Saturday, September 24

Introduction to Token Launch

Token launch on pinksale

Token launch is simply how crypto ventures seek to raise funds by offering their tokens to investors before launch. Aside the basic minting of a token, funds are needed to develop and market a token. Crypto platforms are aware of this so they need to attract investors to raise the money.

In order to this, they have to exchange some of their tokens for fund. They offer these tokens to investors at a cheaper price and usually below market price. This is usually done before listing the token in the open market. There are different ways of raising funds for new tokens and they include the following:

  1. IOs: This is known as Initial Offerings, It can come in forms of an ICO, IDO, IEO and so on. Here interested and qualified investor’s stake or commit a token in exchange for the new token. It is hosted and listed by a CEX(IEO) or by a DEX(IDO). It can be a  private or public sale. For private, only a limited number of investors can participate in a closed round. For public, anyone that meets the requirements can participate. It is open to the general public and requirements are not as high as that of private offerings. This is the most popular way of raising money for new crypto tokens.
  2. Farming: In this case, you need to stake the LP of a particular token or just a single token in a farm to earn the new token. It lasts for a particular period of time where the staked tokens are used to provide initial liquidity for the new token. Users can unstake whenever they like and still get their initial capital. This usually occurs when a token wants to launch its forked version related to it. Let’s say token B wants to launch token xB, users stake a B LP or just B to earn xB according to the obtainable APR.
  3. Fork Airdrop: Here, new crypto tokens can be airdropped to holders of a particular token. The new token is usually a fork of the parent token or built on its network. Here small liquidity is added to the token as it is exposed to the public market. Example of such is the Flare token airdrop to XRP holders.

However, It is on record that less than 30% of new tokens went on to be successful after launch. The mode of token launches are decentralized and with no strong regulation guiding it. This has led to the adulteration of token launches as many tokens are littered over the internet promising investor’s heaven on earth. Well, the reality is entirely different as most of them get rugged by dubious developers or dumped to ashes. Most start well and flop or go into oblivion with time.

 It’s a painful experience losing your hard earned money on these token launches. It is advised to do a detailed research about any new token to know the platform backing them and team managing it. Tokens from reputable platforms tend to do well than tokens launched by anonymous entities.

For ICOs, there are crypto platforms that organize new token launched called “LaunchPads”. You can read about launchpads here. Users are required to stake or commit the launchpad native tokens to get an allocation. Once the allocation is secured, you can now exchange the required token to get the new token allocated to you. Popular launchpads includes Binance and other CEX platforms, RedKite by PolkaFoundry, Polkastarter, BscPad, Avalaunch, Solanium and Xfund. You can check our article about launchpads.

You can follow up on our verified upcoming tokens to be launched especially IOs but you should be aware that there is no guarantee on them and you are to proceed at your own risk.

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