Launchpad (token sale)
Also called: launchpad · IEO · initial exchange offering
Definition
A launchpad is a platform, often run by an exchange, where users can buy a new project's tokens in a sale before or as the tokens list for trading.
This entry is shown in English.
How Launchpad works
Exchange launchpads, a form of IEO or initial exchange offering, select projects and sell a fixed amount of tokens at a set price. Many require you to hold or commit the exchange's own token or a stablecoin during a snapshot or subscription period. If the sale is oversubscribed, each participant receives a share and the unused funds are returned.
On-chain launchpads exist too, where you connect a wallet and buy tokens through a smart contract. These can have fewer checks on projects, so research matters more.
Key points to check: the sale price and the fully diluted valuation, how much of the supply is sold, the vesting schedule for team and investor tokens, and when tokens unlock for buyers. Launchpad tokens can fall below the sale price after listing, especially when large unlocks follow. Participation usually needs KYC and is blocked in some countries.
Example
Suppose a launchpad sells 10,000,000 tokens at 0.05 USDT, raising 500,000 USDT, but users commit 25,000,000 USDT. The sale is 50 times oversubscribed. You commit 5,000 USDT, so your allocation is 5,000 divided by 50, which is 100 USDT, buying 2,000 tokens. The other 4,900 USDT is returned. If the token lists at 0.08 USDT, your 2,000 tokens are worth 160 USDT; at 0.03 USDT, they are worth 60 USDT.
Common mistakes
- Assuming every launchpad token will trade above its sale price.
- Ignoring the vesting and unlock schedule that can add selling pressure after listing.
- Joining an unknown on-chain launchpad promoted through private messages.
Learn and practise
FAQ
What is an IEO in crypto?
An IEO, or initial exchange offering, is a token sale run by an exchange on behalf of a project. The exchange handles the sale and usually lists the token afterwards.
Why did I receive only part of my launchpad commitment?
Most sales are oversubscribed, so allocations are cut pro rata. The unused amount is returned to your account after the sale.