For a long time, Daxin has been an investment method with a higher winning rate in the investment market and has been favored by various funds. From US stocks to Hong Kong stocks, new stock subscription has always been recognized by investors, and is called "risk-free return" by some investors. Binance has brought this "IPO" model of purchasing new shares to the cryptocurrency field, and combined with the exchange's own situation, the "Launchpad" IEO model was born.
Since its launch, Binance Launchpad has become the section most likely to generate potential projects with hundreds or even thousands of coins. As of September this year, a total of 31 cryptocurrency projects have been launched on the Launchpad section, and "grasping Launchpad" has gradually become a guideline for users. After all, following the smart money has always been a good strategy for profit in the investing world, and who could be smarter than the largest cryptocurrency exchanges? The IEO model has become the most popular new way for users nowadays due to its low risk and low participation threshold.
Nowadays, with the advent of the bear market and facing a market with increasingly depleted liquidity, the Launchpad model is becoming a new focus for exchanges to compete for users with its stable rate of return. Major exchanges have successively launched their own Launchpad products, all wanting to get a share of it. A piece of the pie, and Binance’s LPD products have always been far ahead with high-quality projects and stable wealth creation effects. So what are the strategic intentions behind its wealth effects that cannot be ignored? ChainCatcher will explore the intentions and dilemmas behind the wealth effect of Binance Launchpad in this round of bear market, as well as the optimization and improvement of the future system.
Mechanism characteristics and strategic intentions
As we all know, IEO is the abbreviation of Initial Exchange Offerings, which refers to the behavior of an exchange, as the issuer, directly issuing tokens to users of the exchange and helping project parties directly raise funds. Different from the ICO model, IEO skips the "public offering" to the public in advance and directly places the asset shares for trading on the secondary market.
Binance Launchpad has always been Binance’s exclusive token issuance platform, providing Binance users with first-look rights to high-quality projects to support the ecosystem of the cryptocurrency industry. Users need to hold a certain amount of BNB to participate in new subscriptions. The final distribution of new coins depends on the ratio of the amount of BNB invested by the user to the total amount of BNB invested by all participating users. Each user's token allocation has a hard cap to ensure Launchpad project tokens are distributed equitably among all participants.
However, Binance’s intention to launch Launchpad is not limited to using its own liquidity advantages to provide a convenient platform and market for high-quality new projects and achieve mutual benefit and win-win, or it is simply to value user experience and want to rebate users. More of an intention is the far-reaching strategy behind it to expand its share of the crypto industry.
1. Achieve user growth
"The product itself creates value, user growth delivers value, and the ultimate goal is to complete value conversion." This is the usual idea of product growth, and Binance has injected this idea into Launchpad products. Launchpad creates value for Binance users with its “guaranteed profit without loss” wealth effect, which has also become an important factor in attracting users. When more and more investors began to notice Launchpad and were willing to try it, Launchpad’s stable income also gave these users a taste of the sweetness.
As Launchpad's wealth effect began to circulate and expand among investors, external crypto users naturally chose to join Binance with liquidity. Launchpad also completed value conversion while attracting external liquidity, and gradually began to become platform users. An incremental tool. In addition, Launchpad products increase the platform’s trading volume while also increasing Binance Exchange’s market share and solidifying its position as the world’s leading digital asset exchange.
2. Maintain BNB price
From ICO to IEO, exchanges are trying to find a new balanced relationship, that is, "platform currency". Binance was inspired by the IPO of US stocks and used platform currency to balance the relationship between project parties and investors. It cleverly combined the platform currency "BNB" with the IEO model. Users only need to hold a certain amount of BNB to participate. For the subscription of the LPD project, the funds invested at the same time (the number of BNB) are linked to the allocation of subscription tokens. Such a mechanism has greatly mobilized the market purchasing power of BNB, and when the wealth effect of the LPD project is formed, it will also introduce a large amount of external liquidity into the BNB market.
当然，我们也可以将 LPD 项目认为是 BNB 的另一种赋能，每当 LPD 上新时总会引起 BNB 市场的波动，而大部分持有者则看重 BNB 长期持有收益。据 CAPITALISMLAB 此前披露的数据显示（自 21 年截止到今年 4 月），若首日卖出代币，则 BNB 本位总回报率为 36%，年化为 14%，甚至高于同期 ETH Staking 的收益，这也使得 BNB 成为了投资者心中即 BTC 与 ETH 之后最具有长期投资价值的加密货币。
This is even more true in the bear market. Even though the market value of cryptocurrency has dropped to historical lows, according to CoinGecko data, BNB currently ranks fourth in market value, second only to USDT. Among them, Launchpad’s role in maintaining the stability of BNB cannot be underestimated.
All in all, with the support of Binance’s “head” influence, Launchpad has attracted a large number of domestic and foreign investors to participate. Investors not only hold BNB income but also have the right to participate in IEO, which greatly increases the rate of return of BNB. At the same time, It also maintains the stability of the BNB market. Launchpad is like a moat for the BNB market in a bear market. While stabilizing the currency price, it continuously mobilizes liquidity for it.
3. Increase the right to speak in currency listing
Behind the birth of Launchpad is a key step for Binance to revitalize the platform currency, but it also contains its ambition to have the right to have a say in currency listing. From SFP to GMT to HOOK, every time Binance LPD launches a new product, it can be said to live up to expectations. By promoting high-quality projects, Launchpad has established a good reputation among users and project parties for "guaranteed profits without losing money." It also gives people trust and attention on Binance Launchpad.
"Listing on Binance" has gradually become the belief and "pull warning" of every holder. Driven by the profit-seeking mentality, more and more investors have begun to believe in Binance, and Binance has also begun to become a popular platform for various investors. The ultimate destination for big projects. The abundant liquidity advantage, large user base and enthusiastic market response have all increased Binance’s voice and brand influence in listing coins, and the emergence of Launchpad has become a home for various new projects.
4. Cultivate user loyalty
In fact, with the development in recent years, Binance has achieved a complete lead in terms of market share, user growth, and the right to speak on currency listings. Due to regulatory and other factors, the current focus of Binance's development strategy has gradually shifted from competing for market share to cultivating user loyalty.
Since its inception, Launchpad has become one of the main ways for Binance to share and give back platform dividends to users by providing high-quality projects. While meeting the needs of users’ interests, it also attracts users’ attention and recognition, thereby enhancing users’ understanding of the platform. Exchange recognition and loyalty. Binance interacts Launchpad’s stable income with BNB’s long-term holding income. While increasing the source of income for BNB holders, it also effectively improves platform user stickiness and cultivates long-term user loyalty.
In addition, the emergence of Launchpad has also built a more complete digital asset ecosystem for Binance: high-quality projects are introduced through Launchpad to attract new users and feed back old users, while Binance’s product suite provides users with more investment opportunities and Channels for project participation, thereby continuously expanding the ecosystem, retaining and converting attracted users, and retaining more old users.
Where does the Launchpad wealth effect go from here?
According to ChainCatcher data statistics, among the 18 IEOs conducted since 2021, the average first-day increase reached 1,445%, and the average maximum increase reached 50.24%. Among them, GMT also ranked first with the highest increase of 41,686%, and GMT also ranked first. It can be said to be the most successful project in Launchpad history.
Note: The data is based on the USDT trading pair. The first-day increase is calculated based on the closing price of UTC+0. The maximum increase does not include the highest price caused by violent fluctuations within one hour of going online.
It is not difficult to see from the above table that Launchpad has its own shining projects at every stage, from wallets to fan tokens to decentralized domain names and education. However, as the market goes bearish, trading volume shrinks, and the liquidity crisis spreads, Launchpad products are also facing a challenge. Since reaching the "benefit myth" of GMT, the highest increase in history has declined slightly, although the overall yield is far from It surpassed the previous projects of GMT, but it seems difficult to reach the height of previous GMT.
1. “Uncertainty” about project quality
In fact, since the launch of Launchpad, Changpeng Zhao has always emphasized that "the core of the IEO model is to find good projects. The original intention of Launchpad is to help entrepreneurs and help the development of the industry." However, in the development of Launchpad, it is not difficult to see that from the fan representatives of the club, Although they were all new LPD projects at the time, the market performance was still uneven.
Putting aside the so-called "mental accounting" factors (projects with low starting prices are more likely to be favored by investors), the increase in price due to low starting prices is generally higher, which may be related to the quality of the project itself. From the "girlfriend gate" HOOK to the "educational outlet" EDU, there have always been a few voices on the market about Binance's "currency preference", and some users have also begun to question Launchpad's so-called new listing guidelines. "What are the standards?" ”.
However, according to CapitalismLab research, all indicators of the three tokens launched since HOOK are at an average to upper level. The median first-day increase is 24.4 times, which is 1.9 times the historical median. The historical maximum increase is 1.4 times the historical median. The first-day return of BNB standard is 1.5 times, and the historical maximum return of BNB is 1.3 times. In other words, these projects in the bear market are actually more profitable than most projects in the bull market.
Looking at the entire market, the so-called "Bestie Gate" and other currency listing disputes are probably just a market phenomenon caused by the impact of the bear market environment, which has led to the loss of overall market wealth, and has also affected the wealth effect of Launchpad products, and investors have various Controversy is also an "inevitable product" of a bear market. As He Yi previously responded publicly, Binance does not have phenomena such as "rat warehouses", "relative coins", and so-called "bestie coins". Binance still cares about the wealth effect" and its current "performance is still the best. of".
"Rumors stop among the wise." As far as the market itself is concerned, how to control the overall quality of currency listing from the source of the project, adhere to Binance's concept of screening "good projects", and create more positive value for users is still a question of currency An Launchpad What needs to be considered to maintain the wealth effect in a bear market.
2. The "speculative" mentality is amplified in the context of the bear market
With the successive launch of Launchpad products, its growth pattern has begun to be traced, and careful investors have begun to discover the rules, which has resulted in the influx of a large number of profit-seekers. With the fixed mindset generated by the established model of LPD products, short-term speculative arbitrage began to intensify. Similarly, due to the impact of the bear market predicament, investors' patience and trust have begun to wane, and there are fewer and fewer long-term Holders.
In the standard mode of Launchpad, users gradually became numb. In the eyes of some investors, Launchpad was no longer an incubator for early new projects, but became an arbitrage tool for short-term speculators. Of course, some investors regard their income as "financial income for BNB holders" instead of enthusiastically looking forward to the "wealth creation myth" of the next new currency. When this investor mentality is reflected in the market, it becomes an "unsatisfactory" Launchpad wealth effect.
But in fact, as far as the growth changes of the entire Launchpad sector project are concerned, we can find that, for example, Injective Protocol (INJ) and Polygon (MATIC) are driven by market trends after experiencing one or several stable cycles. Only then did we get a real explosion of value, and create the myth of wealth creation with an increase of over 100 times. In other words, there is no "absolute" growth pattern in the Binance Launchpad market. The so-called "speculative mentality" may face greater investment risks. Only long-term wealth accumulation under the interaction between investors' DYOR and the market environment is the key to success. A more reliable way to earn money.
3. Market competition intensifies
In the IEO field, there has always been a distinction between "Binance Launchpad" and other IEOs. With the rapid development of the industry and intensified competition, coupled with the advent of the bear market and the depletion of liquidity, the Launchpad sector has also become a major exchange As a "must compete", more and more CEX are beginning to follow Binance's footsteps and follow this model, while Binance Launchpad will inevitably encounter greater challenges. But under the current market background, Binance Launchpad is undoubtedly the best investment target when the market is calm, and its market share still ranks first.
From the above point of view, although there are some noises about Binance Launchpad, we can still see that the reason for its controversy is mainly related to the current market environment. As He Yi said before, "The listing of Binance currency is not decided by one person. The logic of listing the currency should try to take into account the needs of most users." Just like "everything has its light and shadow," so does Launchpad. in this way. In the huge capital market, it is not easy to take care of every project party and user, especially in a bear market. The overly impetuous market environment has also doubled the market pressure on Launchpad, and all Launchpad can do now is to try to take care of everything. The needs of most users and project parties.
In fact, many LPD users we interviewed still have expectations for the wealth effect of Binance Launchpad. The vast majority of users said that Binance Launchpad’s projects are relatively high-quality and full of potential. They are still optimistic about its wealth effect and hope to participate in Binance Launchpad. Gain benefits and increase wealth.
"The wealth effect of Binance Launchpad can be sustained. Basically, the opening price of LPD will be more than 10 times or even 20 times the cost price. Binance Launchpad projects must pass the Binance Labs assessment, and Binance Labs is undoubtedly still the top risk in the crypto field. As one of the investment institutions, their vision is not too bad.”
——Ryan
“Binance’s top position is still solid, its brand image is deeply rooted in the hearts of the people, and it has always been well established. This means that it still has strong bargaining power for most projects, thus providing Launchpad with a steady stream of high-quality projects to stabilize user loyalty. degree, so I think Launchpad’s wealth effect can be sustained, even in a bear market.”
——Jacob
How to continue to dominate the Launchpad market?
Since the occurrence of a series of black swan events such as FTX last year, the global crypto market as a whole has begun to fall into the dilemma of market liquidity shortage, but Binance Launchpad is still deeply rooted in the hearts of the people with its "top" brand image and stable income. How should Binance respond to doubts from some users and competition from peers and continue to dominate the Launchpad market?
In fact, in the long history of the development of the traditional investment market, US stock market launches have also encountered difficulties similar to Binance Launchpad, including "uncertainty of winning results", "market fluctuations", "high competition", and "IPO pricing" Problems inside and outside also affect the return feedback from new share subscriptions. Solving these difficulties requires the joint action of market conditions between securities firms and investors. So putting it on Launchpad requires the joint efforts of Binance and investors.
1. Educate and train investors
Drawing on the development history of the above-mentioned traditional securities firms, strengthening investor education cannot be ignored. Binance is obliged to provide investors with comprehensive and detailed project white papers and related information, regularly publish market reports to analyze market trends, and assess project risks to provide risk warnings to help investors gain a more comprehensive understanding of the basic situation of the project. At the same time, Binance should also educate investors on risk management, strengthen their investment capabilities and decision-making skills, and further improve the quality of Launchpad from the user level, thereby increasing the competitiveness and influence of the platform and widening the gap with other competitors.
In fact, Binance has been working hard to educate and train investors. At present, Binance has launched Binance Research (Binance Research), which is dedicated to the most cutting-edge research in the field of blockchain, and regularly launches "project research reports" on the blockchain industry and Binance's listed trading currencies to improve industry transparency. On the basis of this, we focus on solving the problem of information asymmetry between project parties and investors, reducing investors’ investment risks, and protecting their investments.
2. Strengthen project selection and screening
In response to the uncertainty of project quality, Binance can further strengthen the selection and screening of projects to ensure that each project is innovative, potential and sustainable. While facing the bear market dilemma and declining capital activity, users prefer short-term hot spots. Binance should strengthen the screening of high-quality projects, adapt to market changes more acutely, and follow the trend to explore short-term hot projects.
Regarding the above-mentioned disputes with project parties, Binance Launchpad may adopt relatively flexible currency listing rules for projects with high popularity and potential, making the rules more fair and applicable to truly good projects, because only truly high-quality projects can be adopted , Binance Launchpad can win the attention and recognition of more users and investors.
3. Launch a more flexible subscription method
In fact, Binance’s original intention of “launching Launchpad to promote the development of high-quality cryptocurrency projects and provide investors with investment opportunities” has not changed. However, as time goes by, the market changes, and the established new model is formed. The market response may not be as good as before, so "how to re-mobilize the enthusiasm of the market in terms of the model" has become a question that needs to be considered for the continued wealth effect of Binance Launchpad.
As users feel that the current Launchpad market response is "boring", more flexible subscription methods need to be introduced, such as stepped subscriptions, public auctions, etc., to meet the needs of investors with different needs, increase user participation in the project, and increase subscriptions Fairness and transparency of the process. In addition, for high-net-worth long-term BNB holders, some priority subscriptions and exclusive subscription services can also be provided to increase the return rate of long-term holders.
4. Strengthen Launchpad’s project review
He Yi previously said regarding the "Rat Warehouse" issue, "Binance monitors Launchpad's project side wallets and market maker accounts. The Launchpad project Token currently requires multi-party custody of the project side's Token as part of mutual supervision." In fact, Binance has always maintained a strict self-discipline in its review and supervision of currency listings, and has been exploring more complete supervision methods.
For currency listing review, Binance can introduce multi-faceted review methods, such as technical review, financial review, compliance review, etc., to comprehensively evaluate the feasibility and risks of the project and improve the quality and reliability of the project; at the same time, it can also learn from DeFi The governance model promotes the community governance mechanism of the Launchpad platform and improves the participation and trust of platform users by allowing investors holding platform currency to participate in the decision-making and management of the project.
For Binance, controlling the "quality of the project side" and "investor threshold" is equivalent to controlling the risks at both ends of the "exit and entry". How to "remain true to the original intention" and put itself in an equal position between the project side and investors Among them, while providing high-quality projects while paying close attention to the interests of users, Binance also needs to think about it.
Of course, we can also see from the above-mentioned controversies that in the face of some noise about Launchpad, Binance may appropriately delegate its rights to users, project parties and the market. Listening to the voices of all parties is also the key to regaining the popularity of Launchpad. . Currently, Binance has opened public social channels such as Twitter and Binance Square to better "brainstorm" in the market and grasp the current development pulse of the encryption field.
summary
From the financial turmoil to the subprime mortgage crisis, the survival of the U.S. stock subscription model has proved the correctness and wealth effect of its system. Inspired by this, Binance Launchpad will continue and develop on this basis in the future.
Under the bear market, lamentations are everywhere, but Binance’s market share still ranks first, and the role of Launchpad is undoubted.
Just like Changpeng Zhao said in an AMA before that "the bear market environment has caused more projects to come to seek help", and how to carefully select good projects to increase exchange users and transaction volume to activate the market while enhancing the voice of currency listing and brand influence. Strengthening and expanding the ecosystem, thereby providing users with more investment opportunities and creating value, is a direction that requires long-term thinking by Binance Launchpad, and is also the "only way" to realize its strategic intentions.
At a time when a liquidity crisis can easily lead to a stampede, Launchpad's strategic focus has gradually begun to shift from the initial market share to the cultivation of user loyalty and the development of reputation. This is the only way for a company to grow into a "century-old" enterprise, and it is also a bear market. Among them, the top priority is to stabilize the platform market, and how to better meet users' revenue expectations has become Launchpad's current development direction.
Currently, Binance has launched Launchpool based on Launchpad to further increase the annualized return rate of long-term BNB holdings through methods such as “BNB mining, raising and selling”. According to CAPITALISMLAB data (2021 to April this year), the total return rate of BNB is 52%, and the annualized rate is 21%, which is more than 2 times the ETH Staking income in the same period.
In addition, in response to market preferences, user preferences and platform preferences, Binance Launchpad has also made currency listing adjustments. According to chainbroker statistics, we can also see that compared with previous projects, recent IEO projects (HOOK, ID and EDU) Ranked in the top ten, with higher quality and higher average returns.
According to data from Binance’s official website, Binance Launchpad has raised more than $100 million for the project.
As far as the current liquidity crisis in the global crypto market is concerned, "the greater the ability, the greater the responsibility." Binance has become the mainstay in the bear market with its huge influence and strong market liquidity. Launchpad is still the currency It is a powerful competitive weapon to expand market share and increase wealth effect. As the market gradually recovers, Launchpad’s wealth effect may continue and expand, because Binance Launchpad is more capable than ever of raising funds for excellent projects that are in trouble in the bear market, creating a more eye-catching wealth effect.
