The Pencils Protocol initially carefully planned the product landscape, planning to launch three core modules in succession: Farming, Vaults, and Auction. After the Farming and Vaults products were gradually launched, they gained a good market response in the Scroll ecosystem. Finally, in early November, the Auction module with LaunchPad as the core function was launched, perfectly completing the entire product system.
Focusing on the Auction product itself, it is mainly positioned as the Launch platform for Scroll ecosystem projects, aiming to better support the early launch of high-quality projects on Scroll and directly establish seamless connections with community users. From the user's perspective, it aims to help the Scroll ecosystem community and users directly connect with high-quality projects in the ecosystem, and retain value in the community through the unique LaunchPad mechanism. The Auction product will become an important bridge for users to deeply explore early opportunities in the Scroll ecosystem.
1. LaunchPad Kaleidoscope, Integrating Multiple Auction Methods
The Auction module of the Pencils Protocol is positioned as the LaunchPad, which provides a series of token Launch strategies for the projects to be launched, including the classic English auction, Dutch auction, fixed-price auction, as well as batch auction and Liquidity Bootstrapping Pool (LBP).
In fact, the flexible and diverse auction options can meet the needs of different projects facing the market. For example, the English auction is suitable for scarce assets with high demand, while the Dutch auction can quickly reach a transaction and improve market efficiency. The LBP can help new projects obtain liquidity in the early stage through gradually lowering the token price, and also avoid excessive price fluctuations, making it easier to manage risks.
From the user's perspective, different auction strategies can attract more types of investors, increase market participation, and also meet the needs of different users and investors, providing flexible choices to adapt to different market environments and trading strategies.
The diversified Launch options will become one of the very important modules in the Scroll ecosystem.
2. Low Valuation Listing Strategy, Laying the Foundation for Multi-Fold Returns
In addition to the diversified auction methods, another highlight of the Auction is its low-valuation token listing strategy, which allows users to participate with the expectation of multi-fold returns. For example, if a Scroll ecosystem project is valued at $10 million, it may be valued at $1 million when launching on the Auction, and the price of the Launch tokens will be calculated based on this.
This means that the price at which community users receive their tokens may be one-tenth or even lower of the actual market value of the tokens. We can simply understand this as a super-discounted LaunchPad. Therefore, even if the token performance is not good after facing the secondary market, users still have the opportunity to obtain multi-fold returns.
In fact, the projects that can be launched on the Auction are all high-quality projects on Scroll, and the projects launched in each LaunchPad are usually only a small amount. For users who want to participate, they need to first lock a certain amount of DAPP tokens in the DAPP token pool of the Auction DAPP to obtain the allocation and discounts. Therefore, the Auction is also an important scenario to empower the DAPP token.
Currently, the Auction LaunchPad is about to welcome its first Launch project, Rho Markets, and the Launch Pool staking will soon be opened (app.pencilsprotocol....). The user's participation in DAPP staking will be related to the allocation of the first Launch project.
In addition, the DAPP staking activity in the Farming product has been launched on November 12 and will end on November 25. The APY during the non-activity period is 20%, while the APY in the first week of the activity is 2 times, i.e., 40%, and the second week is 1.5 times, i.e., 30%.
3. The Wealth Effect of Transparent Listing
The launch of the Auction product is the most important piece of the Pencils Protocol ecosystem product system, and it is bringing a transparent wealth effect to the Scroll ecosystem users.
On the one hand, Scroll itself is an ecosystem that is in the very early stage of development, and as the SCR token has just faced the market and the ecosystem is just in a full-scale operation, it means that the overall ecosystem pool is in the early stage. Compared to the mature on-chain ecosystems, there are more early projects worth long-term attention and in-depth exploration, so the project pool that may be launched on the Auction is also deep. For the early projects in the Scroll ecosystem, these projects, which already have a low market capitalization and are undervalued, will have their market value estimates further compressed after being launched on the Auction. As the Scroll ecosystem matures, especially with the launch of the Pencils Protocol Ecosystem Hub to empower more high-quality projects with market resources, the Scroll ecosystem will eventually produce several representative leading projects, so squatting on high-quality projects through the Auction is a very good choice.
On the other hand, the Auction is an important community round, and it is further expanding the effect of mechanisms similar to Fair Launch through innovative mechanisms, which is a launchpad for crypto projects to directly capture consensus from the community.
In fact, in some previous projects that prioritized the community round in the early stage, they usually have good performance when facing the market, because the large community and strong market consensus are the foundation for crypto projects to capture value, and are an important source for the long-term development of the project. The Auction is providing a foundation for projects to first establish community consensus, and deeply empowering the long-term development of projects through the community, from this perspective, the Auction is also a very important launchpad and value basin.
No matter how you look at it, the launch of the Auction product is bringing a transparent wealth effect to users. At the same time, Pencils Protocol will also establish a leading ecological position in the DeFi ecosystem, and become an important engine for the development of the Scroll ecosystem value system.
