The Need for a Better Token Launch Platform

Token funding options for projects are limited, and there's too much focus on short term gains

Like any emerging industry, significant innovations often undergo numerous cycles of iteration and trial and error before finding a successful formula. The concept of token funding in the web3 space arguably began with the introduction of ICOs in 2017. While ICOs enabled many great projects that still thrive today to launch, they were also marred by a high incidence of scams and dubious mechanisms, leading to substantial financial losses for their contributors.

In recent years, the predominant method for web3 projects to fund their development has involved securing funds from venture capitalists (VCs) through one or several pre-sale rounds before conducting a public sale of their token, typically through a launchpad, in what is known as an IDO. The web3 space is home to numerous great VCs and a variety of launchpads. However, relying solely on this model for raising funds can potentially hinder the growth of some remarkable initiatives.

Web3 presents an opportunity to democratize investment and make it accessible to the wider community. However, so far these efforts have largely been limited to the public sale phase. While VCs play a crucial role in catalyzing growth during the early stages, they often have specific preferences for some narratives and a concrete thesis they support. Although there are indeed pioneering VCs in web3, the majority tend to seek projects that promise substantial financial returns in the short to medium term, focusing on business models that are already established and tested. This approach may not always align with the long-term success of the projects or the interests of their communities, and be too narrow for a fast-evolving space like web3.

Launchpads have become a popular method for conducting public token launches. Since 2020, over 3,000 projects have been launched via launchpads across 95 different platforms, raising more than $1.9 billion [1]. However, the mechanics of most launchpads are designed to encourage a short-term spike in price to generate as much attention and fear of missing out (FOMO) as possible. This strategy does not guarantee a healthy distribution of tokens among community members, often resulting in a sharp increase in price at launch followed by a decline in both price and market capitalization over time. Below is an ROI analysis of all projects launched from the top 20 launchpads since 2020 by volume of IDOs:

The above, is the result of platform mechanics designed to attract opportunistic traders, rather than incentivizing a project's community to support a project in the longer term and share responsibility and incentives for their growth.

We think there is a better way of supporting token launches in web3 across all stages, and that way is citizend!

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[1] Data from https://cryptorank.io/fundraising-platforms