NewField Fund
8 min readApr 10, 2021

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Solving the “Launchpad Allocation Problem”

Problem: Eventually, every legitimate launchpad token rises to a price level which prohibits new entrants from being able to afford a “tier”, or allocation. This has caused new entrants to move onto the next launchpad, which explains the rapid proliferation of a new launchpad everyday (or so it seems).

Thesis: We believe the most important place to start when trying to solve the Launchpad Problem begins with the most fundamental aspect of the platform itself, fundraising.

Current Model:

As depicted above, we illustrated the trajectory of an “average” project/token launched on an IDO platform. The numbers here are just meant to serve the purpose setting the scene, and should not be taken literally. The idea is pretty straightforward however;

  • Raise/launch a SIGNIFICANTLY small amount of money/hardcap.
  • Price the token/offering such that on launch, the token will rise at least 10x in price.
  • Assuming the project is great, over time the price will appreciate at least 30x in price.

The above model has worked great in terms of financial returns. However, this model only works for a very select few that get to participate in the IDO’s, assuming they get decent allocations. This is due to the simple fact that LaunchPads and projects purposefully raise very low amounts of money at the start, in essence artificially deflating the market-cap pre-launch to produce exponential returns. However, this model is the enemy of accessibility.

This model we believe to have been created during the 2018–2020 bear market. Due to a lack of capital in the crypto space as a whole, this method of artificially deflating marketcaps at launch to produce exponential returns worked well. This was the polar and extreme opposite of the 2017 ICO boom, where projects were at a race to the top in terms of who could raise the most money at the launch stage. Crypto is a very volatile space, and it goes without saying that the pendulum will continue to swing in both directions.

We believe a new model can be created that captures the advantages of both methods, along with solving the LaunchPad Problem.

Introducing the “NPV-NFT”

NPV, or Net Present Value is a term used in traditional finance to calculate the viability of an investment and its future returns. In other words, it is a method of valuing an investment today, based on future expected returns. The very basic model is depicted below.

As you can see above, we can get a rough estimation of what we expect are investment to be worth in today’s $, based on expected cash flows, and the discount rate (opportunity cost + inflation).

This methodology is the foundation on which all of finance is built upon. Investors are willing to part with their money today in order receive future cash flows and returns.

How can the NPV methodology be used to solve the LaunchPad Problem?

In essence, the goal of the NPV-NFT is to create/onboard a completely new kind of investor. This investor ideally takes a longer term approach to investing, and is willing to commit a small amount of capital upfront for the expected future cash flows (NPV approach). This investor would be the opposite of the typical IDO investor buying $XPAD token before IDO, receiving tokens at TGE, then dumping said tokens immediately for a quick flip, along with $XPAD tokens until the next snapshot. (This kind of investor is still needed in the ecosystem though).

Let us define the key elements needed for the NPV-NFT system work.

  • NFT- created by artists, represents a derivative of the $TPAD token (grants allocations)
  • Deflation mechanism
  • Dynamic Vesting Schedule* -Solution to the LaunchPad Problem

“ NPV-NFT : created by artists, represents a derivative of the $TPAD token and art collectible.”

The NPV-NFT will be both a means of showcasing crypto artists’ work, along with being a financial instrument. The duality of the NPV-NFT makes it truly unique. In terms of the artistic value of the NPV-NFT, some of the most promising crypto artists will partner with TalentPad to create truly remarkable limited edition NFTs.

-Why would the best crypto artists come to TalentPad?

Launching a portion of the Limited Edition NPV-NFT series on TalentPad +Rarible presents artists with an UNIMAGINABLE OPPORTUNITY.

Since the NPV-NFT is also a financial instrument, it will likely trade in the thousands — tens of thousands of dollars in the open market (based on NPV of future IDOs/allocations it grants). Rarible gives a % of every trade of the NFT to the artists. This commission will likely add up to tens of thousands of dollars per NPV-NFT limited edition series. If marketed properly, the most talented artists will come to TalentPad competing for a chance to launch a NPV-NFT limited edition series.

Additionally, the NFT will grant access to all (or some) IDO’s on TrustPad. As time progresses, we expect the price of the $TPAD token to rise significantly, granted that high quality projects are launched on TrustPad. This is of course a desirable outcome.

However, to addresses the accessibility and affordability problem, NPV-NFTs will be sold at a significant discount for an allocation “A” in future IDO’s, compared to buying the corresponding number of $TPAD tokens on the open market (uniswap etc.). Investors will be chosen on a merit basis for the opportunity to get whitelisted for the NPV-NFT sale. The NPV-NFT will be purchased with ETH/BNB/USDT etc.. (not $TPAD)

“Deflation mechanism”

As depicted in the diagram above, a portion of the sale proceeds of the NPV-NFT will go to the artist, aside from Rarible commission ( I know, they are definitely getting a great deal).

For the remainder of the proceeds from the sale, the BNB/ETH/USDT will be used to buy back and burn $TPAD. We highly recommend holding these funds for the buyback and only deploying it at a later time if/when the price drops- to support the $TPAD price. We have seen projects conduct buy-backs and burns when the token price is already high, which makes no sense.

Additionally, in the future, if the $TPAD token price drops significantly, a NPV-NFT limited edition series can be sold exclusively for $TPAD tokens only (which will be burned). This will have a major deflationary effect and cause the price to rise significantly. We believe this method will work best later on, when there are more $TPAD tokens unlocked from vesting. It could even be a great strategy to conduct such a sale during a massive vesting token unlock. This would provide a great support for the $TPAD price.

*Dynamic Vesting Schedule* -Solution to the LaunchPad Problem

We arrive back our initial and most important question to solve. How can one create a launchpad token which guarantees;

  • Decent allocations for $TPAD holders
  • Non-dilutive token-economics
  • Increase in $TPAD price
  • Decent allocations for NPV-NFT holders without buying $$$$TPAD tokens on the open market?

The answer is quite simple. Raise more money for each TrustPad IDO. However, there is a very important caveat here, illustrated below.

The idea is quite simple. By introducing a dynamic vesting model for each new IDO (according to their tokenomics etc..), you can raise significantly more capital upfront, as in the case above, roughly 50% more. Without having the NPV-NFT allocation circulating during the initial launch of the project, the SAME returns from the initial IDO launch can be attained without effecting $TPAD investors. Additionally, one can enjoy the benefits of “artificially deflating” the initial circ. marketcap, without bearing the cost of decreased accessibility.

One could make the argument that theoretically, the fully diluted valuation would increase for the IDO by raising more money for the NPV-NFT allocation. However, we live in the real world. If FDV actually mattered when investors considered buying tokens, 95% of tokens would be worth 1/10th of what they are worth today.

*side note/secret: no team actually believes their project is worth only $300k. The low raise is just a financial gimmick to attract investors who will make money and stick around. By the time team tokens unlock, projects usually sit at around 20x+ from where the IDO was (assuming its a great project). We are taking some of that value from the future and bringing it back to the present, to create the NPV-NFT allocation (this is the essence of net present value). We are confident this method will work.

For the NPV-NFT investor, this is where the “long term mindset” element comes into play. This investor would have received an allocation at a significant discount through the NFT, but would have a longer duration to wait until their tokens unlock. However, this is the essence of the “Net Present Value” foundation of finance, and the new investor we want to create and onboard. Investors will make the decision of whether or not they believe their future tokens will be worth more than selling it today or shortly after launch. Assuming TrustPad launches high quality projects, we assume at least 50–75% of the time it makes more sense to sell tokens at a later date. This has been the case with almost every launchpad IDO that was of great quality. In such a scenario, the NPV-NFT investor would have come out equally or even better off than the $TPAD investor who sold early, and paid more for a similar allocation. This dynamic will constantly be changing from IDO to IDO, where it makes more sense to be either an NPV-NFT, or a $TPAD allocation investor. The goal here is for EVERYONE to win regardless.

-With a highly deflationary token system, $TPAD holders win.

-With the ability to access allocations at a discount, NPV-NFT holders win.

-It goes without saying, NFT artists will win. Potentially more than anyone else :)

-By raising more money upfront, project/teams win

In summary, the individual elements at play presented above are not entirely new per-say, however, the complex coordination of bringing all the pieces together has never been done before successfully, to the best of our knowledge. We believe a strategy that embodies the spirit and elements of this rough draft, can create a truly unique LaunchPad and DeFi ecosystem.

-The NewField Fund

Disclaimer: Nothing written in this research article, or any article by The NewField Fund should be considered as financial, legal, or investment advice of any kind. Investing in crypto is highly risky, do your own research. #DYOR

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