People argue that almost all the Alts in the Terra blockchain fails to capture value. If you see the historical performance of assets on Terra, its performance is awful compared to Luna's price action. It may be due to multiple factors, but the token's value capture mechanism and the incentives to hold the token plays an important role.
Atlo is an upcoming launchpad in Terra with an innovative idea promoting long-term token holding.
- The issue with current launchpads.
- Why Atlo is different
Current launchpad situation
Launchpads are protocols where a new project can raise money for its development and provide tokens to early investors at a minimal price. They are like IPO platforms in traditional markets.
Let's look at what happens at a typical launchpad with its token X. Let assume this launchpad is like all other launchpads that give token allocation to whoever stakes $X most. The more you stake more allocation you will get.
Most of the launchpads follow this method as a baseline. They may include improvements in those like different tires, guaranteed allocation etc. But there is always an issue with short term holders who buy a tonne of the coin X just before a project launch, and after they get the allocation, they dump it. Then the short-time whales with enough money can make more money, and the long-time stakers get dumped on their faces!. Launchpads does include mechanisms like penalities for short time stakers, but it is doubtful how effective those are. But in a different perspective, you cannot eliminate the whales; their buying activity is necessary for token X's price appreciation.
Another issue is, what if no new launches are happening on the launchpad? Why should someone stake token X? You may get some staking rewards, but how sustainable or Lucrative is it? If the token holders find an opportunity cost, they will migrate to other launchpads.
Nobody curates the projects that launch in a launchpad. Even if somebody does that, it will be heavily centralized. The token holders don't have a say in which projects should they…