A launchpool is a platform or feature provided by some cryptocurrency exchanges (like Binance) that allows users to earn new cryptocurrency tokens by staking their existing tokens, such as BNB or other supported coins.
Here’s how it works in more detail:
1. Staking Your Coins:
Users can stake their BNB (or other supported cryptocurrencies) into a specific pool dedicated to a new project or token. These coins remain in your account and are not "spent" but are locked for a certain period.
2. Earning Rewards:
In return for staking, you earn the new token (e.g., Vana) as a reward. The more BNB you stake, the higher your share of the daily reward distribution.
3. Free Participation:
There’s typically no direct cost to participate, other than the opportunity cost of not using your staked coins elsewhere. This makes it an attractive way to earn new tokens for free.
4. Token Distribution Period:
The rewards are distributed over a specific period (e.g., 2, 4, or 8 days). After this, you can unstake your coins and keep the earned tokens.
5. Why It’s Beneficial:
For Users: They earn new tokens at no extra cost while still retaining their original BNB.
For Projects: Launchpools help new projects gain exposure, increase their token's initial distribution, and engage a large user base.
For Exchanges: It drives user activity and loyalty to the platform.
This system creates a win-win scenario for all parties involved, making it a popular method for launching new tokens.