Fair launches have emerged as an ethical model for launching new cryptocurrencies in a manner that is transparent, equitable, and community-focused. By leveling the playing field, fair launches aim to avoid the pitfalls of biased early distribution and investment exclusivity.
What are Fair Launches?
A fair launch refers to a cryptocurrency distribution model where the token is released to the general public in an equitable manner. There is no pre-mine, pre-sale, or early investor exclusivity. Anyone has equal opportunity to acquire the asset at genesis.
This is achieved through a public listing event that enables open participation. Ownership becomes highly dispersed between participants, rather than concentrated in a few early investors.
Benefits of Fair Launches
There are several advantages to the fair launch model:
No Insider Advantage
Fair distribution provides no head start for any group. Early adopters must buy on the open market like everyone else.
Community Rewarded
Active community members who engage with the project pre-launch are more likely to gain awareness of the listing event rather than just insider investors.
Price Discovery Dynamics
Without pre-seed investors dictating value, fair market price discovery occurs organically based on broader supply-demand market dynamics.
Transparency and Trust
Fair launches build community trust by avoiding perceptions of set ups designed to benefit insiders and those with exclusive access.
Liquidity and Stability
With wider initial distribution, fair launches can start with stronger liquidity and less volatility in price discovery.
Challenges for Fair Launches
However, there are some challenges for fair launching new cryptocurrencies:
- Capital Raising. No pre-sale rounds means full dependency on the public listing event without guaranteed capital raising. This increases risk.
- Awareness. Without initial insider and VC investors marketing the project pre-launch, awareness relies fully on community marketing.
- Token Modeling. The token model and launch parameters need to be engineered for fair distribution without insider input on ideal structure.
- Post Launch Funding. New projects may need to rely on community funding or revenue share to finance continued development post launch.
Examples of Fair Launches
Some successful examples of fair launched cryptocurrencies include:
- Dogecoin. The original memecoin pioneer, Dogecoin gained popularity mainly through community engagement, resulting in fair distribution.
- DigiByte continues as one of the most prominently fair launched and community owned projects dating back to 2014.
- Ravencoin launched fairly via mining, eschewing any pre-mine or pre-allocation to founders or investors.
- Vertcoin. ASIC-resistant Vertcoin relaunched itself through a fair, ASIC-proof model to reignite community momentum.
- Grin. Privacy coin project Grin adhered to fair distribution principles with no pre-mine or ICO, favoring GPU mining accessibility.
Conclusion
While fair distribution models face challenges, they build strong community faith and allow more organic price discovery compared to insider-driven launches. As the crypto space evolves, projects that favor fair launches with transparency could gain an edge with values-focused adopters.