Top Crypto Presales
Ionix Chain $IONXLet’s start with a common situation. You’ve just invested in a new and exciting crypto presale. You have your brand new tokens, and now you are probably wondering, “Great, but how will I ever be able to sell or trade these?” For a new token to be tradable, it needs a marketplace where people can buy and sell it.
Let’s use a simple story to understand this. Imagine a farmer who has just grown a thousand amazing apples. He can’t sell them from his barn. He needs to go and set up a stall at the local farmers’ market so people can come and buy his apples. In the crypto world, a “liquidity pool” is the market stall for a brand-new token.
This guide will explain what this “market stall” is, how it gets created, and why it is the most important thing for your safety as an investor. We will break down everything about Crypto Presales and Liquidity Pools: What You Need to Know.
Presales and Liquidity Pools
Before we connect these two ideas, let’s quickly and simply explain our two main ingredients.
What is a Crypto Presale?
A crypto presale is an early fundraising event. A new project will sell its new tokens to its very first supporters. They usually offer these tokens at a discounted price. This allows the project to raise the money it needs to build its technology and to grow.
What is a Liquidity Pool?
A liquidity pool is the project’s “market stall.” It is a big pot of crypto that is locked into a smart contract on a decentralized exchange (DEX). Some popular DEXs are Uniswap and PancakeSwap.
This pot usually contains two different tokens. It will have the project’s brand new token, and it will also have a well-known cryptocurrency like Ethereum (ETH) or USDT. This pool is what allows anyone to instantly swap one token for the other, which is how trading happens.
How Presale Funds Create the Market
This is the most important part of our guide. It explains how the money that you invest in a presale is used to create the very market that you will later trade on. It’s a simple, three-step process.
The Fundraiser
First, during the presale, the project raises money from many different investors. Let’s say, for example, that the project raises a total of $500,000 worth of ETH from its presale.
Seeding the Pool
After the presale has ended, the project’s team will take a large part of the ETH that they raised. For example, they might take $250,000 worth of ETH.
They will then pair this with an equal value of their own new token. They then deposit both of these into a new liquidity pool on a decentralized exchange.
The Market Opens!
The moment that this liquidity pool is created, the “market stall” is officially open for business. Anyone in the world can now go to that DEX and start trading the new token. This is the magical moment when a token goes from being a private asset to a public, tradable one.
The Ultimate Sign of a Safe Project
Understanding this whole process is very important. It reveals one of the most important safety features in all of crypto. This is the core of Crypto Presales and Liquidity Pools: What You Need to Know.
The Green Flag: “Locked Liquidity”
A good and trustworthy project will do something very important right after it creates the liquidity pool. They will “lock” it.
This means they will use a trusted third-party service, like Unicrypt or Pinksale, to create a time-lock on the pool. This lock makes it physically impossible for the project team to take the money out of the liquidity pool for a long period of time. This lock is usually for at least one year.
This is a powerful promise to investors. It shows that the team is committed to the project for the long term and that they will not just run away with all the money.
The Giant Red Flag: The “Rug Pull”
The opposite of having locked liquidity is the famous “rug pull.” This is the most common and dangerous scam in the crypto presale world.
If the project’s liquidity is not locked, the developers can, at any moment, pull all of the valuable ETH or USDT out of the liquidity pool. This drains all the value from the project. It leaves all the investors holding a worthless token that can no longer be sold. The team then disappears with all the money.
How to Check a Project’s Liquidity Plan
Now that you know how important locked liquidity is, here is a simple checklist. You can use it to see if a project has a safe plan for its funds.
Read the Whitepaper and Website
A good project will be very open and honest about its plans for liquidity. You should look for a “Tokenomics” or “Presale Details” section on their website or in their official whitepaper.
They should clearly tell you what percentage of the money they raise will be used for liquidity. They should also tell you if they plan to lock it.
Look for the “Proof of Lock”
After a presale ends and the liquidity has been added to a DEX, a good project will be proud to share the link to their “liquidity lock” certificate.
This link will take you to the website of the third-party locker service. There, you can see for yourself exactly how much money was locked and for how long it is locked.
Use a Presale Listing Platform as Your Guide
Finding all of this important information on your own can be difficult sometimes. This is why using a dedicated platform is so helpful.
When you are browsing upcoming crypto presales, a good listing website will often have a special section or a badge that tells you if a project has promised to lock its liquidity. This can help you focus on safer projects from the very beginning.
The importance of this was a hard lesson learned during the era of the first Initial Coin Offerings (ICOs), where locked liquidity was not a common practice, and scams were everywhere.
Always Consider the Market Context
You should also remember that the value of the money in the liquidity pool will go up and down with the market. It is always a good idea to check the current crypto market prices to understand the real-time value of a project’s liquidity.
Conclusion: The Foundation of Trust and Trade
Let’s go back to our market stall analogy one last time. A liquidity pool is the essential market stall that a project sets up to allow people to trade its new token. And “locked liquidity” is the promise that the farmer won’t just pack up his stall and run away with all the money from the cash box.
It is the foundation of trust between a project and its community. By understanding Crypto Presales and Liquidity Pools: What You Need to Know, you can now identify one of the most important signs of a safe and legitimate project.
This knowledge is like a powerful shield that will help you avoid the most common scams and invest with much more confidence. If you ever need help analyzing a project’s liquidity plan, it is always a good idea to contact an expert team for a deeper look.
