Pencils Protocol initially planned its product layout carefully, 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 feature, 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 better achieve early launches and seamlessly connect directly with community users. From the user perspective, it aims to help the Scroll ecosystem community and users establish direct links 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 within the Scroll ecosystem.
- LaunchPad Kaleidoscope, integrating various auction methods
The Auction segment of Pencils Protocol is positioned around the LaunchPad, providing a series of token launch strategies for projects going live, 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 where assets are scarce and demand is high, 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 choices 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 provides users with expectations of multiple returns. For example, if a Scroll ecosystem project is valued at $10 million, it may be valued at $1 million during the Auction launch, and the price of the launch token will be calculated based on this.
This means that the price at which community users acquire their tokens may be one-tenth or even lower than the actual market value when the tokens are available. 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 go live on the Auction are all high-quality projects within Scroll, and the projects launched in each LaunchPad session typically release only a small amount. 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 Launch Pool staking set to begin (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 overall 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. For early projects within the Scroll ecosystem, these projects, which are already undervalued and have low market caps, will see their valuations compressed further after going live on Auction. As the Scroll ecosystem continues to mature, especially with the launch of the Pencils Protocol Ecosystem Hub providing market resources to empower more high-quality projects, Scroll will inevitably produce several representative leaders, making it a very good choice to monitor high-quality projects through Auction.
On the other hand, the Auction is an important community round, further expanding the effects similar to Fair Launch through its innovative mechanism, serving as a launchpad for crypto projects to capture consensus directly from the community.
In fact, some projects that prioritize community rounds in their early stages have typically performed well in the market, as 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.