Limitations of Launchpads in the Crypto Space and Implications for IDO Investors
Decentralized Finance (DeFi) has experienced a very wide explosion since the start of 2019, garnering users, developers, and investors from various parts of the globe. From 2020 to 2021 also, DeFi grew by over 12,300 percent, with more than $150 billion in assets locked across different protocols. Undeniably, the idea that someone could execute transactions and access financial services anonymously without middlemen, third-party costs, and superfluous requirements, propelled DeFi to the peak where it is today. However, the growth and stream of successes in the DeFi space cannot be separated from the rise of crypto launchpads.
Launchpads and other supporting DeFi accessories do not only allow investors access to potential projects but they also enable project creators to share their groundbreaking and innovative D’Apps with the world conveniently. Predominantly, global interests in DeFi have skyrocketed, with developers creating D’Apps every day to mitigate the different challenges that abound in the traditional finance (TradFi) space. Courtesy of the launchpads ecosystem, blockchain developers now have a way of raising funds for their projects and catapulting them into the limelight. While the benefits of launchpads remain obvious, there are still some limitations in several ways.
The Challenges of Launchpads
A rug pull is the malicious tendency for a crypto project developer to cater away with investors’ funds. It is a prevalent scam in the industry whereby investors lose their money because they invested in an improperly validated-project. Rug pulls mostly occur, due to some launchpad’s lack of reliable audit service.
Access to New Projects
Investors like to be on top of new projects. Unfortunately, access to upcoming projects with potential is complicated at the very least because of the operational model of some launchpads.
Lack of Data-Driven Structure and Transparent Templates
This final point and perhaps the most important is the lack of data analytics and transparency structure for prospective investors to access. In other words, most launchpads in the crypto space are one-dimensional — they only provide IDO details like tokenomics, cover image, token supply etc, for investors without delving into what the project entails. They push the DYOR narrative and leave curious investors, who might have no time, to do their research about projects before the IDO event. In most cases, it becomes cumbersome for prospective IDO investors to investigate the project’s viability, market opportunities, revenue model, its sustainability and other vital information. On one hand, the launchpads’ team wrongly conceive that the little information they exhibit about the project is sufficient for investors while on the other hand, they assume defectively that all prospective investors will have the luxury of time to carry out necessary findings.
As the population of crypto users and IDO investors therefore continue to grow, the lack of a data-driven approach as well as a transparent template for validating projects remains one key factor why many investors do not feel secure investing in many projects. This in itself has a tendency of killing the Launchpads ecosystem.
Final Thoughts and What DPAD Launchpad is Up To!
DPAD Launchpad is an emerging launchpad that aims to revolutionize the industry and help investors identify quality projects at the right time. With investors in mind, DPAD relies on its data-driven and transparency as-a-service (DATAS) approach to help investors identify promising projects by providing them with all the details about such a project. As a convenience launchpad, such information and data about different projects will help investors to make better-informed decisions.
By extension, DPAD Launchpad is hack-proof and has an incredible vetting process that filters scams to protect investors from falling prey. By this transparent template, evaluation of different projects will be open to public verification so as to eliminate the biases that may creep in from the launchpad coordinating team.