ACO. FT. HQX.
No, not airport codes. These are the token tickers for three ICOs (Initial Coin Offerings) in which I was scammed. I didn’t invest a lot but it still accounted for most of my profit from the previous months of cryptocurrency trading during the 2017 bubble. And these three were just among the many scams that no doubt, had a hand in the collapse of the market, which saw BTC retrace almost 90%.
For some context, BNB was around $8 and had no real utility in a fancy new centralised cryptocurrency exchange that was barely a year old.
Fast forward to 2020 and the advent of DeFi reignited demand for new and innovative projects in the cryptocurrency industry. The market picked up and in this, Binance saw an opportunity. On 9 September, Binance Launchpool opened up staking pools for their customers to earn newly-minted tokens in a project called Bella Protocol. But Binance is still not decentralised, people argued, and so paved the path to the advent of the launchpad – a platform dedicated to helping new projects organise and release their new tokens to lucky participants, using smart contracts.
Technically, this would mean the scandals that marred 2017 would not be repeated, and the reputation of ICOs would be salvaged and reinstated (but more on this later) while bringing us more acronyms: IDO (Initial DEX Offering), IEO (Initial Exchange Offering), IFO (Initial Farm Offering), and even the novelty IJO (Initial Jetfuel Offering, on Jetfuel Finance) and IAO (Initial Ape Offering on ApeSwap), as well as incubators.
While many established projects are now deciding to add launchpads, incubators and token offerings to their products, the number of dedicated launchpads continues to increase. And the Binance Smart Chain is the home of the majority of these, thanks to the massive chunk of marketshare it has taken from its rivals. Low gas fees, quick transactions and overall smooth experience is making BSC an ideal incubator itself for launchpad innovation.
BSCPAD arguably laid the groundwork for the BSC launchpad model, selling its own governance token on its platform that today hosted its eighth partner IDO. Easy approval of contribution amount, joining the pool and claiming purchased tokens with combined gas of less than $2 (the same actions on Polkastarter will cost upwards of $200 in gas).
And in its wake, new rivals are sprouting up, hoping to muscle in on the market. Below are just some of the names listed in (and just outside) Coinmarketcap’s top 100 BSC projects:
- BSCStarter, KickPad and Deeplock are launchpad-first platforms barely a few IDOs in.
- Projects that began life as PancakeSwap forks are offering IDOs (BakerySwap) or IFOs (BurgerSwap and Goose Finance following PancakeSwap’s model)
- AMMs are also entering the arena (BSCex and JulSwap)
- Newer kids on the block include Wault Finance, Yellow Road, Newv Finance and Seedify, not to mention Dodo as well.
- Established ERC20 projects adding BEP20 offerings include Bounce Finance and Zeroswap.
- Heck, even the first-ever launchpad project, Bella Protocol, have added a launchpad to Q4 2021 of their roadmap.
And each project offers its own innovations, takes or gimmicks (depending on how you entered the project and what you are getting out of it), such as guaranteed allocations, staking rewards, locked governance tokens for eligibility, innovations of decentralisation, voting and decision-making, and even involving NFTs.
Mixing and matching different features gives each launchpad a very different format and platform, each suiting a different type and level of investor. The promise of ‘moonshots’ and consistent passive income just for holding launchpad tokens, lures more crypto virgins to the fray, giving rise to a larger market for the increasing number of projects. The entry points for being part of a new business in crypto is much more accessible to retail investors than traditional stock market companies. But with this potential for riches, comes dangers and obstacles which not only investors, but the runners behind these projects, must face and overcome.
For investors, the potential of rug pulls, pump-and-dumps and generally-poorly run businesses (which launchpads should be mitigating and vetting, but is that really decentralisation?); while for projects, disgruntled investors, keeping ahead of rivals and simply finding enough projects to keep the cogs turning.
In the coming weeks, I will leverage my passion for launchpads, and take a little dip (and maybe a shallow dive) into the pool of our launchpad world, and with each article, take a look at a particular feature of launchpads, and possibly even pick out one which is doing it particularly well (or not). And as new offerings come to the fore almost every few days, I will also take some time to explore the new products. All I hope to achieve is to help the newcomers arriving in Binance Smart Chain, whether as a complete newcomer or stepping down from being an ethereum maximalist, navigate the exciting and crowded waters of the launchpad pool. And hopefully avoid adding any more tickers to my (and I am sure, many other people’s) hall of shame, adorned with rug pulls and scams.