Traditional Fair Launch
Historically, in a fair launch, there is no private pre-sale or pre-mine of tokens.
Historically, in a fair launch, there is no private pre-sale or pre-mine of tokens. Instead, tokens are released to the public in a manner that does not favor any particular party by utilizing third party tolls/mechanisms such as StreamSwap.
Adoption Rate: Fair launches have been around for a while, but have recently started gaining traction in Cosmos with the launch of Streamswap. In contrast to its initial design, fair launches are also being used with the main purpose of price discovery or OTC deals, while there may have been a private sale of the token.
Timing: Fair launches can either be done before the protocol has launched, or together with the protocol launch.
Initiator of the Sale: The fair launch is ideally initiated via governance, however that requires tokens being airdropped beforehand to ensure decentralization of the decision making. Fair launches can also be initiated by the team, which is not recommended as it the launch is perceived as centralized and controlled by one entity eg. the founding team.
Flow of Funds: Funds raised from an fair launch are ideally directed towards certain protocol functions which the liquidity was intended for or the community pool. Funds can also flow to the protocol treasury or community pool. Directing funds to the team is usually not recommended as it raises the question if the sale was conducted by a centralized entity, eg. the founding team.
Who Can Invest: Technically anyone can invest. However, certain projects may impose restrictions based on geographic location or other criteria to comply with local regulations.
Decentralization: Due to little to no restrictions into who can participate, this price discovery mechanism has a high chance of distributing tokens into a variety of users hands, however, this is not necessarily a given as it also depends on the terms of the lockdrop, and how appealing it is to a wide user base. If the Fairlaunch is not initiated by the founding team or project and the funds flow into a protocol owned pool this mechanism is relatively decentralized.