London, UK, 25 June 2021, ZEXPRWIRE, Over the past few months, a number of cryptocurrencies have started selling their tokens on a new type of marketplace – the crypto launchpad – and in doing so have garnered tremendous amounts of media attention.
On average there are two new launchpads released to the public every day. So what are they and why should the savvy investor care?
What is a Launchpad?
In early days in the crypto field, projects would sell their tokens without any assistance. This caused mixed results with a lot of problems and for a while the centralised exchanges that sprung up, like Coinbase or Binance, filled a gap they were not really set up for new projects. Add to the mix the crypto truism that whoever gets in early wins!
Enter the launchpad – they provide a way to raise capital for new projects while also allowing investors to gain early access to token sales on the way (known as an Initial Decentralised Exchange Offering– IDO). The key benefit for investors is early access at keen prices to hot new projects looking to raise cash before they launch.
Often launchpads also provide a useful function known as an incubator – providing a helping hand to fledgling projects through the critical stages of their development. They provide a range of support such as funding, marketing, advising, strategy, community building, and more. So that looks good in theory but how does it pan out in practice? Let’s look at a project using both concepts that is hoping for great things.
Mr Levent Cem Aydan, 33, an American educated Turkish citizen, founded Seedify.fund out of frustration at the attitudes of the traditional Private Equity industry towards fledgling cryptocurrency start-ups in his native Turkey during the 2018 crypto boom. Demanding up to half the equity in start-up projects they left no room for entrepreneurs to innovate or get motivated to develop their businesses.
Fast forward two years and leveraging that frustration to good effect, Seedify was born in January 2021, to allow owners of Seedify’s own crypto token, SFUND, to vote on which projects were funded. In exactly the sort of direct, mass ownership that crypto promises Seedify allows token owners to vote, in proportion to their holdings, on project proposals as well as key decisions facing Seedify.
In fact, taking it a step further he opened up ownership beyond the wealthy to anyone able to put their hand up and register for free tokens earlier this year. This meant that over 25,000 people were able to own SFUND and can decide on its investments later this year – a far cry from the slack handful of executives and wealthy investors usually found in traditional providers. It also differs from most other launchpads, who usually give most of the benefit to larger investors, by offering 33% of any investment to those holding fewer than 1,000 tokens – typically those with under $2,000 to invest.
Seedify uses the launchpad and incubator concepts to offer budding crypto entrepreneurs the chance to line up online in from of Seedify’s token owners and pitch their business proposal. After passing Seedify’s check process to eliminate scammers and ensure investors have a name and face to trust their concept goes to the vote. If they gain 80% or more of the yes votes, they will receive a $75,000 USD seed fund from Seedify together with a package of support.
Whilst the cash is designed to allow project owners to develop their business, it is the support offered which adds equal value, in Seedify’s view, to allow the business to focus on its core utility rather than worrying about their choice of auditors or whether their developers are trustworthy.
Using their network of partners and advisors they claim to ensure the business has a fighting chance to survive till it is time to go to market. At that point the Launchpad comes into its own by allowing these projects to fly the nest without giving up significant equity – unlike those VCs for Mr Aydan in 2018. Seedify say their secret sauce is the 3% of each launched project’s token supply given to Seedify and their 25,000+ token holders on clearing the Launchpad. This not only pays back the fund for their support, it also provides the token holders with a return on the investment.
They also intend to keep their core base motivated by allowing them, later in 2021, to contribute their own expertise to the incubation process. Rather than just relying on the limited expertise in the fast-moving crypto market they will leverage the talents of their own investors where appropriate. This focus on the average investor is a critical difference to most launchpads which don’t allow them any say beyond depositing funds into an investment.
A final element is the growing community of Seedify investors, known as the Seedify HODLers, that has propelled the project with considerable velocity across the crypto-verse and on into the world beyond. This army has leveraged the power of social media, together with their dedication to the Seedify vision, to energise the wider community on their vision of a community driven seed stage fund. They educate and inform on major platforms such as Twitter, Telegram, and Instagram to ensure that SFUND ownership becomes widespread. Since their launch they have garnered a little under 50,000 followers just on Twitter – equal to a decent sized town!