Lowering the Barriers to Entry

FOR SMALLER PROJECTS AND INVESTORS

Any investment (other than replying to an exotic email, which notifies you of an unexpected inheritance and asks for bank account credentials) requires a certain level of maturity from the person ready to make it. In crypto, it also requires technology literacy besides having an amount of money to invest. So how do launchpads help with this?

Ancient Greeks, John Dickinson, and the US WW2 motto teach us that “united we stand, divided we fall.” By uniting large groups of small crypto investors into what DeFi calls “liquidity pools” [Kuznetsov], launchpads create community bonds between smaller non-professionalized investors, usually via Twitter, Telegram, Medium, whatever is your preferred social outlet.

These people talk to each other, acting as peer-to-peer gatekeepers and market analysts [Rapoza]. Those able to give good DeFi advice to others soon emerge as community leaders [Zimwara]. From the opposite side of the value chain: first-time DeFi startuppers can easily approach a big crowd of small private investors [Khalili], creating the WallStrpracticeet Bets effect [Yarovaya]. Before DeFi launchpads, those smaller projects were out of the institutionalized crypto investment funds [Madeo].

“Ivan on Tech” summarized the whole idea well: “crypto launchpads provide a way to raise capital for new projects while allowing investors to gain early access to token sales.” [Liljeqvist] [Prusso] In other words: IDO launchpads is a “little folks’” answer to the institutional DeFi. Why are institutions the primary driving force behind the “launchpad movement”? [Dawg] The answer lies in the next section of this chapter.