An in-depth explanation of Binance Launchpad: Is IEO still a good investment opportunity?

The cryptocurrency market has been in a downturn for over a year since its peak, and investors have the option to liquidate and exit, or leave the cryptocurrency market and choose other investment opportunities. In fact, in 2023, cryptocurrency assets are one of the best performing investment targets. According to CoinMarketCap data, the total market value of the cryptocurrency market has risen from a low of $780.9 billion to $1.1631 trillion today.

Undeniably, the cryptocurrency market is still in a bear market. Similar to previous bear markets, investment hotspots in the cryptocurrency market switch rapidly, with different sectors rising and falling. However, unlike before, few people have reviewed the past market trends, especially the IEOs that were popular during the bear market.

Compared to the bull market, there are many ways to profit in the cryptocurrency industry. IEOs are popular in bear markets because they can provide more stable and predictable profits. Binance CEO CZ even tweeted "When Launchpad?" in reference to IEOs.

BlockBeats will explore how much value Binance Launchpad can bring to the industry and users during this bear market cycle, as well as the patterns that have been overlooked by many.

17 IEOs with an average increase of 1458%

Starting from 2021, Binance Launchpad has conducted a total of 17 IEOs. In order to better analyze the return of projects, all projects are traded using USDT as the standard (overall data will be slightly higher than BNB trading pairs). The first-day increase is calculated based on the UTC+0 closing price, and the maximum increase does not include the highest price caused by the drastic price fluctuations within one hour of listing.

According to statistics, the average increase on the first day of Binance Launchpad's recent 17 IEOs was 1458%, with an average highest increase of 5240%. Among them, BETA and GMT achieved the highest first-day increase and historical maximum increase with increases of 5283% and 41686%, respectively.

Projects with lower initial issuance prices may have the potential for higher gains

After sorting the initial issue prices of 17 projects, BlockBeats found that there is a strong negative correlation between the issue price and the first-day increase and the historical maximum increase. Projects with lower initial issue prices are more likely to achieve higher increases.

In fact, the higher increase in low-priced tokens may be attributed to the collective behavior of retail investors. The preference for low-priced tokens is not unique to the cryptocurrency industry and is also common in other investment markets. Nobel laureate in economics Richard Thaler summarized and proposed the concept of "mental accounting" as early as 1980 to describe this behavior.

First-day closing buy and second-day selling can be profitable, but the market style is changing

When IEO projects are just launched, they often experience significant fluctuations and price distortions. Therefore, the highest price point generated within the first hour after the launch is excluded when calculating the price. The UTC+0 time point (i.e. the closing price on the first day used in this article) is widely accepted as the starting point for a new day or a new K-line in the market, so the price at this point has sufficient liquidity and trading volume for users to trade.

Currently, all 17 IEO projects have the opportunity to profit in the subsequent market after being purchased at the first UTC+0 time point after going online, but the difference in profit margins is huge. For example, TKO has the smallest profit margin, only 0.15%. The project with the largest profit margin, GMT, has 3051%. Therefore, it can be concluded that the performance of IEO projects on the first day and thereafter are not directly related.

However, as an ordinary investor, the amount of participation in IEO is limited. How to maximize the investment return of IEO? Or, when is the best time to buy and sell IEO for maximum profit? To study this issue, we introduce the parameter of time that IEO projects experience from launch to maximum profit.

After introducing the "maximum profit holding time" parameter, it is obvious that Binance Launchpad has undergone a significant style change. Before the IEO of PORTO, 6 out of 9 IEO projects reached their highest historical prices on the day after their launch. PORTO is a fan token of the Portuguese football club FC Porto, which reached its historical high 275 days after the IEO, mainly due to the hype surrounding the 2022 World Cup, with many investors buying fan tokens.

After comparing the returns of the PORTO project before and after, it was found that there is a significant difference. After deducting PORTO, the overall average return rate of 16 IEO projects is 311.46%. The average return rate of the first 9 projects before PORTO is 153.09%, while the average return rate of the 7 projects after PORTO can reach 515.07%.

There may be coincidences or a change in market style, but from the data, holding for a period of time may result in higher returns compared to the previous pattern of selling immediately after listing.

Binance Launchpad Preference Changes

After entering the bear market, the market style changed and Binance's style seems to have also undergone a transformation, which seems inseparable from GMT, the most successful project on Binance Launchpad in recent years.

GMT is a governance token issued by STEPN. STEPN is a Web3 application that focuses on Move to Earn. According to the statistics of 0xpineapple, a user of Dune Analytics, there was already a trend of becoming a popular application before GMT announced its participation in Binance Launchpad, and the launch on Binance Launchpad accelerated this process.

After GMT, Binance suspended IEO for up to 9 months. After researching the IEO projects after GMT, BlockBeats found that these types of projects had achieved remarkable results before becoming Binance Launchpad. And after being launched on Binance Launchpad, they accelerated their development.

HOOK

HOOK is the governance token issued by Hooked Protocol, which provides a Web3 infrastructure for learning and earning. The first product of Hooked Protocol is Wild Cash, which offers Quiz to Earn. Prior to its launch on Binance Launchpad, Wild Cash had already ranked first on Google Play charts in multiple countries such as Indonesia and Nigeria, and had been downloaded over 4 million times worldwide.

After launching on Binance Launchpad, Wild Cash's global downloads exceeded 10 million, with Google Play alone accumulating over 5 million downloads.

In addition, Hooked has also become the second most popular application in terms of daily active users (DAU) on the BNB Chain, second only to USDT.

ID

ID is the governance token issued by the decentralized domain name service protocol SPACE ID. Prior to joining Binance Launchpad, 418,000 ".bnb" domain names were registered, second only to ENS (Ethereum Name Service) in the decentralized domain name field.

With the promotion of Binance Launchpad, the number of registered ".bnb" domain names has reached 795,000, an increase of 90.1%, and the number of holding addresses has also increased by 158.9%. This has closed the gap with ENS. After that, SPACE ID also launched the ".arb" domain name service on the Arbitrum network, and currently, 288,000 domain names have been registered.

EDU

EDU is the governance token issued by the decentralized Web3 education content platform Open Campus. Open Campus' first application, TinyTap, was founded in 2012 and was acquired by Animoca Brands for $38.9 million in June 2022, with 84% of its shares being purchased, making it a subsidiary of Animoca Brands.

TinyTap was already a popular educational technology company before joining Binance Launchpad. TinyTap has 9.2 million registered users, 120,000 registered users and 15,000 active creators, as well as 230,000 interactive courses.

After joining Binance Launchpad, Open Campus did not immediately see growth in data. After all, education itself is something that requires long-term persistence. However, there were still gains, as venture capital firms such as Sequoia China, Kingsway, Liberty City Ventures, and Polygon invested $8.5 million in Open Campus. According to official sources, Open Campus has launched a $10 million global education worker fund to provide support to educational workers who create content.

From the three projects HOOK, ID, and EDU, we can see that Binance's preferences are undergoing changes, which is also reflected in the market. In terms of overall returns, the average and maximum first-day gains of the three IEO projects after GMT are far higher than the previous 13.

Binance Launchpad remains the best investment target in the bear market

After analyzing the projects launched on Binance Launchpad over the past two years, it can be observed that market preferences, user preferences, and platform preferences are all changing over time. This is due to both external macro-environmental changes and internal factors within the cryptocurrency market.

As far as the encryption market is concerned, it is still in a bear market with a decrease in fund activity and a preference for short-term hotspots. However, the Binance Launchpad project has produced a different style change, where a longer holding period may result in higher returns. For innovative and experimental projects such as HOOK and EDU, investors should have enough patience. As a project that chooses to issue tokens during a market downturn, it must have the ability and consideration to continue building.

Compared to previous projects, the quality of recent IEO projects is higher and the average return rate is also higher. However, perhaps due to the huge return of GMT 41686%, the returns of HOOK 4000%, ID 4100%, and EDU 3290% appear less impressive. But comparing these projects to GMT, which has such a significant impact on the entire industry and even beyond, is clearly unreasonable.

In fact, currently, data shows that Binance Launchpad is still the best investment target in the bear market.

欢迎加入律动 BlockBeats 官方社群：

Telegram 订阅群：https://t.me/theblockbeats

Telegram 交流群：https://t.me/BlockBeats_App

Twitter 官方账号：https://twitter.com/BlockBeatsAsia