Platform sitting between a project and its early investors.

Project wants to raise capital before listing. Needs to reach investors, run a token sale, handle distribution, create initial liquidity. Doing all of that independently is complicated. Launchpad handles the infrastructure and brings the audience.

Investors get early access to tokens before public trading. Cheaper entry than buying at listing. In exchange they accept vetting requirements, KYC, sometimes lock-up periods, and holding the launchpad's own platform token.

Both sides get something. Both sides take on risk.

How It Actually Works

Project applies to the launchpad. Team reviews whitepaper, tokenomics, audit status, team background. Quality of this review varies dramatically between platforms. Some run serious due diligence. Others approve almost anything that pays the listing fee.

Approved projects get listed with a sale date, token price, allocation structure. Investors who meet participation requirements can buy in before the public.

Common participation requirements: KYC verification. Holding a minimum amount of the launchpad's native token. Sometimes lottery system for oversubscribed sales where demand exceeds available allocation. Sometimes tiered access where holding more platform token gets larger guaranteed allocation.

After the sale ends tokens distribute to buyers according to vesting schedule. Liquidity gets created on a DEX or the token lists on an exchange. Trading begins.

The Platform Token Model

Most established launchpads require holding their own token to participate.

Binance Launchpad: hold BNB. Allocation calculated based on BNB held over a snapshot period.

DAO Maker: hold DAO token. Tier system based on amount held.

Polkastarter: hold POLS token for guaranteed allocations.

Creates circular demand for the platform token. More popular launches drive demand for the platform token from people trying to qualify. Platform benefits from this mechanic regardless of how the launched project performs.

Worth understanding because it means buying the platform token is itself a bet on the launchpad's future deal flow quality.

The Different Types

CEX launchpads. Binance Launchpad most prominent. Exchange runs the sale. Stricter vetting. More credibility signal. Over 70 projects launched since 2019 raising over $180 million. Post-launch support from the exchange including listing and liquidity.

DEX launchpads. Polkastarter, Fjord Foundry, DAO Maker. Decentralized participation. No exchange relationship required. More accessible globally. Vetting standards vary more widely.

Memecoin launchpads. Pump.fun launched 2024 and changed the category entirely. No vetting. No KYC. No project review. Anyone creates a token and launches it on a bonding curve. Over 11 million tokens launched. Most worthless within hours. Completely different product from traditional launchpads despite using the same word.

What Launchpad Vetting Actually Means

Reputable platforms review whitepaper, team credentials, audit status, tokenomics, regulatory compliance. KuCoin Spotlight claims only 10% of applicants pass their review process.

That still doesn't guarantee project quality. Vetting reduces obvious scams. Doesn't predict whether the product gets built, whether the team executes, or whether the token performs after listing.

2021 and 2022 had plenty of launchpad-backed projects that launched successfully then failed to deliver on roadmaps or saw token price collapse after vesting unlocks hit. The launchpad approval was real. The project outcomes weren't what the approval implied.

Featured on a launchpad is a signal of minimum viability. Not a guarantee of anything beyond that.