How to Use Binance Launchpad and Binance Launchpool to Earn Cryptocurrencies?

Introduction to Binance Launchpad and Launchpool

Binance Launchpad and Launchpool are two ways to leverage user cryptocurrencies by generating yield.

While they both have similarities in how they work, the first will focus on the launch of new tokenswhile the second will be centered on existing cryptocurrencies and making their arrival on the Binance platform.

For both, Binance usually sends an email to its users before the start of each new Launchpad or new Launchpool, and also announces it on its social networks.

Now let’s see in detail how these two products work, which first of all require to have a verified account on Binance and then to own BNB tokens.

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Introducing the Binance Launchpad

The Launchpad is the platform for launching new tokens on Binance. It is actually a sale made by the project, which will allocate a share of its tokens to the Binance community, at a preferential price.

These launchpads are broken down into several phases:

• The BNB holding calculation period;
• The subscription period;
• The calculation period;
• The distribution of tokens.

We will explain each of these points, but in summary, an investor will have the right to buy a certain number of these new tokensthe amount of which will be determined according to the BNB deposited in its Binance account, the number of participants in this Launchpad and the quantity of tokens offered for sale by the project.

In short, the more BNB an investor has and the fewer participants there will be, the greater his allocation will be, and vice versa.

In this case, any added value will be realized during the listing of this new token on Binance which allows the investor, when all goes well, to resell the more expensive tokens in his possession.

Use Binance Launchpad

After logging into your Binance account, find the Launchpad button from the “Passive Income” menu in the top banner. It will also be in this same menu that we will find the Launchpool, but we will come back to it later:

FFigure 1 — Accessing the Launchpad menu on Binance

After clicking on the Launchpad of your choice, you will find out the details of itsuch as the share allocated to Binance users, the sale price or the whitepaper of the project, as with the example below:

Figure 2 — Example of a project on Binance Launchpad

Then all Launchpad stages with their times are listed.

Normally, the French version of the Binance website is expressed according to Paris time. If in doubt, you can click on “See detailed rules” in the example in figure 2, the times are expressed in the UTC ±0 time zone and it will then suffice to convert them according to your own geographical area.

For launchpads, Binance will count all the BNB you have on the platform in order to establish a daily average over the entire holding calculation period :

Figure 3 — Timeline of a Launchpad on Binance

At the end of the holding calculation period, you can deposit the amount of BNB eligible for this Launchpad. In the example above, you have a window of 3 hours to perform the operation.

Then, a calculation period will determine your allowance, which will automatically convert a portion of your BNB to the token sold.

Let’s illustrate this with arbitrary data: during the entire holding calculation period, you had 1 BNB in ​​your Binance account. During the subscription period, as your average is therefore 1 and you deposit this BNB in ​​the Launchpad. Then comes the calculation period, which, depending on the number of participants, will have determined that you can buy 10 dollars of this new token.

On this BNB deposited in the Launchpad, 10 dollars will then be automatically converted to buy said token at the sale price announced upstream.

Afterwards, these tokens will be deposited in your spot account during the final distribution, which will also release your remaining amount of BNB. When listing this new asset on Binance, you can then decide to sell it or keep it if you think it is an interesting investment.

What are the risks of Binance Launchpad?

Besides the risk of Binance going bankrupt which is inherent in any exchange, there are a few things to consider before jumping into the Launchpad.

The first is that if you want to participate while you do not have BNB, keep in mind that the latter can evolve downwards. This means that the amount of new tokens acquired during the Launchpad might not be enough to repay your losses.

If you already own BNB, the risk is much more limited, as its price volatility is not meant to affect you any more than it already does. But who says limited risk does not mean non-existent risk. Indeed, when the new token will be listed, it is possible that its price will fall below the price at which it was sold to you.

Although in general, a Launchpad is profitable on Binance, this is by no means a certainty, and it must be integrated into its risk management.

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Introducing Binance Launchpool

Binance Launchpool has some similarities to Launchpad, but it concerns tokens already launched on the market. Typically, a project’s Tokenomics earmarks a portion of their tokens for community incentives. Said project will therefore draw on this share in order to establish a partnership with Binance and promote it.

Unlike tokens launched via the Binance Launchpad, it is usually possible to participate with several different cryptocurrencies in the Launchpool. Take the case of a project deployed on Avalanche (AVAX), then it is quite possible that the Binance Launchpool offers returns by allowing the deposit of AVAX and BNB. Accepted cryptocurrencies will depend on each Launchpool.

During these operations, it is also important to note that cryptocurrencies deposited in liquidity pools are not sold. So if you deposit 1 BNB, you get back 1 BNB whenever you want.

The quantity of tokens received will therefore depend on two things: the quantity allocated to the pool where you deposit your cryptocurrencies and the value of all the cryptocurrencies deposited.

Use Binance Launchpool

To use the Binance Launchpool, you have to go to the exact same menu as for the Launchpad in figure 1.

Although the duration of a Launchpool is variable, it is often fixed at 30 days. During this period, you will be free to enter or leave the different pools as you wishthe rewards being distributed at regular intervals during the day: for example, every hour.

The illustration below shows the Radiant Protocol Launchpool. This one was scheduled for 40 days and there were just over 16 left at the time of this writing. We can see that with the price of RDNT and the value of deposits at that time, the TUSD pool was yielding the equivalent of 4.60% per year, compared to 1.46% for BNB:

Figure 4 — Example of a Launchpool on Binance

For each Launchpool, a fixed amount of tokens is distributed to investors every day and is shared in different ways on each pool. In the case of the RDNT above, for example, 12 million tokens were allocated to the BNB pool against 3 million for the TUST, which gives 80% on one side against 20% on the other.

The amount of tokens earned by an investor will therefore depend on this factor and the weight he weighs in said pool.

The data relating to the allocation of each pool as well as all the information specific to each Launchpool can be found in the “Detailed rules” tab, as shown in Figure 2.

Also, note that investors with their BNB deposited in the Binance Vault automatically receive returns from the BNB Pool.

What are the risks of Binance Launchpool?

As with the Binance Launchpad, the risks of the Launchpool will mainly relate to the potential devaluation of cryptocurrencies deposited in the pools if you had to buy some for the occasion.

Moreover, provided you already own the crypto-assets concerned, the Binance Launchpool does not involve other financial investments because it is a distribution of tokens. However, these usually offer low returns.

In a way, this profitability is still “free money”, but if you have a small wallet, it is quite likely that you cannot acquire enough tokens to sell them conventionally on Binance. You will then have to use the “Convert low-value assets into BNB” option in your spot account if you want to get rid of it.

Our opinion on Binance Launchpad and Binance Launchpool

As we have seen, Binance’s Launchpad and Launchpool are easy ways to leverage cryptocurrencies you already own.

However, there are some risks to consider if you have to buy these cryptocurrencies just to participate in these events. Moreover, it is also possible that you will find better returns for said assets elsewhere than on Binance.

As with any investment, there are a number of pros and cons to consider.

Nevertheless, Binance Launchpad and Launchpool are tools to keep on hand when available, because they can fit perfectly into your strategy to grow your crypto portfolio over time. Also, newbies will find it an intuitive way to get started with crypto yield products in a centralized environment.

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