From "Whoever pays gets it" to "Only for the right people": The next-generation Launchpad is reshuffling
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From "Whoever pays gets it" to "Only for the right people": The next-generation Launchpad is reshuffling
Select investors who align with the project's vision.
Navigating Web3 tides with focused insightsAuthor: Nishil Jain
Translation: Block unicorn
Introduction
ICOs are back, and various launchpads are rushing in to grab a share.
In October, Coinbase acquired Echo and launched its token sales platform earlier this month; in September, Kraken partnered with Legion. Meanwhile, Binance is closely tied to Buildlpad, while PumpFun is experimenting with launching utility tokens through Spotlight.
These developments come as investor interest and trust in ICOs are rebounding.
Umbra Privacy raised $156 million on MetaDAO against a $750,000 target, while Yieldbasis was oversubscribed 98x on Legion within less than a day. Aria Protocol was oversubscribed 20x on Buildpad, attracting over 30,000 users.
As ICOs begin raising funds at multiples of their issue prices, filtering out the noise becomes crucial.
In our previous article "Capital Formation in Crypto," Saurabh explained how capital formation in crypto has evolved. He explored how new funding models like Flying Tulip's investment structure and MetaDAO's ICO attempt to resolve potential misalignments between teams, investors, and users. Each new model claims to better align stakeholder incentives.
While the success of these models remains to be seen, we observe launchpads trying different approaches to address tensions among investors, users, and teams. They enable project teams to handpick investors during public token sales, thus curating their cap table.
In today’s article, I’ll walk you through why and how investor selection happens.
From First-Come-First-Served to Curated Holders
Between 2017 and 2019, ICO investments mostly followed a first-come-first-served (FCFS) model, where investors rushed in to secure allocations at low valuations, often aiming for quick profits shortly after launch. Research on over 300 ICOs shows that 30% of investors exited within the first month after launch.
While quick returns will always tempt investors, project teams have no obligation to accept every wallet reaching out. Visionary teams should be able to choose their ICO participants, filtering for investors committed to long-term growth.
Here’s Ditto from Eigencloud discussing the shift from FCFS sales to community-centric sale systems.
The problem with this ICO cycle is that it ends up in a "lemons market." Too many ICOs emerge, including scams and traps, making it hard to distinguish quality projects from poor ones.
Launchpad platforms cannot strictly vet all listed projects, leading to low investor trust in ICOs. Ultimately, the number of ICOs surges, but there isn't enough capital willing to support them all.
Now, the tide seems to be turning again.
Cobie’s fundraising platform Echo has raised $200 million for over 300 projects since launch. Meanwhile, in standalone fundraising events, we’ve seen millions of dollars snapped up within minutes. Pump.fun successfully completed an ICO, raising $500 million in under 12 minutes; Plasma raised $373 million for its XPL public sale against a $50 million target.
This shift is evident not only in token launches but also in the launchpads themselves. Emerging platforms like Legion, Umbra, and Echo promise founders and investors greater transparency, clearer mechanisms, and more thoughtful structures. They are eliminating information asymmetry, enabling investors to differentiate strong projects from weak ones. Today, investors can clearly see project valuations, funding amounts, and other details, helping them avoid getting trapped in poorly structured offerings.
This is bringing capital back into ICO investing, with project subscriptions far exceeding expectations.
New-generation launchpads are also building investment communities aligned with a project’s long-term vision.
After acquiring Echo, Coinbase announced its own token sale platform, emphasizing user qualification based on alignment with the platform. Currently, they achieve this by tracking users’ token selling patterns. Users who sell tokens within 30 days of a sale receive lower allocation weights, and more alignment metrics will be released soon.
This shift toward community-centric distribution is clearly reflected in the carefully designed airdrop plans of Monad and the ICO allocation strategy of MegaETH—both centered around community members.
MegaETH saw approximately 28x oversubscription. The project required users to link their social media profiles and wallets to on-chain history to identify token holders deemed most aligned with the project’s ethos.
This is the transformation we’re witnessing: when capital for ICO participation becomes abundant again, projects need to decide who gets funded. Next-gen launchpads exist precisely to solve this problem.
The Next Generation of Launchpads
Platforms such as Legion, Buildlpad, MetaDAO, and Kaito are emerging as representatives of the new generation of launchpads. The first step is vetting ICO projects to ensure investor trust in the launchpad; the next is vetting participating investors to ensure capital allocation meets project standards.
Legion follows a performance-driven distribution philosophy, offering the most comprehensive community member ranking system. The platform has successfully completed 17 token launches, with the latest one seeing nearly 100x oversubscription.
To ensure tokens reach the right hands during oversubscribed sales, each participant receives a Legion Score, which evaluates their cross-protocol on-chain activity, developer credentials (e.g., GitHub contributions), social influence, network reach, and qualitative statements about their intended contribution to the project.
Founders launching on Legion can select and weight allocation criteria such as developer engagement, social influence, KOL (key opinion leader) participation, or community education contributions.
Kaito takes a more targeted approach, allocating part of the supply to active "speakers" on Twitter discussions. Engagement is weighted by user voting reputation, speech impact, amount of $KAITO staked, and rarity of Genesis NFTs. Project teams can choose from these prioritized supporter types.
Kaito’s model helps projects attract influential social media participants as early investors—an especially useful strategy for projects heavily reliant on initial exposure.
Buidlpad centers around capital-based allocation. The more funds a user stakes, the more tokens they receive in a token sale. However, this also means only well-funded wallets can participate.
To balance this capital-centric model, Buidlpad introduced a "team system" that rewards leaderboard points and additional bonuses for community activities such as content creation, educational outreach, and social promotion.
Among these four launchpads, MetaDAO stands out as the most unique. Funds raised through MetaDAO ICOs are held in an on-chain treasury and governed via a market-based mechanism called Futarchy. Futarchy involves futures trading on the underlying token, but trades are based on governance decisions rather than price.
All raised funds reside in an on-chain treasury, with every expenditure validated through conditional markets. Teams must propose how they intend to use funds, and token holders bet on whether those actions will create value. Only if the market reaches consensus does the transaction proceed.
Investor participation in MetaDAO ICOs is permissionless and fully open, with each investor receiving token allocations proportional to their contribution. However, community building and alignment of interests happen post-ICO. Each proposal in Futarchy becomes a market, allowing traders to sell tokens if a proposal passes or buy more. Thus, the holder base forms dynamically based on final outcomes.
Although this article focuses on curated allocation schemes, from a project team’s perspective, many other factors must be considered before launching an ICO—such as project vetting standards, founder flexibility, platform fees, and post-launch support. The comparison table below provides a clear overview of all these factors.
Web3 can unite users, traders, and contributors through incentive mechanisms built on verifiable reputation systems. Without proper mechanisms to filter out bad actors or attract the right participants, most community token sales will remain immature, filled with mixed groups of believers and non-believers. Current launchpads offer teams an opportunity to improve token economics and take the right first step.
Projects need tools to identify suitable users within ecosystems and reward their actual contributions. This includes influential users backed by active communities, as well as founders or builders creating practical applications and experiences for others. These groups play a vital role in driving ecosystem growth and should be incentivized for long-term retention.
If current momentum continues, next-generation launchpads may finally solve the community bootstrapping problem—one that airdrops have so far failed to address.
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