It seems like hardly a day goes by without a new decentralized finance project promising to reshape how users think about money and investing. Lately, this trend has only intensified.

In the rapidly evolving DeFi world, new initiatives push the boundaries of what digital assets can offer. For many, the excitement surrounding these projects highlights the potential for a more transparent and accessible financial future.

While DeFi protocols have the potential to disrupt and democratize finance, many of these projects face significant challenges in securing capital to develop innovative products and stay consistent with their roadmaps. We can chalk this up to a few key reasons that mainly stem from the core tenets of decentralized business models.

For instance, traditional businesses can rely on bank loans or public markets to raise funds, a luxury that DeFi projects don’t have due to their reliance on decentralized governance and existing in an unclear regulatory environment. And this is just the tip of the iceberg.

For one, many DeFi projects cannot access capital pools typically available to traditional tech startups. While venture capital firms specializing in web3 and crypto exist, the number of startups exceeds the number of VCs ready to invest, creating a highly competitive funding environment.

The need for alternatives 

In recent years, the rise of entrepreneurship has heightened the demand for alternative funding solutions, which has caused funding avenues like crypto launchpads to gain popularity. It’s easy to see why—crypto launchpads provide a different route for projects by tapping into a global pool of investors and fostering a more inclusive network of contributors.

However, the launchpad ecosystem has deteriorated as platforms rely heavily on token sale models, which prioritize short-term financial gain over sustained community engagement. Token sales can

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Author: Ariel Shapira