How to: Determine if a Launchpad is Good

By Jennifer MuirheadPublished in GuidesThu 3rd 20225 min read

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Our top tips on researching launchpads and determining if they are solid platforms to participate in an IDO with.

What is a Crypto Launchpad? 

 

A crypto launchpad, or IDO platform, is a decentralized finance platform for launching new coins, crypto projects, and raising liquidity. 

 

The Pros of IDOs IDOs are the successor of initial coin offerings (ICOs) and initial exchange offerings (IEOs). They are an excellent choice for new projects and startups keen to launch a token and access immediate funds, as IDOs typically have better and immediate liquidity at every price level due to their mechanics. 

 

Unlike other fundraising methods, IDOs are generally considered a fairer way to launch a new cryptocurrency project, as they avoid pre-mines, which is an issuance system that favours project founders over community members. 

 

Are IDOs Safe? 

 

Those familiar with the crypto space are probably also familiar with what a “Pump-and-Dump” scheme is. For those of you who don’t, it originated from the 2000s movie Boiler Room. 

 

The con goes as follows: a stock brokerage house buys a bunch of cheap shares in a worthless company. They promote the company as the next big thing and convince uneducated investors to buy shares now before the stock price sky-rockets (the “Pump”). 

 

As investors jump in to get their cut of the new exciting company, the stock price goes up significantly. The broker then sells all their shares, thus making off with a huge profit (the “Dump”). 

 

The sudden unloading of so many shares quickly drops their price and people realise that the company itself is worthless. The investors are left holding worthless stocks that they paid a fortune for. 

 

This same strategy is being used in the crypto markets. Unfortunately, these types of Rug Pull scams are popular with IDOs. To avoid them, potential investors need to be wary and do their research on what makes a launchpad legitimate to help protect their investments. 

 

Tips for Finding a Legitimate IDO Launchpad 

 

Look for a project that has: 

 

  1. A strong online presence IDOs that plan to stay for a while are generally quite active online. Check to see if they have a Twitter, Telegram, LinkedIn, Reddit, and website, and whether they’re up to date.
  2. A public team If the creators behind the project don’t want their names attached to it, there’s probably a reason why. Just as you want the brand to have an online identity, you want the people behind the project to have one, too.
  3. A community While you’re online, don’t just look at what the company’s posting, look at what their community is saying about them. The best projects If they don’t have a community behind them, that’s a red flag.
  4. A limited supply Just like with traditional currency, projects that don’t have a limited supply of their token will almost certainly run into an inflation issue. Bonus points if they have a method for de-inflation, commonly known as “burning”.
  5. A supply distribution that favours the public When a large amount of the supply is held by just a few people there is a higher chance that their choices will affect the price of the token, such as in the Pump and Dump schemes. Keep an eye out for large percentages owned by just a few people.
  6. Open-source code This gives the community a chance to audit the project, check for bugs, and ensure there isn’t any cheating going on. Transparency is an important aspect of cryptocurrency success.

 

Common Issues With IDOs

 

One of the main issues a lot of IDOs face is that they are not community-driven. They’re a funding platform and nothing more. Because of this, there’s little incentive to see the platform do well or stick around. Both the investors and the team behind the project see the IDO as a facilitator for Pump and Dumps schemes and not an opportunity for creating the next generation of crypto funding. 


 

Karus Starter is different. They’re long-term oriented, and attempting to become the premier IDO of choice for safe and legitimate projects. Karus Starter offers unique opportunities for emerging projects to partner with experts and already established projects to continue building and delivering superior products that their communities can enjoy, while enriching the web3 ecosystem as a whole.

 

What is Karus Starter

 

Karus Starter is the primary launchpad on Kusama that supports upcoming projects that wish to build on the Kusama network, Binance, Polygon and the greater Substrate ecosystem. They are a platform for the community, by the community and of the community. Karus Starter allows any projects to raise funds only after going through a rigorous vetting process by multiple team members on project strategy, current financing, current progress, project team member backgrounds, current investors and other important factors.

 

What Makes Karus Starter Good?

 

Karus Starter understands the importance of investors, and offers several benefits to keep them engaged in their launchpad long term. 

 

Community Driven

All KST token holders can become an early supporter of a project by voting in favour of the IDO and receiving allocation incentives.

 

Ecosystem

All projects that have launched their IDO on Karus Starter earn membership in the KST Ecosystem council. Composed of both established projects and emerging projects built on Substrate, the ecosystem provides early support for emerging projects through the expertise of the established projects.


Auto-Invest

The highlight of Karus Started compared to other IDO projects on the market is the Auto-Invest feature. This is a feature that allows users to stake stablecoin (USDT or USDC) on the platform so that it can automatically register for the next IDO offerings without having to go through the allocation registration steps again.

 

Incentive Structure and Policy

IDO participants are incentivized with higher allocation win rate by holding any of the previous IDO tokens. They have implemented a tier-based system for users to have different benefits based on their staking amount. This policy ensures that community is the key to longevity on the Karus Starter platform and fosters an ecosystem of IDO projects that can benefit from others’ success, rather than compete.


 

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