From ICO to IDO: Why Launchpads Should Care About Transparency And Security

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Pre-selling tokens is one of the most adopted strategies to earn funding when you’re a crypto start-up. After an unprecedented boom in 2017, the ICOs have lost their power not only due to lack of interest and necessary traction but also because of its disappointedly high possibility of scams and dirty money traces. Sadly enough, the idea of “cryptocurrency is freedom” is yet to discover some more explicit boundaries to enable a seamless and safe transition from TradFi to DeFi.

One of the ultimate reasons to transition from ICO to IDO was to eliminate the risk of investors selling tokens before an exchange listing, where tokens are immediately listed on the DEX through which they’re launched. In the case of an IDO, the pool is created on a DEX after the IDO is conducted through its own or a third-party launchpad. Consequently, a lot of pressure is put on the launchpads.

With new launchpads popping up on different blockchains every month, it is hard to check whether claiming to be “a highly secure solution” is the actual truth or just another marketing trick to attract more customers. In reality, there are some security-related actions launchpads could undertake that should be considered by the investors when picking “the only launchpad.”

In almost every launchpad business model, apart from holding the native tokens of the launchpads, users need to apply for whitelisting and complete the KYC form. There are, of course, additionally tailored entry requirements for every launchpad that could boost your chance of participating in the pool; however, they usually are not much oriented on security.

Unlike the example of Scaleswap which has placed a strong focus on providing extra security precautions for its users.

Recently, Scaleswap entered into a strategic partnership with PureFi, a DeFi compliance protocol, and incorporated an AML button on their website. Scaleswap is a launchpad famously known for its excellent experience in launching large crypto projects and giving a fair chance of participation in private IDO pools for its loyal customers through ScaleSCORE, a unique loyalty scoring system based on 6 dimensions.
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The current implementation increases the chances that a user is whitelisted for the public pool after receiving a scan free of charge, thus, ensuring that no dirty money will be placed in the pool.

Actions like these are essential for the adoption of institutional money into DeFi and ensuring the security of retail investors and should be considered when deciding whether to participate in the pools or not.