Launchpad Platforms have gained tremendous popularity during the 2021 bull market. The value accrual that they were able to achieve in a very short period of time can not be overlooked. Therefore it is definitely worth investigating them further.
In the following we are going to analyse launchpads for one of the smart contract platforms that was booming the most in 2021. Without any doubt that definition clearly matches Solana. Due to the incredible rise of Solana we have covered their ecosystem again and again at Frontier Protocols.
In our previous posts on Solana we have covered
- Oxygen, a DeFi protocol &
- Project Serum, a decentralized exchange on Solana
Today we’re going to compare two projects that are offering Launchpads on Solana: Solstarter and AcceleRaytor by Raydium.
Who will turn into the leading IDO Platform for the Solana Ecosystem?
Solstarter is an ecosystem development platform for the Solana blockchain. It can be compared to a startup incubator in terms of the traditional venture capital industry. It is massively backed by a number of professional venture capital firms. The token has not yet been available for sale for retail investors.
The number of projects building on Solana is increasing rapidly. This provides a great opportunity for Solstarter to capture a share of the cambrian explosion that we can currently observe on Solana.
AcceleRaytor by Raydium
AcceleRaytor was announced on April 9, 2021 by the Raydium team. Raydium is an order book based on-chain AMM (automatic market maker).
Raydium intends to expand its services to an IDO platform which will assist teams building on Solana to launch their tokens.
The platform will provide a staking pool for RAY tokens. Users with a minimum of 20 RAY tokens staked will be eligible for obtaining token rewards for projects launching on the AcceleRaytor.
The Raydium token $RAY was trading around 10$ at the time of writing.
Assessing the Potential of Launchpad Platforms on Solana
Launchpad tokens have proven incredibly valuable for investors in the past. Polkastarter on Polkadot, BSCpad on the Binance Smart Chain and CardStarter on Cardano have performed incredibly well in terms of boosting their respective ecosystems and rewarding their token holders.
Comparing Solstarter & AcceleRaytor to other Ecosystem Launchpad Tokens
In the table below we are comparing the size of various ecosystems based on their market capitalization (based on data from the beginning of Q2, 2021). Additionally we put their size in relation to size of the Ethereum ecosystem.
|Ecosystem||Market Cap||Percentage of Ethereum Ecosystem Market Cap|
|Binance Smart Chain||73 bn||29%|
Next we are going to look at the market capitalization of the respective launchpad platform and how large it is in relation to the adjusted size of the ecosystem which it is serving.
|Launchpad Platform||Market Cap||Adjusted Market Cap based on Ecosystem Size (Ethereum Ecosystem = 100%)|
|Trustswap (Ethereum)||293 m||293 m|
|BSCPad (Binance Smart Chain)||136 m||467 m|
|CardStarter (Cardano)*||≈ 110 m||688 m|
|PolkaStarter (Polkadot)||274 m||1713 m|
|SolStarter(Solana)||not yet launched||not yet launched|
|AcceleRaytor (Solana)**||300 m||10,000 m|
|Avalaunch (Avalanche)||not yet launched||not yet launched|
|MoonEdge (Polygon)||not yet launched||not yet launched|
*Estimation by the Editor
**Includes functionalities beyond Launchpad
Note on the table above the $RAY token is used for further DeFi use cases beyond the launchpad platform.
The SolStarter launchpad already obtained a lot of VC investment which may lead to a very high valuation at the token launch. Retail investors should therefore be cautious before acquiring the token and compare the token valuation with valuations of other token launchpad platforms from comparable ecosystems. When making this comparison they should take the relative size of the ecosystem into account.
Also the $RAY token seems to be valued very high in comparison to other launchpad tokens of larger ecosystems. The valuation is still high when taking into account the multiple use cases of the Raydium platform.
Based on our analysis above we believe that the token valuations on Solana are too high in relation to the market capitalization of the Solana blockchain. The token valuations are comparable to the market capitalization of tokens on Polkadot, Binance Smart Chain or Cardano. This appears to be the case because of the massive VC checks that are given to projects on Solana. However, the market capitalization of Solana itself is still considerably lower compared to these platforms.
Therefore investing and holding $SOL itself may currently be the best play for betting on the Solana ecosystem. The adoption and valuation of Solana itself needs to grow further before justifying the current valuations of tokens on Solana.