Launchpads: The Good and the Bad

I thought this was a good take on Camelot’s business model.

First off, launchpads are an obvious cash cow. The platform takes a piece of funds raised from the protocol and drives attention to its product/token by offering market participants the shiniest new thing. Maybe you even gate access to the launchpad with your own token. And voila, a token sink has been achieved — short-term.

But they’re also a really fragile business. In the sense that the quality of the project pipeline is essential for them to stay alive. And the second they lose that, they lose all relevancy. It’s also very likely that at some point the platform lists a….questionable project. And the end result is a tumultuous downfall and widespread loss of trust. We’ve seen this play out with platforms like Copper.

The core launchpad business model seems to have an extremely short life span. They have huge ups and downs over a short period of time. The influx of attention and speculation is met by loss of the same at a similar magnitude.

What Camelot has done differently is integrate a core DEX into the launchpad model. So they create a venue for on-chain projects to raise funds, and they also lock these protocols (and their token holders) into using the Camelot AMM to house liquidity. They benefit from the raise and post-raise speculation as well. And that’s probably a sounder GTM strategy over trying to steal ETH and stablecoin trading market share away from Uniswap or Curve.

I still think launchpads are a big red flag. They have proven to be very short-term plays with no longevity owing to the quality of projects that tend to use these platforms. But it’s also tough to deny that Camelot has been pretty smart with how they’ve modified the launchpad biz model and are trying to lock in attention for a longer time frame.

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