Launchpads were the undisputed kings of the last crypto bull market, particularly during 2017. They dominated the investment scene, offering some of the best opportunities in the space. Buying into launchpad tokens and participating in their sales was one of the most lucrative plays for retail investors, often leading to 10x-100x returns. Competition for allocations was fierce, but the struggle was well worth it—especially when projects distributed 100% of their tokens upfront, ensuring IDO participants could capitalize on explosive price action.
For context, IDO (Initial DEX Offering) was initially designed as a fully unlocked sale tier, priced higher than seed, private, and even public rounds. Back then, getting into an IDO meant immediate access to liquidity and high multipliers on launch. Fast forward to today, and the lines between public sales and IDOs have blurred. Launchpad users are now subjected to public vesting terms—without the liquidity advantage they once had.
The Evolution of Launchpads: The Shift to Worse Terms
The shift in IDO structure is a direct response to the current market landscape. Liquidity is low. Retail appetite for risk has diminished, and the organic buy pressure that fueled previous bull markets is nowhere to be found. In response, projects and launchpads alike have adapted—but arguably, in the wrong direction. Instead of innovating, they have consistently worsened token sale terms for retail investors.
One of the biggest reasons IDOs have lost their appeal is simple: in many cases, it has become more profitable to buy tokens on the open market instead of participating in the sale. This reality has forced launchpads to rethink their approach, leading to what could be seen as a desperate and self-destructive pivot.
The Guaranteed Refund Era: A Fatal Mistake
To retain participants, launchpads introduced a so-called “guaranteed refund” mechanism. The idea? If a project fails to meet expectations, investors can request a full refund. At first glance, this seems like a fair safety net for retail users, but in practice, it has done more harm than good.
Here’s why:
- Unstable Funding for Projects: Since investors can opt for a refund if the launch doesn’t meet their expectations, projects struggle to secure the full capital they need. A large portion of investors are now focused solely on getting their money back rather than believing in the project’s long-term vision.
- Vesting Kills Momentum: Most public sales now come with a vesting schedule—typically 25% at TGE (Token Generation Event), followed by monthly unlocks. This means a project’s token needs to hit at least 4x at launch for investors to avoid mass refunds. If the price doesn’t perform, a significant percentage of participants exit, leaving the project underfunded.
- Launchpad Manipulation: The darkest aspect of this model is that some launchpads are gaming their own system. Reports suggest that launchpads whitelist their own addresses, buy large allocations, and then refund if they don’t make an immediate profit. This predatory behavior creates artificial demand pre-launch but results in instant liquidity drains post-launch. It’s a lose-lose situation for both investors and projects.
The Bigger Picture: Where Do Launchpads Go From Here?
The current state of launchpads is unsustainable. Their golden era was built on the premise of fair access to promising projects, but today, they are more focused on risk mitigation than real curation. This lack of conviction has driven many investors away, pushing them towards alternative launch models.
One such alternative is Pump.fun, a platform that has shaken up the industry by giving projects full control over their launch conditions. However, this is a separate debate altogether, as it brings its own set of challenges.
Ultimately, launchpads have two choices:
- Return to Their Roots: Scrap the guaranteed refund system, reintroduce thorough due diligence, and focus on high-quality projects rather than mass-producing IDOs with safety nets.
- Reinvent the Model: Adapt to how retail invests today. Whether this means leveraging decentralized governance, new auction mechanisms, or tokenized incentives, the current model is clearly outdated.
Launchpads were once the heart of crypto fundraising. If they fail to evolve, they risk being left behind for good.
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