What is Fair Launch? Fair Launch is a form of token deployment that ensures fairness for all participants in buying and selling and supporting the project. It can be said that Fair Launch has accompanied the crypto market in the early days. So, if there’s anything interesting about Fair Launch, let’s find out in the article below.
What is Fair Launch?
Market context
Everyone in the world always craves fairness and the same situation occurs in the crypto market. In fact, Fair Launch has been around since the early days with Bitcoin, but it only really exploded after the ICO event and the appearance of so many VCs in the community.
Mostly, most projects in the crypto market call for capital from VCs in return for VCs buying a large amount of tokens at a low value. As for users, to have the right to buy a small amount of tokens at a low value, they have to do a lot of work or have to compete with each other, which is clearly not fair. Seeing that, many projects have implemented Fair Launch to bring fairness to all.
Note: The fact that VCs buy many tokens at low values means they face much more risk than retail investors. That’s why we need to have a profound perspective on everything.
Overview of Fair Launch
Fair Launch is a way of releasing new crypto to the community without anyone owning the crypto at any previous stage.. Fair Launch was born with a number of purposes such as:
- No one will have a better position than the rest, everyone shares the same starting line.
- Provide fairness in that the more you contribute to the protocol, the more you receive in reward.
- Fair Launch creates a huge incentive for the community to support early-stage projects.
Advantages of Fair Launch
Fair Launch possesses a number of advantages as follows:
- Everyone is equal, has the same opportunity for a completely new project.
- Retail investors do not need to worry about “selling out” by VCs or large Whales.
- Because the token is available to everyone, governance in the project is fairer and more transparent. Then we have a truly true DAO.
- Implementing Fair Launch makes it easy for the project to grow. TVL has its first users and revenue.
Disadvantages of Fair Launch
Besides the advantages, Fair Launch has some disadvantages as follows:
- The fact that the core team does not hold tokens can lead to the development team not being willing to go the long way with the project.
- Not dividing items in Allocation can lead to the project having no costs such as Marketing, Community Development,…
- Without VCs, if the project does not have a large amount of revenue from the beginning or does not have costs to maintain, it can easily lead to project failure in the future when the product is no longer attractive when incentives run out.
Some projects have implemented Fair Launch
Fair Launch was born with the crypto market, but for Fair Launch to truly stand out, it must be when DeFi explodes. We have a number of projects that have successfully implemented Fair Launch as follows:
- Bitcoin: This is the most successful case when applying Fair Launch when the entire amount of Bitcoin will be released during the process of establishing blocks into the blockchain, making it easier to understand that miners validating transactions will receive Bitcoin for each block. There are no shares for Satoshi or VCs.
- Dogecoin: This project also applies the same formula as Bitcoin, but Dogecoin’s success is mainly due to its godfather, Elon Musk.
- Yearn Finance: This is the project that makes Fair Launch truly explosive and popular in the crypto market later. Yearn is a Yield Farming platform built by Andre Cronje and some of his colleagues.
There have been many successful projects thanks to Fair Launch but also many failed projects from applying Fair Launch machinery. Besides, I firmly believe that Fair Launch will continue to stay and accompany the crypto market.
Fair Launch project evaluation criteria
Obviously there are a number of projects that have successfully implemented Fair Launch, so the common characteristics of those projects include:
- Core Team is the most important thing. The development team must be truly enthusiastic and passionate about the market in general and the project in particular. A new team that projects Fair Launch will be relatively difficult to succeed.
- The project must build a truly quality DAO including many capable individuals in different aspects such as Code, Marketing, DeFi OG, Farmer,… And must build values for the DAO to Let DAO develop the project together with the development team. Yearn & Bitcoin are manifestations of which conditions.
- The project must make a really good product to soon generate revenue to maintain and develop the project further. Yearn Finance is a prime example of understanding the market and creating a product that everyone needs.
Summary
Fair Launch will still be one of the forms of token issuance, a good direction for many projects with technological and financial capacity. Hopefully through this article everyone will understand what Fair Launch is?
