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Ever since the inception of DeFi, dApps, and protocols have struggled to attract new users and retain existing ones. This translates into a persistent liquidity drought, resulting in rug pulls, a bad reputation, or even worse - shutting off operations. At the core of these challenges is the traditional platform for TGE i.e. launchpads.
Despite nearly a decade of operations, launchpads tend to fail to generate ample liquidity for new projects. Let alone new projects, the locked liquidity figures in leading launchpads tell a scary picture. Despite DeFi witnessing increased adoption, user activity is concentrated in a few chains. So are volume and investor inflows. TVLs can be deceiving and it is an open secret by now. DeFi has had limited adoption and it has led to circulation of volume from one dApp to another.
Under the FTO model, investors buy LP tokens at the time of launch, creating liquid markets from day 1. This ensures that the token is tradeable from day 1, creating a trust-worthy environment for all the investors. Also, FTO allows protocols to sell the LP tokens to raise funding for operational purposes. However, this sale does not impact the token price in any way.
Instead of directly airdropping HPOT to the community, the token is used to purchase assets launched in Dreampad, participate in Dreampad subscriptions, etc., and then use the obtained tokens for airdrops. This increases the average hold duration of a token while establishing a concrete circulation mechanism to sustain long-term growth.Back to the biggest challenge for new DeFi projects, i.e. insufficient liquidity.