Launchpool

A Launchpool is a token distribution program run by a centralized exchange. A new project gives the exchange a fixed amount of its tokens, and the exchange hands them out to users who stake supported assets in dedicated pools for a limited time, usually a few days to a few weeks. You keep the assets you stake and receive the new token as a reward, often before or around the time it is listed for trading.

How it works

Each campaign has one or more pools, for example a pool for the exchange's own token and a pool for a stablecoin like USDT or USDC. Every pool has a fixed reward budget spread across the campaign period.

1. You deposit a supported asset to your exchange account and complete KYC if the program requires it.
2. You stake it in the pool you choose on the Launchpool page.
3. The exchange takes snapshots, often hourly, and calculates your share: your stake divided by the total staked in the pool.
4. Rewards are credited at each interval or at the end, depending on the exchange.
5. When the pool closes, or earlier if the pool allows it, you unstake and get your original assets back.

Most pools are flexible, so you can leave early, but you stop earning from that moment. Many pools also set a maximum stake per user so that large holders cannot take most of the rewards.

Why people use it

• New tokens without buying them. You do not spend your capital, you only lock it for a while.
• Use for idle holdings. If you already hold the exchange token or stablecoins, a pool can add a return on top of what you would otherwise earn.
• Early exposure. You get new tokens around listing time, when trading interest is usually highest.

For projects, it is a way to spread tokens across many holders and get visibility on a large exchange.

Limits and risks

Launchpools are low cost, but not risk free.

• Small rewards in popular pools. The reward budget is fixed, so the more people stake, the less each person gets. The APR shown at launch often falls quickly as deposits come in.
• Price of the new token. Many Launchpool tokens drop after listing as farmers sell their rewards. The value you earn can be much lower than the estimate.
• Price of the staked asset. If you buy the exchange token only to farm, a fall in its price can cost more than the rewards bring.
• Opportunity cost. Assets in a pool may earn less than they would in other staking or savings products.
• Custody risk. Your assets sit on the exchange during the campaign. Checking its Proof of Reserves helps, but it does not remove the risk.
• Access rules. Campaigns are often closed to residents of some countries, including the US, and may require full KYC or a minimum VIP level.

Launchpool vs Launchpad and similar programs

Exchanges brand these differently. KuCoin calls its version GemPool, and OKX runs Jumpstart, which covers both mining-style and sale-style launches. Some exchanges now give new tokens through airdrops to holders of their Earn products instead of separate pools.

What to check when comparing exchanges

• Accepted assets. Can you stake stablecoins, or only the exchange token? Stablecoin pools avoid the price risk of the platform token.
• Campaign frequency. How often new pools open, and the quality of the projects listed.
• Per-user caps and total pool size. These decide your realistic share.
• Reward schedule. Hourly crediting lets you sell or withdraw rewards during the campaign. Distribution only at the end means waiting.
• Lock terms. Whether you can unstake at any time, and whether the asset also earns base interest while staked.
• Eligibility. KYC level, VIP or new-user only pools, and regional restrictions.
• Listing details. Whether the token trades on spot markets right after the campaign, and with which pairs.