The cryptocurrency market has fallen from its peak for more than a year, and investors have chosen to liquidate their positions and leave the market, while others have left the crypto market and chosen other tracks. In fact, in 2023, crypto assets are one of the best performing investment targets. According to CoinMarketCap data, the total market value of the crypto market has risen from a low of $780.9 billion to $1,163.1 billion today.
It is undeniable that the crypto market is still in a bear market. Similar to the previous bear market, the hot investment sectors in the crypto market switch rapidly, and different sectors rise and fall one after another. The difference is that few people review the past market conditions, especially IEO, which was once popular in the bear market.
Compared to the various ways to make money in a bull market, IEO is popular in a bear market because it can provide more stable and deterministic profits. Binance CEO CZ even tweeted “When Launchpad?”
BlockBeats will explore how much value Binance Launchpad can bring to the industry and users in this bear market, as well as the overlooked rules.
17 IEOs, with an average increase of 1458%
Since the beginning of 2021, Binance Launchpad has conducted a total of 17 IEOs. In order to better analyze the returns of the projects, all projects use USDT trading pairs as the standard (the overall data will be slightly higher than the BNB trading pairs). The first-day increase is calculated based on the UTC+0 closing price. The maximum increase does not include the highest price caused by the sharp price fluctuations within one hour of listing.
According to statistics, the average first-day increase of Binance Launchpad’s nearly 17 IEOs reached 1458%, and the average highest increase reached 5240%. Among them, BETA and GMT achieved the highest first-day increase and the largest increase in history with increases of 5283% and 41686% respectively.
Projects with lower starting issue prices are likely to see higher increases
After sorting the starting issue prices of 17 projects, BlockBeats found that there is a strong negative correlation between the issue price and the first-day increase and the maximum historical increase. Projects with lower starting issue prices are more likely to achieve higher increases.
In fact, the higher increase in low-priced tokens may be due to the collective behavior of retail investors. The preference for low-priced tokens is not unique to the crypto industry, but is also common in other investment markets. Richard Thaler, the 2017 Nobel Prize winner in Economics, summarized this behavior as early as 1980 and proposed the "mental account" summary.
Buying on the first day of closing and selling on the next day can both make a profit, but the market style is changing
When IEO projects are first launched, they often experience violent fluctuations and price distortion, so the highest price point generated within 1 hour after the launch is excluded from the calculation. The UTC+0 time point (the first day closing price used in this article) is a new day or new K-line game point generally accepted by the market, so the price here has sufficient liquidity and trading volume for users to trade.
Currently, all 17 IEO projects have the opportunity to make a profit in the subsequent market after buying at the first UTC+0 time point after going online, but the profit margins vary greatly. For example, TKO has the smallest profit margin, only 0.15%. GMT has the largest profit margin of 3051%. Therefore, we can draw a conclusion that there is no direct connection between the performance of IEO projects on the first day and their subsequent performance.
However, as an ordinary investor, the amount of money to participate in IEO is limited. How to maximize the investment income of IEO? In other words, when is the best time to buy and sell IEO? To study this problem, the parameter of the time from the launch of IEO project to the maximum income is introduced.
After introducing the parameter of "holding time to obtain maximum return", it can be clearly found that Binance Launchpad has a significant style transformation. Before PORTO's IEO, 6 out of 9 IEO projects reached their historical highest prices the day after they went online. PORTO is the fan token of Portugal's FC Porto. It reached its current historical high 275 days after its IEO. The main reason for this is the hype of the 2022 World Cup, and a large number of investors bought fan tokens.
After comparing the yields of projects before and after PORTO, we found that there was a big gap. After deducting PORTO, the overall average yield of 16 IEO projects was 311.46%. The average yield of the 9 projects before PORTO was 153.09%, while the average yield of the 7 projects after PORTO was 515.07%.
There may be coincidences or a change in market style, but judging from the data, compared with the previous subscription and selling model after listing, holding for a period of time may result in higher returns.
Binance Launchpad Preference Changes
After entering the bear market, the market style changed, and Binance's style seemed to have changed as well. This change seemed to be inseparable from GMT, the most successful project of Binance Launchpad in recent years.
GMT is a governance token issued by STEPN. STEPN is a Web3 application that focuses on Move to Earn. According to Dune Analytics user 0xpineapple's previous statistics, GMT had already begun to become a popular application before it was announced to become Binance Launchpad, and the launch of Binance Launchpad accelerated this process.
After GMT, Binance suspended IEO for 9 months. After studying the IEO projects after GMT, BlockBeats found that these types of projects had achieved remarkable results before becoming Binance Launchpad. And they accelerated their development after being listed on Binance Launchpad.
HOOK
HOOK is the governance token issued by Hooked Protocol, which is the Web3 infrastructure that provides Learn and Earn. Hooked Protocol's first product is Wild Cash, which provides Quiz to Earn. Before listing on Binance Launchpad, Wild Cash ranked first in the Google Play rankings in Indonesia, Nigeria and other countries, and has accumulated 4 million downloads worldwide.
After being launched on Binance Launchpad, Wild Cash’s global downloads exceeded 10 million times, and the Google Play platform alone has accumulated more than 5 million downloads.
In addition, Hooked has become the second-largest application in terms of daily active users (DAU) on BNB Chain in the long term, second only to USDT.
ID
ID is a governance token issued by the decentralized domain name service protocol SPACE ID. Before joining Binance Launchpad, 418,000 ".bnb" domain names were registered, second only to ENS (Ethereum Name Service) in the field of decentralized domain names.
Driven by Binance Launchpad, the number of ".bnb" domain name registrations reached 795,000, an increase of 90.1%, and the number of holding addresses also increased by 158.9%, narrowing the gap with ENS. After that, SPACE ID also launched the ".arb" domain name service on the Arbitrum network, and currently 288,000 domain names have been registered.
EDU
EDU is a governance token issued by the decentralized Web3 educational content platform Open Campus. Open Campus's first application, TinyTap, was founded in 2012 and became a subsidiary of Animoca Brands in June 2022, when Animoca Brands acquired 84% of its shares for US$38.9 million.
TinyTap was already a popular edtech company before joining Binance Launchpad. TinyTap has 9.2 million registered users, 120,000 registered users, 15,000 active creators, and 230,000 interactive courses.
After joining Binance Launchpad, Open Campus did not directly gain data growth. After all, education itself is something that requires long-term persistence. However, it also gained something. Venture capital firms such as Sequoia China, Kingsway, Liberty City Ventures, and Polygon paid attention to this track and invested $8.5 million in Open Campus. According to official news, Open Campus has launched a $10 million global educator fund to provide funding to educators who create content.
From the three projects of HOOK, ID, and EDU, we can see that Binance's preferences are changing, which is also reflected in the market. In terms of overall yield, the average increase and the maximum average increase of the first day of the three IEO projects after GMT far exceeded the previous 13.
Binance Launchpad is still the best investment target in the bear market
After analyzing the projects launched on Binance Launchpad over the past two years, we can find that market preferences, user preferences, and platform preferences are changing over time. This is caused by changes in the external macro environment as well as internal reasons within the crypto market.
As for the crypto market, it is still in a bear market, with declining capital activity and a preference for short-term hot spots. However, the Binance Launchpad project has produced a different style change than before, and a longer holding period may yield higher returns. Investors should have enough patience for innovative and experimental projects such as HOOK and EDU. As a project that chooses to issue tokens during a market downturn, it must have the ability and consideration to continue to build.
Compared with previous projects, recent IEO projects are of higher quality and have higher average returns, but perhaps due to the huge return of GMT 41686%, the returns of HOOK 4000%, ID 4100%, and EDU 3290% are not as impressive. However, it is obviously unreasonable to compare with projects like GMT that affect the entire industry or even outside the industry.
In fact, in the current environment, data shows that Binance Launchpad is still the best investment target in the bear market.