The next generation of Launchpad is going to reshuffle the deck.

Introduction

ICOs are back, and various launchpads are flocking to grab a share of the pie.

In October, Coinbase acquired Echo and launched its token sale platform earlier this month; in September, Kraken partnered with Legion. Meanwhile, Binance has a close relationship with Buildpad, while PumpFun is attempting to issue utility tokens through Spotlight.

These developments come at a time when investor interest and trust in ICOs are recovering.

Umbra Privacy raised $156 million on MetaDAO with a $750,000 fundraising target, while Yieldbasis was oversubscribed 98 times in less than a day on Legion.

Umbra Privacy raised $156 million on MetaDAO with a fundraising target of $750,000, while Yieldbasis was oversubscribed 98 times in less than a day on Legion.

Aria Protocol was oversubscribed 20 times on Buildpad, attracting over 30,000 users. As ICOs begin raising funds at several times their offering price, filtering out the noise becomes especially important. In our previous article, "Capital Formation in the Crypto World," Saurabh explained how capital formation in the cryptocurrency space has evolved. He explored how new financing structures such as the Flying Tulip investment model and MetaDAO's ICO attempt to resolve potential conflicts of interest between teams, investors, and users. Each new model claims to better balance the interests of all parties. While the success of these models remains to be seen, we see various Launchpads attempting to address the conflicts between investors, users, and teams in different ways. They achieve a selective investor cap by allowing project teams to choose their own investors during public token sales. In today's article, I will explain the reasons and methods behind this investor selection process. From 2017 to 2019, ICO investments largely adopted a first-come, first-served model, with investors flocking in to try and enter at low valuations, typically aiming for quick profits in the early stages of a project. Research data from over 300 ICO projects shows that 30% of investors exited within the first month of the project's launch. While quick returns are always tempting to investors, project teams are not obligated to accept every wallet asking for money. Truly visionary teams should be able to select their ICO participants, filtering out those committed to long-term growth. The following is Ditto of Eigencloud discussing the shift from a First-Come, First-Served (FCFS) sales model to a community-centric sales system. The problem with this round of ICOs was that it ultimately fell into a "lemon market" trap. Too many ICO projects emerged, many of them scams or traps, making it difficult to distinguish between high-quality and low-quality projects. Launchpad's inability to rigorously vet all listed projects led to low investor trust in ICOs. Ultimately, the number of ICOs surged, but the amount of funding willing to support them was insufficient. Now, it seems the situation is beginning to change. Cobie's fundraising platform, Echo, has raised $200 million for over 300 projects since its launch. Meanwhile, in some independent fundraising events, we've seen millions of dollars disappear in just minutes. Pump.fun successfully completed its ICO, raising $500 million in less than 12 minutes; Plasma raised $373 million in its public sale of XPL, aiming for $50 million. This shift is not only evident in token issuance but also in Launchpad itself. Emerging platforms like Legion, Umbra, and Echo promise greater transparency, clearer mechanisms, and more robust architectures for founders and investors. They are eliminating information asymmetry, allowing investors to distinguish between good and bad projects. Today, investors can clearly understand a project's valuation, funding amount, and related details, thus better mitigating the risk of being trapped in a losing investment. This has led to a resurgence of capital in ICO investment, with project subscriptions far exceeding expectations. The new generation of Launchpad is also focusing on building an investment community aligned with the long-term vision of the projects. After acquiring Echo, Coinbase announced the launch of its own token sale platform, emphasizing screening based on user fit with the platform. Currently, they achieve this by tracking users' token selling patterns. Users who sell tokens within 30 days of the sale's start will receive a lower allocation, and more fit metrics will be announced soon. This shift towards a community-centric distribution philosophy is vividly demonstrated in the meticulously designed airdrop plan of Monad and the ICO distribution plan of MegaETH, both of which are centered on community members. MegaETH's subscription multiple was approximately 28 times. The project required users to link their social media profiles and wallets with their on-chain history to filter out a list of token holders they considered most aligned with the project's philosophy. This is the shift we are seeing: when funds from ICOs become abundant again, project teams need to choose who to allocate those funds to. The next generation of Launchpads was created to solve this problem. Currently, platforms such as Legion, Buildlpad, MetaDAO, and Kaito are emerging as representatives of the new generation of Launchpads. The first step is to vet ICO projects to ensure investor trust in the Launchpad platform; the next step is to vet participating investors to ensure that fund allocation meets project standards. Legion adheres to a performance-based allocation philosophy and provides the most comprehensive community member ranking system. The platform has successfully completed 17 token offerings, with the most recent offering experiencing an oversubscription rate of approximately 100 times. To ensure that tokens reach the right people in oversubscribed sales, each participant is assigned a Legion score, which comprehensively considers their on-chain history and activity across protocols, developer qualifications (such as GitHub contributions), social impact, network reach, and qualitative statements about their intended contributions to the project. Founders launching products on Legion can choose to allocate weighted metrics such as developer engagement, social influence, KOL (Key Opinion Leader) engagement, or community education contributions, and assign weights accordingly. Kaito takes a more targeted approach, allocating a portion to "speakers" actively participating in Twitter discussions. Engagement is weighted based on a user's voting credibility and speaking influence, the amount of $KAITO staked, and the rarity of the genesis NFT. Projects can choose from these preferred supporter types. Kaito's model helps projects attract influential social media participants as early investors. This strategy is particularly useful for projects heavily reliant on initial exposure. Buidlpad's core concept is based on fund allocation. The more funds a user stakes, the more tokens they receive in the token sale. However, this also means that only wallets with funds can participate. To balance this capital-based system, Launchpad introduced a "team system," awarding leaderboard points and extra rewards based on community activities such as content creation, educational outreach, and social media promotion. Of the four Launchpads, MetaDAO is the most unique. Funds raised through the MetaDAO ICO are placed in an on-chain vault and governed by a market-based mechanism called Futarchy. Futarchy is essentially futures trading of the underlying tokens, but its trading is based on governance decisions rather than price. All funds raised are held in an on-chain vault, and every expenditure is validated by a conditional market. Teams must propose a plan for using funds, and token holders bet on whether these actions will create value. Transactions are only completed when the market reaches a consensus.

Investor participation in the MetaDAO ICO is permissionless and completely open, with each investor receiving a token allocation based on their invested capital. However, community building and alignment of interests among token holders occur after the ICO concludes. Each proposal is a marketplace within Futarchy, where traders can sell tokens or buy more when a proposal is approved. Therefore, the token holder community is formed based on the final decision.

While this article focuses on the curated allocation scheme, from a project team's perspective, many other factors need to be considered before deciding to launch an ICO, such as project screening criteria, founder flexibility, platform fees, and post-launch support. The following comparison table helps you understand all these factors at a glance.

Web3 can bring together users, traders, and contributors through incentive mechanisms based on verifiable reputation systems. Without mechanisms to weed out bad actors or attract suitable participants, most community token sales will remain immature, filled with a mixed group of believers and non-believers. The current Launchpad provides the team with an opportunity to improve the token economy and take the right first steps. The project needs tools to identify suitable users within the ecosystem and reward their tangible contributions. This includes influential users with active communities behind them, as well as founders or builders who create useful applications and experiences for others. These user groups play a vital role in driving the ecosystem's growth and should be incentivized for long-term retention. If the current momentum continues, the next generation of Launchpad might help solve the community launch problem in the cryptocurrency space, a problem that airdrops have consistently failed to address.