Pencils Protocol initially carefully planned its product layout, intending to launch three core segments in succession: Farming, Vaults, and Auction. After the gradual rollout of the Farming and Vaults products, they received a positive market response within the Scroll ecosystem. Ultimately, in early November, the Auction segment, centered around the LaunchPad functionality, went live, perfectly completing the entire product system.
Focusing on the Auction product itself, it is primarily positioned as a Launch platform for Scroll ecosystem projects, supporting high-quality projects on Scroll to achieve better early launches and directly establish seamless connections with community users. From the user perspective, it aims to help the Scroll ecosystem community and users directly connect with high-quality projects in the ecosystem, retaining value within the community through a unique LaunchPad mechanism. The Auction product will become an important bridge for users to deeply explore early opportunities in the Scroll ecosystem.
- LaunchPad Kaleidoscope, integrating multiple auction methods
The Auction segment of Pencils Protocol is positioned around the LaunchPad, providing a series of token launch strategies for listed projects, including classic English auctions, Dutch auctions, fixed-price auctions, as well as batch auctions and liquidity bootstrapping pools (LBP).
In fact, the flexible and diverse auction options can meet the market needs of different projects. For example, English auctions are suitable for situations with scarce assets and high demand, while Dutch auctions can quickly facilitate transactions and improve market efficiency. LBP can help new projects gain liquidity in the early stages by gradually lowering token prices, while also avoiding excessive price fluctuations, making risk management easier.
From the user perspective, different auction strategies can attract more types of investors, increase market participation, and meet the needs of various users and investors, providing flexible options that adapt to different market environments and trading strategies.
The diverse Launch options will become one of the very important segments of the Scroll ecosystem.
- Undervalued listing strategy, multiple returns as a foundation
In addition to the diverse auction methods, another highlight of the Auction is its undervalued token listing strategy, which offers users the expectation of multiple returns. For instance, if a Scroll ecosystem project is valued at 10 million USD, it may be valued at 1 million USD during the Auction launch, and the token price will be calculated based on this valuation.
This means that the price at which community users acquire tokens may be one-tenth or even lower than the actual market value when the token is offered. We can simply understand this as a super discount LaunchPad. Therefore, even if the token performs poorly in the secondary market, users can still expect to achieve multiple returns.
In fact, projects that can launch in the Auction are all high-quality projects on Scroll, and the projects launched in each LaunchPad session typically release only a small amount of tokens. For users who want to participate, they need to first lock a certain amount of DAPP tokens in the Auction's DAPP token pool to obtain allocation and discount distribution, making the Auction an important scenario for empowering DAPP tokens.
Currently, the Auction LaunchPad is about to welcome its first Launch project, Rho Markets, with the Launch Pool staking set to open soon (app.pencilsprotocol.io/auctions). User participation in DAPP staking will be related to the allocation of the first Launch project.
Additionally, the DAPP staking activity in the Farming product started on November 12 and will end on November 25, with a non-activity period APY of 20%, while the first week's APY during the activity is doubled to 40%, and the second week is 1.5 times at 30%.
- The wealth effect of transparency
The launch of the Auction product is the most important piece of the Pencils Protocol ecosystem product system, bringing a transparent wealth effect to Scroll ecosystem users.
On one hand, Scroll itself is an ecosystem in its very early stages of development. With the SCR token just entering the market, the ecosystem is in a state of full operation, meaning that the entire ecosystem pool is still in its early stages. Compared to mature on-chain ecosystems, there are more early projects worth long-term attention and deep exploration, so the potential project pool for Auction is also substantial. Similarly, for early projects in the Scroll ecosystem, those projects that are already undervalued and have low market capitalization will see their valuations compressed further after launching in the Auction. As the Scroll ecosystem continues to mature, especially with the launch of the Pencils Protocol Ecosystem Hub providing market resources for more high-quality projects, several representative leaders will emerge from the Scroll ecosystem, making it a very good choice to monitor high-quality projects through the Auction.
On the other hand, the Auction is an important community round, and through its innovative mechanism, it is further expanding the effects similar to Fair Launch, serving as a launchpad for crypto projects to capture consensus directly from the community.
In fact, some projects that prioritized community rounds in their early stages have typically performed well in the market because a 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 projects. The Auction is providing a foundation for projects to establish community consensus first, empowering projects for long-term development through the community. From this perspective, the Auction is also a very important launchpad and value opportunity.
Therefore, regardless of how one views it, the launch of the Auction product is bringing a transparent wealth effect to users. Similarly, Pencils Protocol will establish a leading ecological position in the DeFi ecosystem and become an important engine for the development of the Scroll ecosystem's value system.