Launch platforms must, of course, protect investors first. Although these platforms, which act as bridges, work to be fair, the priority is to protect the investor. However, according to this, it would not be ethical to harm the project. Even if small investors are affected by the negative behavior of the projects, they do not have any sanctioning power on their own. For this reason, platforms that bring investors together with projects undertake this task.
What are the known ways to protect the investor?
If we list the essential factors to be considered to protect the investors;
- Analyzing the project correctly and predicting possible risks
- Bringing accurate information to investors by working impartially
- Making a legally acceptable launch contract with the project
- Hold the funds for a certain period in case of any unfavorable situation.
While the first three issues can be achieved with the proper studies in terms of the platform, the last issue, namely holding the fund, is not welcomed by the projects. After all, a project wants to collect its funds from pre-sales and move on.
Is a guaranteed launch system possible without losing value?
Today, many Launchpads have published their investor protection policies. Funds are generally held for a certain period after projects are listed on centralized or decentralized platforms. The rule in this process is that the price does not fall below the IDO price. Some platforms expect a price above a certain percentage. This obliges the project to plan the launch correctly and maintain an active market maker activity. This is what is expected from projects. However, it may be too late for everything if project-related negativity occurs 10–12 days after listing. The investment is always at risk even until the last unlocked time.
In addition, the investor’s investment to enter the Tier system should not be forgotten. The status of the market, the position of the launchpad, and the level of the projects launched will be reflected in the token price of the platform. With these negativities, the investor can experience severe losses in his investment in the tier system.
Frankly, is there a method that will secure both investments of the investor (tier mechanism investments and project pre-sale investments)? How much did Launchpads address this issue in their investor protection policies?
Is a zero-loss running launchpad possible?
Of course not! But it is possible to minimize it. How Does?
First, the investor should be aware of the risks taken. Even if one trusts the platform to launch the project, one should examine and research the project. No investor should invest blindly. After that, of course, it is the job of the Launchpad platform to protect the investment. The protection policies of the platforms should also be carefully examined.
Likewise, can some platforms not have any tier mechanisms? Almost no! If you know, please specify in the comments of the article.
So, is it possible to create a system where the tier mechanism will not lose value? Can the tier mechanism be tied to a fixed-value asset? If this is possible, can a guarantee of investment protection be provided in this way? Here is the most important question!
Is a launchpad doing decentralized pre-sale?
No, if you want an absolute protection policy and investment guarantee! But this doubt disappears for a platform that redefines the rules and applies them unconditionally.
All pre-sale, vesting, staking, claim, and airdrop operations are carried out with smart contracts. There are approved audit firms that check these contracts. These smart contracts, which are correctly prepared, audited, and operationally flawless, are ethical investment protectors.
In short, all the operations of the Launchpad platform are carried out under the guarantee of these smart contracts. No person can change the conditions or interfere with the results. No one can touch project tokens or investor funds in truly decentralized smart contracts.
Let’s imagine an utterly trustable launchpad!
Let’s examine the steps of a pre-sale together;
- The platform creates a launch contract that matches the project’s specifications and deploys it on the blockchain.
- Investors who have obtained the right to pre-sale with various conditions and campaigns can make purchases at the start of the sale.
- When any investor makes a purchase, the investment amount (can be any coin, token or stable) goes to the smart contract. The smart contract records how many project tokens that investor has received.
- The sales round ends when the total sales amount offered by the platform is completed or the pre-sale period expires.
- According to the tokenomics document showing the vesting times of the project, it should have waited until the first unlock time.
- If no investor protection policy is implemented, the commission is deducted from the funds collected, and the remainder is sent to the project.
- When the first unlock time comes (usually TGE or Listing time), the claim is opened or distributed for the number of tokens at the specified rate. For example, if the initial rate is 10%, 10% of the tokens are sent to the investors.
- If an investor protection policy is implemented, the listing status is reviewed. The funds are sent to the project if there is any problem within the specified time. In case of any issues, the investment amount of the remaining tokens can be refunded at the platform's or the investors' discretion. For example, the remaining 90% investment is paid back.
- If the refund has not occurred, the transactions continue when the other unlocked times come. Launchpad’s mission is complete when the last tokens are delivered. In our example, the distribution will take nine months in the project, with 10% unlocked tokens every month.
So what else is essential for this pre-sale to be entirely credible?
- The amount sold must be realistic. The platform should avoid misleading metrics. The simplest way to do this is to look at the sales contract on chain explorer. From your wallet, you can easily track where the funds go and which smart contract. Afterward, you can see if the funds shown have accumulated in the contract. In this way, you can reach accurate sales figures.
- Just as funds should be traceable, project tokens arriving on the platform should also be traceable. Have the project tokens been transferred to the smart contract? How are the distributions made, and are they made on time? In this way, you can access accurate token movements.
- Please urge the Launchpad platforms you use to be transparent. It is your natural right to see where your investment is going. Be sure to obtain the smart contract addresses of the pre-sales you participate in. Watch tokens from projects. Make sure they are transferred to smart contracts. Stay away from platforms that manually distribute tokens.
Investor public awareness will prevent Launchpads from making unethical mistakes. It is entirely in our hands to create reliable organizations even in this decentralized environment…
Next Week; A Smart Launch Platform: IQlaunch
IQ Zone Team