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A Path to Sustainability for IDO Models
Most launchpads have only a single utility for their native token: earning allocation positions in pre-sales. Allocation positions are typically laid out in a tiered structure depending on how many tokens the person has staked, with higher tiers having a larger chance of receiving IDO allocation as well as a larger capital allocation amount.
The issue with this model is accessibility. As the value of the token rises as well as the market cap, the tiers can start getting fairly expensive; for example, some entry-level IDO tiers in bull market settings can be $20k USD for a $100 allocation in a new project. This is not sustainable or scaleable over time and creates conditions where only a small number of people have the capital to access new projects.
Then, early participants want to take profit, new participants can’t afford to get in, and when the launches slow down due to market conditions, combined with token emissions starting to unlock, it all unravels fairly fast. For this reason, many launchpads struggle to get above a $500M market cap on their native token.
At the same time, launchpads need a high amount of tokens staked per user in order to be successful at generating engagement and capital for new projects. A higher number of tokens staked means that participants have “skin in the game” and are more likely to participate in launches.
An IDO launchpad could increase the size of the funding rounds as well as the number of allocated spots to combat the whale-heavy nature of IDO participation. This likely has to be done anyway as its customer base grows. But it’s not a long-term solution to the systemic issue of accessibility, as the size of funding rounds depends on market conditions and project requirements.
How can an IDO launchpad build sustainable, powerful interest in its native token, and thus build a bigger user base for projects that use it for their IDO?
Create a system where launchpad participants continuously gain value from holding, staking, and participating in transactions involving the native token. Here are just a few of our methods:
- A robust ecosystem of project launch-related dApps where the token has uses across a family of platforms & products.
- A time-locked staking model with an early exit option through an NFT, so holders can access liquidity when they want it
- Give stakers the ability to choose between an exposure to yield or to IDO participation
- Boosted chances for IDO participation for TOKENNAME holders with active on-chain history and engagement on social & in the Eclipse community.
- Deploy an improved IDO allocation distribution model that gives all participants a fairer shot at getting early access to projects even at smaller capital allocation levels.
- A UX experience that is novice-friendly and accessible from cross-chain. It’s our aim that these features will expand the launchpad’s community while giving more people access to a fair chance to participate in IDO rounds.