Binance Launchpad vs. Binance Launchpool: Key Differences Explained

Launching or investing in a new crypto project can be tricky business. Whether you’re an investor or developer, there are so many platforms and options to choose from these days that it’s hard to pick a winner.

Binance, one of the largest global crypto exchanges, offers project teams two popular options to launch their tokens: Launchpad and Launchpool. Both aim to help new blockchain projects raise capital and gain exposure among investors, but they go about it in different ways.

What Is Binance Launchpad?

Binance Launchpad is a platform that helps launch new cryptocurrency projects in a fair and open way.

In the crypto realm, launchpads (also known as incubators) make it possible for infant projects and tokens to grow. A typical launchpad will allow new projects to showcase themselves to investors and sell early-access tokens in order to raise funding. The lure for investors is the chance of making big gains when the token’s value hopefully begins to increase as the project’s popularity grows.

This is what Binance Launchpad offers users, and it works in a pretty simple way.

If you’re looking to invest, there’s first a calculation period where Binance looks at your average BNB balance over a set number of days to determine your participation limit. This determines the maximum amount of project tokens you can get. You don’t have to do anything with your BNB during this time; just hold it in your account.

Once the calculation period ends, there’s a subscription period where you can commit up to your participation limit of BNB to buy the new token. This locks in your BNB in a separate Launchpad wallet until the allocation phase.

After the subscription period ends, Binance figures out everybody’s final token allocation based on how much BNB they committed. If there’s lots of demand, they’ll lower allocations to stay under the overall cap for the coin. Once allocations are set, the BNB you committed gets automatically traded for the new tokens.

Any leftover BNB, along with your new tokens, are then sent to your spot wallet.

Some key things to keep in mind about Binance Launchpad:

• You don’t have to “stake” or lock up your BNB during the calculation period.
• You can keep your BNB in products like Launchpool and BNB Vault, which will still count towards your limit.
• Once you commit your BNB during the subscription period, it gets locked up until the allocation is complete.
• There’s usually a hard cap or maximum amount of tokens each user can get to keep it fair.
• The minimum amount of BNB you can commit is 0.1 BNB.

Binance Launchpad used to be a lottery system, but now it’s based on your average holdings, which is not too complicated. Just commit your BNB when the time comes, and be ready to receive your allotted tokens.

Some of the biggest success stories from Binance Launchpad are Axie Infinity, Elrond, and Celer Network. Folks who got in early made a lot of money from these projects. Of course, there’s no guarantee that a given project will succeed via Binance Launchpad, but the platform gives developers a solid shot at major gains.

What Is Binance Launchpool?

In contrast to Launchpad, Binance Launchpool lets users farm (earn) rewards by staking BNB, BUSD, and other supported tokens. Basically, it’s a way to get your hands on some newly launched coins without having to buy them.

Here’s how it works:

When a new crypto project wants to distribute its tokens, it can partner with Binance Launchpool. Binance will then allow its users to stake BNB, BUSD, and other eligible tokens in a separate pool for that project.

For example, let’s say NewCryptoCoin is launching and doing a Launchpool with BNB. You can stake your BNB in the NewCryptoCoin BNB pool. While your BNB is staked, you’ll earn NewCryptoCoin tokens as rewards.

The more and longer you stake, the bigger your share of the rewards. So, if you can lock up your BNB for the full staking period (usually around 30 days), you can maximize your earnings.

Some key things to keep in mind about Binance Launchpool:

• You need a verified Binance account.
• The minimum to stake is 0.1 of an eligible coin.
• Rewards accrue hourly and auto-compound.
• You can stake, un-stake, or add to your position anytime.
• Reward tokens are tradeable on Binance after the initial farming period.

Some successful tokens distributed on Launchpool include REEF, LIT, UNFI, and ATM.

Factors to Consider in Choosing Between Binance’s Launchpad or Launchpool

Launchpad and Launchpool on Binance allow you to get involved with exciting new crypto projects. And since Binance backs them, you know they’ve got some real credibility.

But there’s lots to think about when deciding between these two services. Let’s discuss some of these important factors.

1. Accessibility

Launchpool is way more accessible than Launchpad, as you just need some tokens to stake, and you’re good to go. Launchpad, on the other hand, requires you to commit an amount of your BNB for a set period of time to be eligible for the allocation of new tokens.

So, Launchpool is better if you’re looking for something easy to get into.

2. Potential Rewards

Launchpad token sales tend to be more hype-driven, with most new tokens seeing a quick pump after launch. So you can potentially make some fat stacks in a short period of time.

With Launchpool, rewards are distributed over time through farming, so it’s more of a slow burn.

3. Locked Funds

With Launchpad, your BNB is locked up for a while before you buy and are allotted tokens. With Launchpool, you can un-stake your pooled assets anytime.

So, if you want flexibility, Launchpool is less of a commitment.

4. Technical Know-How

Launchpool is simpler if you just want to stake and earn. Launchpad requires more technical knowledge, as it involves managing cryptocurrency wallets, committing BNB, tracking allocation limits, and so on.

This is another win for Launchpool, as it is a bit simpler for crypto newbies.

6. Risk

Due to hype and limited supply, tokens sold on Binance Launchpad often see dramatic gains in price as they start trading. However, declines have followed the spikes as early investors take profits or in cases where tokens have lost value after they start trading on exchanges. When you invest via Binance Launchpad, you’re taking a gamble.

Meanwhile, for a safer, more passive approach, Launchpool allows you to earn new tokens over time just for holding BNB or other coins. So, there is less risk, but also less explosive growth potential.

Binance Offers Two Different Paths to New Token Rewards

Binance gives crypto projects two solid options for getting off the ground—Launchpad and Launchpool.

Launchpad is ideal for seasoned crypto investors who want active participation in promising new token sales. Users commit BNB during a set subscription period in order to secure an allocation of the new token. The more BNB committed, the greater the token reward. Launchpad requires confidence across multiple steps, like managing BNB transfers and tracking allocation limits. The rewards can be high but also carry higher risk.

In contrast, Launchpool allows more passive earning of new tokens by staking BNB or other coins in liquidity pools over time. Users don’t have to monitor timing or limits. Just stake and earn! The barrier to entry is lower for beginners. While rewards are more consistent, they may not be as high as Launchpad for the hottest projects.

At the end of the day, it’s important to assess your risk tolerance and how active you want to be in the process. Do a little homework on each new project, too. Pick ones aligned with your crypto investing strategy.

Make Sure You Know the Differences Between These Binance Services

Binance Launchpad and Launchpool both offer some great tools for crypto traders and investors. If you’re big into DeFi and new tokens, this is especially true.

Just make sure you know exactly what each service offers before getting started, and keep in mind the important differences between them.