Within 5 minutes into the start of your De-Fi crypto / shitcoin career, you will come across the terms “fairlaunch” or “fair launch,” which is probably one of the more important topics during the beginning phases of a project.
During this period, the pieces of information you receive will likely tell you about the potential, scale, and direction of the project – this includes how the team intends to launch their token.
There are a few types of these launches, including regular Launch / Listing (after pre-sale), Stealth Launch, and Fairlaunch.
What does fair launch mean?
Fair launch simply implies that all interested investors and community members will have a fair opportunity to buy the project’s tokens on the moment of launch. This term is often used as an opposite of projects that have Pre-sales – which normally grants a lucky handful of investors the opportunity to buy the tokens before its listing on PancakeSwap or UniSwap.
You will normally see the term fairlaunch in different formats:
“Fair Launch at [x amount] of members”
This means that the dev/team will deploy the token and share the smart contract address after the Telegram group has reached/surpassed a predetermined amount of members. These fairlaunches are done like this to ensure there are enough buyers interested in the project and also to boost community marketing and shilling. Commonly, these coins will launch at a low market cap due to the lack of pre-launch funding.
“Fairlaunch at [time/date] UTC”
This launch specifies that on this time and date, the dev/team will deploy the token and share the smart contract address to the public. Usually these have more funding than the previous launch strategy, as it provides more room for growth and gives the team and community a week or few to market their project and employ any pre-launch marketing strategies.
No pre-sale investors
Projects that carry out Pre-sales normally sell their allocated pre-sale supply for a slightly discounted price vs launch. This varies from 5-20% cheaper tokens. Although at times, some pre-sales would sell their tokens for the same price, and some even sell it for a slightly higher price than launch.
Projects that have had pre-sales frequently scare away rookie investors, primarily because of the typical trend of having a large green candle on launch, followed by an ugly downtrend / dump. Normally (on a legit project) this means that pre-salers are either taking their profits, or simply selling all of their tokens.
Fairlaunch means that there were no pre-sale or private sale investors. So on the moment of launch, there should be close to 0 holders (aside from the contract, dead address, and other function wallets.)
No Dev Wallets
“No Dev Wallets” simply means just that. It implies that the developer and/or the team was not allocated any tokens during the deployment of the token. The helps to lower the chances of getting rugged because if the developer distributes himself free tokens (most of the time a significant amount) he can simply sell at any point of the chart and his profits can be considered ‘free money,’ essentially.
The term ‘Dev wallet’ can also apply to any wallet that the developer / team has access to, such as a marketing wallet – which means that there is a wallet gets allocated a percentage of all transaction fees to use for marketing and promotions of the project. However, there are sometimes exceptions to the marketing wallet when it comes to Fairlaunches (depending on the scale and use case of course.)
In the case of an actual honest Fairlaunch, if the Developer and the team will have to buy their own tokens on launch just like everyone else. They do not get it for free, they do not get it for cheaper than the public. Everything should be fair and square.
Anti-Whale Mechanisms
Recently, along with the progression of both the ETH and BSC ecosystems, ‘Anti-Whale’ mechanisms have also become a vital element of fairlaunches. Prior to the popularity of this implementation, whale investors used to be able to purchase larger quantities of a project’s tokens on launch – giving them an unfair advantage over the average investor. Anti-Whale mechanisms usually involve implementing a Max Transaction and Max Wallet feature into the contract. This limits the amount of tokens you can buy or sell with a single transaction, and limits the total amount of tokens each wallet is allowed to hold.
Anti-Whale mechanisms also assist in the prevention of sniper bots, which target Fairlaunches with larger amounts of investment. If a launch has been sniped and it has a functioning Anti-Whale function, most bots (with high amount of investments) will have their transaction fail (and will still have to pay their gas fees!)
This is still frequently debated as to whether or not it’s an effective system. Many projects claim to have this function while their contract says otherwise. Regardless, implementing an Anti-Whale mechanism helps more often than not.
Advantages of a Fairlaunch
As stated above, the advantages are quite simple.
You get an equal opportunity as everyone else to buy the tokens. If you manage to get a successful transaction into the first few blocks, then you’re well on your way to riding a green candle. Or, if you plan to hold for long-term, then you got in at the lowest possible price range. In terms of profit, getting in on a fairlaunch can mean great ROI if the project succeeds.
Some may see lower-than-average liquidity pools as an advatange as well. Because most fairlaunches do not seek pre-launch investors, the initial market cap and liquidity is usually low, which can mean lots of room for growth
Disadvantages of a Fairlaunch
There are some disadvantages when buying in a project’s Fairlaunch – regardless whether on BSC or ETH chains.
Usually, if the project has lots of interested traders, the buy pressure will be quite high. Which will result in your buy transaction failing due to the constant fluctuation of the token price.
You may attempt your transaction multiple times before it’s successful and by that time you will have bought the top of a candle. As always, this wouldn’t matter if you’re interested in this project long-term.
It occurs often that when a smart contract has been released to the public, majority of investors will fail to check the contract for any potential scam functions. Due to excitement and hype, most will buy without looking for mint functions, potential honeypots, or dev wallet allocation functions.
We implore you to always take at least a few minutes to read the smart contract before buy into a Fairlaunch. At the very least, you should ask the developer/team for proof of locked liquidity, and renounced ownership (if they claim it has been renounced)
As I also mentioned as an advantage above, low market cap and liquidity might also be a con. Since these are low, it might not attract bigger investors, or even people who are seeking to hold long term.
Simply said, lower market caps and liquidity pools tend to attract smaller investors who are just looking for a quick flip on their couple hundred dollars – in and out.
Are Fairlaunches safe?
Fairlaunches doesn’t affect the level of safety whatsoever. In fact, some might say they are less safe since you are unable to inspect the contract prior to the launch – compared to pre-sales (for example, those done on DX Sale) we are provided the contract address as well. Even buying into a project after hours or days since its launch does not mean it’s still safe. In summary; maybe.
A majority of fairlaunches are super low liquidity and microcap, which means the developer doesn’t really have enough initial investment to lock in the liquidity nor did he care to raise funds. These are normally locked for a couple days at most. Be extremely careful with these as majority of them only last an hour before the chart dips into the pits of hell.
Conclusion
This is just a general overview of what a Fairlaunch is. Most of the smart chain ecosystems are still relatively young and are constantly evolving, which means this article might be totally obsolete by the end of this year. But at the very least, it covers the basic criteria of a Fairlaunch.
As you can tell, most of the latter information on this article generally applies to the scenario of you seeking to buy a coin right away on launch – as opposed to buying a coin when it has already been Fairlaunched.
I hope this helps broaden your understand of shitcoins and their fairlaunches. Next time you participate in on, make sure to ask important questions like these that can determine the level of transparency with the project’s team.
As always, DYOR, invest wisely, and never dm a profile on Telegram that claims to be a woman.
Find more definitions on our Crypto dictionary.