokens at the TGE. As a result, prices can drop below the initial sale price. 

That’s why understanding tokenomics, vesting schedules, and market conditions before investing is crucial.

2. Stronger security and vetting

Most crypto launchpads carefully review and vet projects before they go live. This helps protect investors from scams and low-quality projects.

Top crypto launchpads like Binance Launchpad and DAO Maker have strict selection processes. They evaluate a project’s team, tokenomics, security, and long-term potential before allowing it to raise funds. While this doesn’t guarantee success, it significantly reduces the risk of rug pulls or fraudulent projects.

3. Access to exclusive investment opportunities

Many crypto launchpads offer investment opportunities that aren’t available anywhere else. Some projects only raise funds through specific launchpads, meaning investors who don’t participate miss out entirely.

However, access often comes with requirements. Platforms like Polkastarter and DAO Maker require investors to stake their tokens or meet certain criteria to qualify for an allocation. This ensures that only committed investors can participate, reducing the risk of bots or short-term speculators flooding the sale.

For those who meet the requirements, this exclusivity can be a big advantage. It allows them to get into high-potential projects early, sometimes before venture capital firms or major exchanges list the tokens.

4. Immediate liquidity for tokens

One major advantage of launchpads—especially IEOs (Initial Exchange Offerings)—is that tokens are often listed on major exchanges right after the sale. This gives investors immediate liquidity, meaning they can buy, sell, or trade their tokens without waiting for a listing.

For example, projects launched on Binance Launchpad typically get listed on Binance immediately after the sale, providing instant access to a large pool of traders and liquidity. This is a big improvement over traditional fundraising, where investors might have to wait months or years before they can sell their holdings.

However, immediate liquidity also comes with risks. Many investors sell quickly to take profits, which can cause the token price to drop right after launch. That’s why understanding vesting schedules and market conditions before investing is crucial.

What is the best launchpad for Ethereum?

If you're looking to invest in early-stage Ethereum-based projects, choosing the right launchpad is key. A good launchpad gives you access to quality projects, a fair token distribution model, and strong security. Here are three of the best Ethereum-compatible launchpads used by both new and seasoned crypto investors:

1. DAO Maker

DAO Maker is one of the most trusted and established crypto launchpads, particularly known for supporting early-stage Ethereum-based projects. It caters to retail investors through its unique fundraising models, which aim to reward long-term, committed participants instead of just quick-profit seekers.

While DAO Maker started on Ethereum, it's multi chain supported: Ethereum, BNB Chain, Polygon, Avalanche, and Arbitrum. DAO Maker has a solid track record of launching high-performing tokens.

• My Neighbor Alice (ALICE): ALICE token was sold $0.125 per token on 2 February 2021. It reached over 298x ROI from its initial price.
• Orion Protocol (ORN): ORN is known for strong 47.10x post-launch growth.

2. Seedify

Seedify is a leading launchpad platform originally built on BNB Chain, but it has since expanded to support Ethereum, Polygon, and Avalanche, making it a strong multi-chain launchpad for both GameFi and metaverse projects. It focuses on helping early-stage crypto games and Web3 projects raise funds while offering transparent and structured token sale processes for investors.

Seedify currently supports: Ethereum, BNB Chain, Polygon, and Avalanche. Seedify has launched many well-known GameFi and NFT-focused projects, including:

• Bloktopia (BLOK) with ATH ROI: 698.23x. A metaverse skyscraper where users can learn, earn, play, and create. ROI: 654.85x. A PvP action game combining fun gameplay with blockchain mechanics.
• Cryptomeda (TECH) with ATH ROI: 185.70x. A gaming ecosystem integrating NFT and DeFi elements.

3. Polkastarter

Polkastarter is a decentralized launchpad that supports Ethereum and other chains like BNB Chain, Polygon, and Avalanche.

To participate, you usually need to hold and stake a certain amount of POLS tokens. The more you stake, the higher your tier and allocation for token purchases. Polkastarter also often requires KYC (Know Your Customer) verification before participation.

Some of the most notable projects that launched through Polkastarter include:

• Ethernity (ERN) with ATH ROI: 269.62x. A leading NFT platform featuring authenticated, licensed collectibles.
• Thetan Arena (THG) with ATH ROI: 264.17x. A play-to-earn MOBA game with millions of players across Southeast Asia.

What are the risks of crypto launchpads?

While crypto launchpads offer exciting investment opportunities, they also come with significant risks. Here are the key dangers investors should be aware of:

1. High volatility

Crypto launchpad projects often experience extreme price swings after launch. While some tokens rise quickly, others crash just as fast. If you invest at the wrong time, you could end up losing a large portion of your funds.

For example, some projects launched during a bull market have delivered massive returns, but those launched in a bear market have struggled to maintain their value. Timing and market conditions play a huge role in whether an investment is profitable.

2. Risk of scams and rug pulls

Not all crypto launchpad projects are legitimate. Some teams launch tokens, raise funds, and then disappear with investors’ money—a scam known as a rug pull.

Although top launchpads vet projects before listing them, no system is foolproof. Some fraudulent teams have passed initial reviews and still failed to deliver their promises. Always research the project’s team, tokenomics, and community engagement before investing.

3. Unfair allocation due to whales

Many launchpads use a stake-to-access model, where the more tokens you stake, the bigger your allocation. This benefits large investors (whales) who stake massive amounts of tokens, allowing them to buy tokens at better prices while smaller investors get less favourable allocations.

This creates an uneven playing field where regular investors have to lock up large amounts of money just for a chance to participate. In some cases, the cost of entry is so high that it outweighs potential profits.

4. Immediate price dumps after listing

Tokens launched through IEOs on centralized exchanges often face heavy sell-offs right after listing. Many early investors sell immediately to lock in profits, which can cause sharp price drops.

If too many investors sell at once, the token price may never recover, leaving late buyers at a loss. To avoid this, check the vesting schedule and how token distributions are structured before investing.

Legal and regulatory compliance of crypto launchpads

Crypto launchpads operate in a gray regulatory area, as cryptocurrency regulations differ from country to country. While some platforms follow strict compliance rules, others operate in jurisdictions with little oversight. This creates both opportunities and risks for investors and projects.

1. KYC (Know Your Customer) requirements

Most reputable launchpads require users to complete KYC verification before participating in token sales. This means investors must provide personal identification documents, such as a passport or driver’s license, to comply with anti-money laundering (AML) laws.

• Purpose: KYC helps prevent illegal activities like money laundering and fraud.
• Investor impact: While KYC increases security, it also means users must trust the platform with their private data.

2. Regional restrictions

Some launchpads are restricted in certain countries due to local regulations. For example, CoinList does not allow users from Canada, Cuba, and North Korea to participate in its token sales due to legal restrictions.

Before using a launchpad, investors should check whether their country allows participation to avoid issues with withdrawals or legal risks.

3. Regulatory risks for projects

Projects launching on crypto launchpads may face legal challenges depending on how their tokens are classified. In some countries, tokens sold through launchpads could be considered securities, meaning they would fall under stricter financial regulations.

For example:

• The U.S. Securities and Exchange Commission (SEC) has cracked down on projects that sell tokens without proper registration.
• Some projects have faced lawsuits for violating securities laws, causing legal trouble for both the project team and early investors.

4. Exchange compliance and listing approval

For IEOs (Initial Exchange Offerings), centralized exchanges like Binance and KuCoin have stricter compliance standards. Before a project is listed, the exchange evaluates its legal standing and compliance to avoid regulatory issues.

Impact on investors: While this adds a layer of protection, it also means that not every project can get listed, and some token sales may be delayed or cancelled due to compliance concerns.

Should you use a crypto launchpad?

Crypto launchpads offer a unique opportunity to invest early in blockchain projects, often at lower prices than public listings. They provide access to carefully vetted startups, immediate liquidity, and the potential for high returns—especially in a bull market.

However, they also come with significant risks. Price volatility, token dumps, unfair allocation systems, and regulatory uncertainty can all impact your investment. While top launchpads add security through project vetting and KYC verification, no investment is risk-free.

Crypto launchpads can be a powerful tool for early investment, but they are not a guaranteed path to profit. If you choose to participate, make sure you do your homework—research the project, understand the launchpad’s rules, and assess market conditions before committing your funds. And most importantly, never invest more than you can afford to lose.

FAQ

What are the main benefits of using a crypto launchpad?

Crypto launchpads let you access early-stage projects before they hit public markets, often at lower prices. They also pre-vet projects, helping reduce scam risks. Most launchpads offer transparent information about the team, tokenomics, and roadmap. Plus, staking native tokens can give you better allocation opportunities.

How do crypto launchpads ensure the security of investors' funds?

Most launchpads conduct due diligence on projects, including KYC for teams and smart contract audits. They use vesting schedules to prevent early investors from dumping tokens. Some also use escrow mechanisms to hold funds until milestones are met. However, risk still exists, so research is always needed.

How do launchpads differ from traditional ICOs?

Traditional ICOs often let anyone invest without screening, making scams more common. Launchpads usually have stricter requirements like KYC, token staking, and project vetting. They also structure token releases to avoid pump-and-dump scenarios. Overall, launchpads offer more structure and investor protection than typical ICOs.