Binance Exchange: Is Binance Launchpad Safe?
In January 2020, Binance, the largest cryptocurrency exchange in the world by trading volume, announced that it would launch monthly fundraising for new projects through its Launchpad platform.
What is a crypto launchpad? Read more here.
The first participant was the P2P BitTorrent file-sharing platform. The project raised $7.12 million in less than 15 minutes.
The best file-sharing platforms are here.
A month later, a second fundraising event was held for Fetch.ai. Again, the results were enormous — $6 million was collected in just 10 seconds.
After the listing (inclusion of the asset in the exchange list) on Binance, the prices of FET and BT tokens rose sharply. Naturally, this aroused great interest among members of the crypto community. Other major trading platforms began to open similar platforms at home from that moment on. Among them are Bitrix, KuCoin, OKX, etc.
What is Binance Launchpad, and is it safe to use?
What is Binance Launchpad?
Binance Launchpad is a platform for launching an initial token offering among startups. This allows the project to show its idea to several million exchange users and attract potential investors.
The best no KYC crypto exchange is here.
The working scheme of Binance Launchpad
1. To participate in fundraising, each startup undergoes a thorough check. After all, it is complicated to navigate a vast mass of cryptocurrency projects without the help of an experienced mentor. Here, Binance plays the role of a seed collector, separating the bad from the good.
Here are some conditions for placement on Launchpad:
- Relative maturity of the project development.
- Readiness for mass implementation.
- A strong and purposeful team.
- An opportunity to benefit the development of the broader crypto ecosystem.
2. When the project is verified and allowed to participate, the exchange publishes an announcement about opening a subscription for the sale of tokens. It will indicate:
- The exact time during which the event will be held, usually several hours.
- The cost of 1 token in translation to BNB.
- The maximum amount (limit) that can be allocated for each buyer.
- The date of listing of the coin on the exchange.
- A list of countries that are not allowed to the site.
3. During the time specified in the announcement, any user (who has passed KYC verification) can go to Launchpad and apply for participation in the IEO (initial exchange offering).
To meet the huge demand for the purchase of coins, a special system operates. It is based on storing Binance Coin (BNB) in your spot wallet for 7-30 days (different for each project.)
The exchange takes a snapshot of your balance every day during this period. Based on these data, the average daily BNB balance and its percentage of the total number of other participants are calculated. This percentage determines the number of tokens that you will be able to buy.
4. After the end of the subscription period, the calculation of the distribution of coins among the participants will begin, which takes one hour.
After the announcement of the final results, the required amount of BNB is debited to the payment account, and the purchased tokens are transferred to your spot wallet.
When the token is listed on Binance, many investors immediately sell them at a price that is several dozen times higher than the purchase price.
How to buy tokens before listing on the Binance exchange
If you decide to try to buy coins on Launchpad, this instruction will help you consistently perform all the necessary actions.
1. Log in to your Binance account. If you don’t have one yet, register.
2. After logging in, click on the icon with the squares in the upper panel on the left and select the Launchpad menu from the drop-down list.
A list of all activities (current and completed) will be published here.
3. Click on the project’s icon you are interested in to read more about the terms. You will be redirected to a page that contains all the necessary information about this IEO, including:
- Estimated retention period. The estimated retention period of BNB is the date from which daily BNB snapshots are taken on your spot wallet to calculate the share.
- Subscription before date. Subscription before — the exact time of the start of the subscription for the sale.
- Billing period. The billing period is the time for calculating the distribution of tokens between participants.
- Final distribution. The final distribution is debiting BNB from your balance and transferring new coins to your spot wallet.
The subscription to the project will start at the specified time.
4. To do this, you need to click on the “Fix BNB” button. It will appear immediately after the start. If the button does not appear, reload the page.
5. In the window that appears, enter the amount of Binance Coin to purchase (the maximum amount for you will be indicated). Software errors are possible here, so press the button to the bitter end.
Now the billing period begins, which usually lasts several hours.
As a result, you will receive the purchased coins to the balance, and the remainder of the unspent BNB will return to your spot wallet.
6. All that remains is to wait for the listing of the token on the exchange. Find it by ticker in the drop-down list of currency pairs — you will see the start of trading.
Since the asset price soars several times at the start of sales, many prefer to make a profit immediately.
Is Binance Launchpad safe?
Many users are interested in whether Binance Launchpad is safe or not. Unfortunately, it will not be possible to answer unequivocally because the official story provided by the platform says that all data is encrypted, and there is no danger for users on the exchange.
However, there are various disadvantages. For example, with the verification requirements, you will not be able to use the Launchpad anonymously. In addition, before participating, it is necessary to buy BNB in advance. This also includes the need to have a large amount of BNB in your account to count on sufficient tokens.
But the reverse scenario is also possible. There were cases when tokens grew in price after the start of the listing and even exceeded the initial amount. But this is instead an exception, and it is not entirely reasonable to count on this.
Therefore, most participants prefer to sell coins immediately and get a one-time but good profit.Be protected on the internet. Learn steps to take to protect your data.