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Understanding Token Launches
Launching a token involves more than just the initial launch; it's a tool to supercharge a protocol's go-to-market strategy. From a marketing angle, it's a time to build an initial user base and loyal community, attract platform value and TVL liquidity, and leverage PR opportunities.
Tokens can allow platforms to leverage new possibilities, such as increased decentralisation, bootstrapping, fostering community growth, creating financial primitives and overcoming the Cold-start problem. However, tokens often have been misused, with limited use cases and little focus on real utility and effective tokenomics.
The goals of a token launch, covered in more depth in the section A Path to Sustainability of launches, will include a variety of variables depending on the goal and method of launch. But we will break down a few of the core goals of a good token launch.
- Distribution and decentralisation: Ensures wide distribution to loyal and long-term users, avoiding supply shocks, and maintaining a balance with demand.
- Community bootstrapping: Allows projects to attract new users and build the foundations of a community to accelerate protocol growth.
- Price discovery: Intended to determine fair market value, avoid self-set values that can lead to problems, and employ mechanisms that reflect the community's perception of fair value.
- Liquidity depth: Adequate liquidity depth is vital for limiting volatility, protecting the community, and attracting traders.
- Platform value: The launch can be used to boost platform value by increasing total-value-locked (TVL) if relevant and utilising strategies such as liquidity mining programs.
- Fundraising and liquidity bootstrapping: A launch can aim to raise funds for project development or bootstrap the required liquidity.
A launchpad (or launch platform) is more than a platform for the public sale of a token. When executed correctly, it's a powerful marketing and GTM tool that assists in bootstrapping the initial community, helps retail users find exciting pre-launch projects, and even performs due diligence to avoid scams.
Additionally, a good launchpad is essential for ecosystem building, attracting attention, new users, and projects. It supports token launch by covering many bases of a successful launch and distribution. However, it's worth noting that not all launchpads are created equal.