In the second part of our article series, we will discuss why most investors are losing. No matter what the reason is, nobody likes to lose. Of course, there is no way to create a zero-risk product in the crypto markets. The absolute zero risk in the crypto market is not entering the market. Is there a way to minimize this risk of loss?
What are the reasons for losing on Launchpads?
This platform is the most critical reason public investors experience losses on Launchpads. It has created a tier system with its token. Suppose the token loss is converted into a direct investor loss. Likewise, this platform, which brings projects together with investors, should analyze the projects correctly. This puts the responsibility for project selection entirely on the platform. The fact that the launched project suffers a decrease in value and becomes fraudulent will also cause a loss to the investor.
If we think about the platform, investors who want to be included in the Tier system are staked by receiving the tokens belonging to the platform. Since all the negativities related to Launchpad will be reflected in the token price, the most significant risk to the investors may arise from the depreciation of this platform. If these tokens are locked within the specified periods, it may not be possible to stop the loss quickly.
If we think from the Launchpad side, the reason for the loss is the projects. The project that has been launched needs to be accurately analyzed by the platform in all the following aspects;
- The Strength of the Idea
- Tokenomics Appropriateness
- The Strength of the Vesting Strategy
- Design of Token & NFT Utility
- Roadmap Deepness
- Whitepaper Ingredients
- The Partner & Investor Quality
- The Marketing Status of the Project
- Team Representation
- Social Media & Community Strength
The risks associated with a well-prepared project with these issues will be minimal. The platform fulfills this responsibility and provides its investors with a safer launch environment.
What is the most significant danger?
Undoubtedly, the most significant danger is that the platform does not fulfill ethical issues. We regret to state that the most critical disadvantage of a decentralized market is scammers, as in every financial revolution. So what are these issues?
- To be impartial, Launchpads, which act as a bridge between projects and investors, must keep an equal distance from both sides. It should examine the project objectively and present only the projects it deems appropriate to its investors. Thus, it should help fund quality and deserving projects and ensure that the quality public investor community is a part of this project. Therefore, both sides will have a win-win relationship.
- To be transparent; Because of the blockchain system, everything is transparent. However, many launchpads do not want to show transfers between projects. It does not like to share the addresses of the sales contracts created. Of course, it could also be because of security. However, adequately decentralized smart contracts are secure. Monitoring this smart contract's funds and token movements will remove many worries. This will build a unique trust for Launchpad.
- To be honest, The income model of Launchpads is the commission rates obtained from the fund amounts of the launches. Rather than sacrificing honesty for profit, it is a virtue to know that honesty will bring more profit over time. To make a quick profit, not to examine projects in depth, to play with historical data to reach more community, to make fund cuts with so-called excuses for more profit, to mislead investors by knowing the status of the project, to deceive the projects by understanding the state of the market, etc. will damage the platform itself.
- To be integrative, all blockchain projects have to contribute to this ecosystem. Otherwise, they will perish. Creating value and adding partners to this value is the main task of every organization. Launchpads should also take on a critical mission from this ecosystem. To be integrative in an impartial, transparent, and honest manner. Some projects disappear in the cycle of launchpads, and some projects add millions of value to the ecosystem with good launches!
So what is the solution in line with all this information? How do we create conditions that protect public investors and projects?
Is it possible to create a Launchpad without a token?
Launchpads need a token for the tier mechanism. This token is also a source of liquidity for launchpads. The increase or decrease in the token's price naturally affects the investor. Recently, investors have suffered a large part of their losses due to these launchpad tokens they have locked.
Yes, it is theoretically possible to create a launchpad without a token. However, in this case, it may seem impossible to adjust the purchasing rights of the investors. Again, theoretically, it is possible to make this adjustment without a token. So how?
In this case, what risks does a launchpad undertake with only the launch revenues? Let’s examine it together.
What risks do Launchpads take?
Launchpads carry many risks, which are a bridge between projects and investors. These are;
- First, it should keep the project tokens and investor funds securely in its smart contracts and wallets. This is a situation that is open to many cyber attacks. For this reason, the platform has to take serious security measures for both the website and the applications. For this, it should work with its cyber security partners or employees in this regard. This is a factor that in itself creates a severe cost.
- For the reliability of funds from investors, the platform should be very careful in matters of dirty money. For this reason, KYC and KYB operations are critical. Precautions should be taken against money laundering operations. Working with partners that provide AML (Anti-money laundering) service is essential. These operations create a specific cost per user.
- Although it analyzes the status of the projects at the very beginning, Launchpad is still solely responsible for any negative behavior that may arise from the project. In such cases, Launchpad will have to take action to minimize the loss to the investor.
- In any other case, the most common method is to refund investors. In the case of a refund, the investor has already lost some more. In this case, Launchpad will not earn any launch revenue. The platform, which has done promotional and marketing activities for days, organized giveaways and AMA events, assumed all token and fund risk and, incurred KYC and AML costs, lost all its earnings in case of refund.
Be Aware of Scams! Really?
Have you heard these words a lot in the recent bear market? So what is the reason? Can Launchpads pose a risk to their investors?
YES, except for Launchpads with quality and ethical behavior!
We are not discussing platforms that have faced bad conditions because of the abovementioned risks. We are talking about media that knowingly and willfully harm projects and their investors. Stay away!
After this series of articles, you should choose the right launch platforms and projects to invest in. However, we will talk about the most accurate method of protecting investors.
Self-criticism of PlayPad…
PlayPad has been operating for nearly a year. We have had many good and bad experiences as a team during this time. Each time we tried to get to the root of the problem. We tried to find the best solutions by analyzing our strengths and weaknesses.
We are happy to bring to our investors, who have been our supporters in seed, private and public tours since the beginning. However, we could not keep the success and big hype we caught during the PlayPad launch for a long time.
Both the weakness of the projects we launched and the significant decline in the market have significantly reduced the value of PlayPad. We were very saddened by the technical problems experienced during and after the launch. Every time we tried to take action to protect our investors. As best we can…
When we faced the problems of the projects we launched, we realized we did not analyze these projects sufficiently. What happened during sales and claim times showed us that we must develop more accurately. Especially after the claim loophole error in our last launch, the BicycleFi project, we decided not to launch until we solved all the problems.
While the team was anonymous before, we decided to open the team to the public due to these problems. Our entire team continues to work for the platform with great effort. Finally, PlayPad has agreed to continue its activities under the IQ Zone. IQ Zone, an incubation platform, will launch the projects it supports on the PlayPad platform. This union gave us even more strength.
We stand by our investors no matter what, and we have never forgotten their support for us. We are still working to minimize their losses. Please follow this series of articles carefully.
Get ready for the Launchpad evolution!
Next week; Is It Possible to Protect the Investor?
IQ Zone Team