1/ Summary
In the past few weeks, our community has started to have more frequent discussions about the projects recently launched by the LFG launchpad. These have prompted new proposals from Catdets on the LFG forum, such as a new category for Establishing Projects, Tokenomics as mandatory requirement, etc.
In alignment with the community’s POV, our group would like to present comprehensive details about the LFG winners. This includes a comparative analysis of the pre and post-TGE scenarios, and we’ll conclude with a summary in key points.
Our team proceeded with the following steps:
- Gathering data from LFG winners, such as tokenomics, VC funding and pre-mined tokens, among others
- Evaluation of token performance for certain timeframes
- Community aspects and project conduct after the TGE
- Analysis/correlation of all the data and conclusions of the current system
This study, developed by Catdets @Aro, @buddlestraws and @Morten, is crucial for understanding and evaluating the latest projects launched by LFG Launchpad. It will allow us to draw conclusions and encourage the community to discuss/evaluate upcoming projects in a more objective and technical way, resulting in a positive impact for the entire ecosystem. We will add some suggestions for specific points that can be improved in the next rounds.
2/ Goal
To conduct a detailed overview of the LFG winners, both pre and post-TGE, to gather insights from the process. This will also serve as a talking point within the Jupiter community for potential process enhancements.
3/ Overview of LFG winners
Our research kicked off with gathering data from each LFG winner, which included everything from general aspects to the parameters utilized in the DLMM. The data is presented in tables and further illustrated with charts to optimize the visualization of the entire context. All data was collected from the official pages of each project, as well as from the LFG launchpad page and Dexscreener for details about DLMM parameters and price action.
Based on the collected data, we have drawn some points. These will be divided into sections for easier understanding:
3.1/ General
- 80% of projects presented their tokenomics pre-voting
- Only UpRock adopted a token incentive program for voters (rewarding who voted in Round #1 and #2)
- 100% projects already had a point system that would be converted into tokens at TGE
3.2/ VCs + Circulating Supply and FDV analysis
- 100% of LFG winners have VC investment in a $4-8M range (Average $5.52M and Median $5.5M)
- 100% of LFG winners are established projects with a high VC funding
- VC allocation makes up 11.8% of tokenomics on average in a 4-17% range
- VC allocation unlocked at TGE represented 10% of circulating supply and could create more sell pressure at listing
- 100% of LFG winners used a low float model in a 10-18% range at TGE
- 2/3 of projects are down comparing FDV listing to FDV now; All projects are down comparing FDV 1st min to FDV now
- FDV listing is unrealistic for a common user, which is why we used FDV (1st min) for traders
- Average performance (listing vs. now) is -35.6% and -74.447% for (1st min vs. now)
3.3/ Price evaluation
- 100% of projects are in a downtrend in a major loss compared with the price (1st min)
- Sharky presented the worst performance with a -95% loss comparing 1st min x now
- All projects have performed very poorly after a few weeks without any unlocking event
3.4/ DLMM and Alpha Vault analysis
- If the price action is near initial price before 72 hours, there’s a natural tendency to see a downtrend tendency after backstop removal (UpRock and Sharky)
- Tokens had their volume peak in the 1st week: Sharky on the 1st, Zeus on the 5th and UpRock on the 3rd day
- Jupiter introduced a new system to combat sniper bots at listing called Alpha Vault, where users can deposit in Meteora Vault earlier and have a guarantee to be the 1st buyers (with a linear vesting system)
- UpRock was the 1st project using this system and users had a ~61M FDV entry. Even using this system, users would be in a loss before completing the vesting (~5 days)
3.5/ Community
- Townhalls and pre-TGE events have been informative for the community
- There’s a lack of details on how projects will proceed post-TGE and their short-term plan
- We observed that part of the community had problems to understand/analyze technical aspects, such as tokenomics
- The extra reward from UpRock caused a misunderstanding for part of the community (extra reward x ASR)
- Negative sentiment due to UpRock’s conduct post-TGE, which reflected in Jupiter’s discord with FUD
4/ Remarks and Suggestions
In the preceding segment, we conducted an in-depth analysis of the LFG winners covering a broad spectrum, from the basics to community-oriented aspects, in order to derive certain remarks. For clarity, we’ve structured these insights into the following points:
- The absence of small to medium capitalization projects in the LFG winner’s list demonstrates the significant difficulty that small caps face when competing against established projects with high VC funding.
- The LFG winners exclusively adopted the low float model, which showed poor short-term performance (-74.447% for 1st min vs. now). This can generate negative sentiment in the community towards future projects, potentially leading to a reluctance to invest in these tokens during the initial days, which could result in decreased trading volume = less fees for Jupiter.
- The community is discussing the creation of a new category for small caps to increase diversity in the LFG launchpad.
- Alpha Vault, when viewed isolated, made for a very smooth open on TGE. A case could be made that it should however only be used in situations in which large trade volumes are expected, as the price action in the days after TGE negatively impacted the effectiveness of the vault. However, this system, combined with pre-mined tokens and their subsequent vesting, creates a gradual increase in selling pressure. This is accelerated by removing bootstrap liquidity from the alpha vault prior to the full vesting of this mechanism.
- The community has raised questions about the altered vesting schedule for the Alpha Vault, as the tokens become fully unlocked just a few days after the bootstrap liquidity removal.
- A suggestion for Alpha Vaults is to create a separate mechanism that reduces the number of bins taken when a certain amount of time has passed without a deposit. This would accurately gauge the market’s sentiment and protect deposits.
- There’s a necessity to improve the communication/explanation about bonus airdrops, Alpha Vault and other mechanisms, because this issue was noticeable in several communities (extra reward vs. ASR).
- Townhalls and pre-TGE events have been informative. It should definitively be a requirement for the project to appear before their TGE to touch base, explain how they intend to proceed post-TGE and their short term vision to get up and running in the Solana ecosystem.
- There’s a lack in a technical content explaining the tokenomics/other aspects from LFG candidates in a “soft” way for the public. It’s crucial to present all information objectively.
- It’s essential to discuss with the projects and explain the next steps after the TGE to avoid the issues previously encountered in UpRock.
5/ Conclusion
We hope this study will spark more discussions about the technical details among future LFG participants, fostering improvement within our community. This initiative will be applied in every LFG round, and we rely on all Catdets to help/provide feedback to optimize this concept. In our opinion, establishing a small, educationally-focused group to distill and teach the information is highly valuable to help the community.
6/ References
Here are the references consulted in crafting this study: