Pencils Protocol initially carefully planned its product layout, planning to launch three core sections in sequence: Farming, Vaults, and Auction. After the Farming and Vaults products were gradually launched, they won a good market response in the Scroll ecosystem. Finally, in early November, the Auction section with LaunchPad as its core function was launched, perfectly completing the entire product system.
Focusing on the Auction product itself, it is mainly positioned as the Launch platform for Scroll ecological projects to support high-quality projects on Scroll to achieve better early launch and directly establish seamless links with community users. From the user side, it aims to help the Scroll ecological community and users directly establish links with high-quality ecological projects, and retain value in the community through the unique LaunchPad mechanism. The Auction product will become an important bridge for users to deeply explore early opportunities in the Scroll ecosystem.
1. LaunchPad Kaleidoscope, a collection of multiple auction methods
The Auction section of Pencils Protocol is positioned as LaunchPad, which provides a series of token Launch strategies for online projects, including classic English auctions, Dutch auctions, fixed-price auctions, batch auctions, liquidity launch pools (LBPs), etc.
In fact, flexible and diverse auction options can meet the market needs of different projects. For example, English auctions are suitable for situations where assets are scarce and in high demand, while Dutch auctions can quickly reach transactions and improve market efficiency. LBP can help new projects gain liquidity in the early stages by gradually reducing the price of tokens, while avoiding excessive price fluctuations and making risk management easier.
From the user's perspective, different auction strategies can attract more types of investors and increase market participation. At the same time, they can also meet the needs of different users and investors, provide flexible options, and adapt to different market environments and trading strategies.
Diverse Launch options will become one of the most important parts of the Scroll ecosystem.
2. Low valuation listing strategy, multiple returns as the foundation
In addition to the diverse auction methods, another highlight of Auction is its low-valued token listing strategy, in which users can expect multiple returns. For example, a Scroll ecosystem project is valued at $10 million, and it may be valued at $1 million when it is listed on Auction, and the price of the Launch token is calculated based on this.
This means that the price of the chips that community users get may be one-tenth of the actual value of the token when it is launched on the market, or even lower. We can simply understand it as a super-discounted LaunchPad. Therefore, after the token is launched on the secondary market, even if the token performs poorly, users can still expect to get multiple returns.
In fact, all projects that can be listed on Auction are high-quality projects on Scroll, and the projects listed on each LaunchPad usually only release a small amount of quota. For users who want to participate, they need to first lock a certain number of DAPP tokens in the Auction's DAPP token pool to obtain quotas and discounts. Therefore, Auction is also an important scenario for empowering DAPP tokens.
Currently, Auction LaunchPad is about to welcome its first Launch project, Rho Markets, and Launch Pool staking is about to open (app.pencilsprotocol.io/auctions). Users’ participation in DAPP staking will be related to the amount of the first Launch project.
In addition, the DAPP staking activity in the Farming product started on November 12 and ended on November 25. The APY during the inactive period was 20%, while the APY in the first week of the activity was 2 times, or 40%, and in the second week it was 1.5 times, or 30%.
3. The wealth effect of Mingpai
The launch of the Auction product is the most important piece of the puzzle in the Pencils Protocol ecosystem product system, and it is bringing a clear wealth effect to Scroll ecosystem users.
On the one hand, Scroll itself is an ecosystem in its very early stages of development. As the SCR token has just been launched to the market and the ecosystem is in full operation, this means that the entire ecosystem pool is in its early stages. Compared with mature on-chain ecosystems, there are more early projects that are worth paying attention to and can be explored in depth, so the potential pool of projects to be launched on Auction is also deep. Similarly, for early projects in the Scroll ecosystem, these projects, which were originally not highly valued and underestimated, will have their market valuations further compressed after being launched on Auction. As the Scroll ecosystem continues to mature, especially with the launch of the Pencils Protocol Ecosystem Hub to provide market resources for more high-quality projects, the Scroll ecosystem will always have several representative leaders, so it is a very good choice to squat on high-quality projects through Auction.
On the other hand, Auction is an important community round that is further expanding the effects similar to Fair Launch through innovative mechanisms. It is a springboard for crypto projects to directly capture consensus from the community.
In fact, in the past, some projects that prioritized community rounds in the early stages usually performed well after entering the market, because a large community and strong market consensus are the foundation for crypto projects to capture value and an important source of long-term development. Auction is providing a foundation for projects to first establish community consensus, and through the community, it deeply empowers the long-term development of projects. From this perspective, Auction is also a very important springboard and value depression.
So no matter how you look at it, the launch of the Auction product is bringing a clear wealth effect to users. Similarly, Pencils Protocol will also establish a leading ecological niche in the DeFi ecosystem and become an important engine for the development of the Scroll ecological value system.