# 1. What is Launchpool
Launchpool is an innovative mechanism in the cryptocurrency space, usually provided by an exchange or DeFi platform, allowing users to obtain token rewards for new projects by staking or locking specific tokens.
## The core features of Launchpool
1. **Token distribution mechanism**: New project distributes its native tokens to the community through Launchpool
2. **Staking mining**: Users pledge platform tokens or designated tokens to "mine" new tokens
3. **Limited time participation**: Usually there is a fixed activity cycle (such as 7-30 days)
4. **Zero Risk Participation**: Users maintain ownership of pledged assets and only receive new tokens as rewards
## Typical operation process
1. The exchange or platform announces cooperation with a project to launch Launchpool
2. The user deposits the tokens that meet the criteria into the specified pool
3. Calculate daily rewards based on the number of pledges and duration
4. Rewards will be automatically distributed to user accounts
5. The pledged tokens can be withdrawn after the event is over
## Famous Cases
* **Binance Launchpool**: Users pledge BNB, BUSD, etc. to obtain new project tokens
* **PancakeSwap Syrup Pool**: Pledge CAKE to get new project tokens
**OKX Jumpstart**: OKB holders participate in the mining of new coins
## Advantages and risks
** Advantages**:
* Early acquisition of tokens for potential projects
* Get it without buying new tokens directly
* Maintain ownership of the original assets
**risk**:
* New tokens may have a risk of price fluctuations
* Other investment opportunities may be missed during the pledge period
* Smart contract security risk (DeFi platform)
Launchpool has become an important tool for the construction of cryptocurrency projects, which not only helps project parties distribute tokens, but also provides users with opportunities to participate in early projects.
# 2. Launchpool Key terms explanation
In **Launchpool**, common core concepts include **Token**, **Staking** and **Mining**. The following explains their meaning and their role in Launchpool in detail.
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## 1. **Token (Token)**
**definition**:
* Tokens are digital assets issued based on blockchain, which can be ** platform coins (such as BNB, OKB), ** stablecoins (such as USDT, BUSD) ** or ** project tokens (newly issued coins).
* In Launchpool, tokens are usually divided into two categories:
**Staking tokens**: Tokens that users need to lock (such as BNB, CAKE)
**Reward Token**: New project tokens obtained by users through participation in Launchpool
**effect**:
* User pledges ** platform tokens** (such as BNB) in exchange for ** new project tokens** (such as governance coins for a DeFi project).
* New project will increase market exposure and liquidity through Launchpool.
**Example**:
* In Binance Launchpool, users pledge **BNB** to mine **XYZ tokens** (new project).
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## 2. **Staking**
**definition**:
* Staking is when a user locks the token ** in a Launchpool pool of a smart contract or exchange to obtain profits.
* During the pledge period, the tokens still belong to the user, but they cannot be freely traded or withdrawn for the time being.
**Features**:
* **No principal risk**: The pledged tokens will not disappear and can be redeemed after the event is over.
* **Reward calculation**: Rewards are usually calculated based on **Staking quantity × time × rate of return**.
**Flexible staking**: Some platforms allow access to and from any time (such as PancakeSwap), while others require a fixed term (such as Launchpool on some exchanges).
**Example**:
* The user stakes **100 BNB** on Binance Launchpool, and receives **50 XYZ tokens** rewards in 7 days, and retrieves 100 BNB at the same time.
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## 3. **Mining (Farming/Mining)**
**definition**:
* In Launchpool, "mining" refers to the process in which users earn new token rewards by staking tokens**.
* Unlike Bitcoin’s PoW (Proof of Work) mining, Launchpool mining is a type of **Liquidity mining (Yield Farming)**, which relies on **Staking** rather than computing power competition.
**Features**:
**Zero Cost**: Users do not need to purchase mining machines, they only need to pledge existing tokens.
* **Low-term high returns**: New project tokens may fluctuate greatly in the early stages and have higher returns.
* **Automatic distribution**: Rewards are usually settled in blocks or daily and are automatically distributed to user accounts.
**Example**:
* User stake **1000 CAKE** to PancakeSwap's syrup pool and get **10 ABC tokens** (new project) every day.
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## **Summary Comparison**
| Noun | Definition | Function in Launchpool |
| --------------- | --------- | -------------------------- |
| **Tokens** | Digital assets on the blockchain | User pledge **Platform tokens** Exchange for **New project tokens** |
| **Staking** | Lock tokens for profit | Users deposit tokens into Launchpool pool, waiting for rewards |
| **Mining (Farming)** | Earn new tokens through staking | The core mechanism of Launchpool, users "mine" new coins |
### **Key Points**
✅ **Token** is the "fuel" of Launchpool, pledging tokens for new tokens. \
✅ **Staking** is a way to participate, and users lock in tokens but do not lose ownership. \
✅ **Mining** is a revenue process, and users automatically receive new coins rewards through pledge.
Launchpool provides a low-risk way for users to acquire new project tokens in the early stage, while helping project parties improve liquidity and community engagement.