Can Launchpool Be a New Fundraising Platform For Startups?
Before you launch any startup, first, you will need to have a secure source of capital. Without proper funds, you can’t expect to even move an inch in a business. All of you might already be well-acquainted with the direct sources such as taking loans, approaching a venture capitalist, and so on. However, in this article, we will talk about one of the best passive sources of income out there for startups, so stay with us till the end.
What is Launchpool?
At first, initial coin offerings (ICOs), were among the primary choice for developers if they wanted to raise funds for a particular project. However, later ICOs started to attract a lot of scammers, which made them unreliable.
Apart from that their framework mostly favored the larger investors, whereas the smaller investors wouldn’t get much of the benefits. So, to deal with this several crowdfunding models came out in the market, one of which was launch pool.
Launchpool is a platform that allows its users to raise funds, by letting them invest their cryptocurrencies within a capital pool. Once they have invested their crypto coins, they can get a good interest on their deposit, which makes it an ideal choice for both the investors as well as the project.
How Does Launchpool Work?
The working mechanism of the launch pool is quite simple. The platform allows its users to invest their money as a collection of funds, which is also referred to as the liquidity pool. And, depending on the amount they have invested, they get an interest in return. The interest rates depend on the annual percentage yield (APY).
In the APY calculation approach, the interest amounts were decided on the basis of compounding. This implies that after every interval, the interest amount gets a bit bigger than before.
How Do You Earn?
The majority of launchpools include hourly rewards calculations and a lock-in duration of 7 to 30 days. Your benefits (Your new tokens) will directly depend on the number of tokens you invested earlier in a particular pool.
You can also find some launch tools that let their users invest even on the seventh of the farming cycle. This basically implies you can exchange the tokens you have gathered as a reward for your stakings. Apart from that, you will also get a clear notification of earnings every hour.
Advantages of Launchpools
Launch Pools are very practical and secure. The majority of the time, they are planned by centralized exchanges that carefully review the proposal before establishing the launch pool. As a result, the likelihood of rug pulls and other scams are greatly decreased.
Apart from that, they can also be quite convenient, as they can provide you with all the perks of stakings without having to worry much about pitfalls. For example, you won’t have to worry about the minimum deposit amount, as it will allow you to deposit as low as 0.1 of any available token. And, obviously, there’s no upper limit. It means you can invest as many tokens as you wish.
This gives it an edge over staking as it usually has a minimum investment requirement. For instance, for staking Ethereum tokens, the minimum investment is around 32 ETH, and considering its value it’s quite a big amount. Apart from that, the returns are not that great.
Additionally, unlike staking pools, users don’t need to make a special effort to invest in a cryptocurrency project thanks to launching pools. They can stake their shares via any trading app or online, which will help them save a lot of time.
Staking can be a pretty good source of passive income, but it has a few drawbacks that can’t be overlooked. As we have mentioned earlier, for some high-value coins such as Ethereum, the minimum staking requirement amount can be quite big. Considering its low return, it’s not really worth the trouble. Apart from that, while staking the investor have to lock their coins for a specific amount of time, which means they can’t use them in that timeframe.
Therefore, considering all these problems, crowdfunding platforms such as launch polls will act as a better alternative compared to staking. It gives you the complete freedom to invest and withdraw your coins whenever you want, with no minimum required amount and better returns. So, make sure to try out launch pools and build a reliable source of passive income for your business!