In Search of Sustainable Passive Yield: Gate Launchpools

What Are CEX Launchpools?

Crypto offers plenty of earning opportunities, especially in the DeFi world, where users can select among liquidity mining, lending protocols, yield farms, etc. But those come with numerous complexities and increased risks, such as smart contract exploits, impermanent loss, and unreliable reward structures. Centralized exchanges, as a natural bridge between Web2 and Web3, offer similar opportunities, but in a more accessible, curated, and user-friendly manner, including flexible staking products, structured earn programs, and more.

Today, most centralized exchanges offer Launchpools as part of their broader product suites. These programs allow users to stake their assets, typically large-cap tokens like Bitcoin or Ethereum, stablecoins, and often the farmed token itself, and earn rewards in the form of newly launched project tokens. The process is straightforward: users deposit their crypto into a designated pool and begin earning rewards automatically, often with the flexibility to withdraw at any time. The rewards distributed through launchpools usually come from the project teams, who allocate a portion of their token supply to attract early interest and build a holder base. For participants, it is a way to gain early exposure to new tokens without having to buy in directly, simply by putting their existing assets to work.

In launchpools, the Annual Percentage Rate (APR) reflects the projected return based on hourly token rewards relative to the amount staked. Hourly rewards are calculated using the user’s average staked amount within that hour, divided by the total pool size, then multiplied by the hourly reward pool provided by the project. Since token prices fluctuate, APRs are dynamic and may change frequently based on both pool participation and market valuation of the reward token.

Formula:
APR = (Hourly Reward per User ÷ User Stake) × 24 × 365 × 100

Key components:

• Hourly Reward per User = (User’s Avg Hourly Stake ÷ Total Pool Stake) × Hourly Reward Pool

• User Stake = Amount of tokens the user has staked during that hour

• APR is dynamic, adjusting based on the size of the pool, total participation, and the real-time price of the reward token.

Case Study: Gate Launchpool

Gate Launchpool offers a structured way for users to earn new project tokens with staking mechanics. While the concept is straightforward, the product architecture includes several mechanics that set it apart from typical staking models used by other exchanges:

• Rewards are distributed hourly, which improves capital efficiency.

• No lock-up periods, meaning users can stake or withdraw at any time without penalties.

• Multiple pools can be joined in parallel, giving users the ability to optimize their farming strategies and manage risks.

• Low participation thresholds and limited staking caps make the product accessible to a broad range of users.

• All rewards are provided by the project teams, with distribution rates and caps made transparent at the start of each event.

While Gate Launchpool is designed for ease of use, the mechanics behind it rely on a precise and transparent reward distribution model that rewards consistency and engagement. Rewards are calculated hourly based on a user's share of the total pool during that period, and earnings are automatically credited to the user's spot account without any manual claiming required. Users can add to their staked amount at any time and participate in multiple ongoing projects, although each pool requires a separate commitment. Although staking and redemption are fully flexible, maintaining a stable stake is generally more efficient, as frequent changes can lead to lower average holdings during hourly snapshots, which in turn reduces reward allocation.

Gate Launchpool has shown consistent traction over recent quarters, with growing user participation and a steady flow of new token events. In Q2 alone, the platform released nearly 20 new projects in May and distributed over $3 million in rewards. Gate Launchpool listed 21 projects in July, distributing over $2.8 million in airdrop rewards with annualized yields reaching as high as 4,509%. The new token prices surged up to 111%. Total stake assets reached approximately $2.9 billion. As of July 2025, the platform has hosted 294 launch events with over 6.1 million total participants and a cumulative airdrop value exceeding $73 million.

Compared to competing CEXs such as Binance Launchpool, OKX Jumpstart, Bybit Launchpool, and Bitget Launchpool, Gate Launchpool stands out as the most consistently active. As of mid-2025, Gate has hosted over 290 Launchpool projects, with new pools appearing almost every week. In contrast, OKX has launched just 11 pools in total, with only one so far in 2025. Binance has hosted 108 projects, Bybit 53, and Bitget 41, according to data from CryptoRank. Another notable distinction is the reward distribution model. While many platforms calculate rewards on an hourly basis, actual payouts often occur just once per day. Gate, by contrast, settles rewards hourly, giving users greater flexibility and real-time control over their yield.

Analysis of Ongoing Launchpools

At the time of writing, five launchpools are running on Gate, with a combined $1.34 million in rewards available for distribution. These pools feature a diverse mix of reward tokens, staking options, and yield profiles, with projects such as IKA, NERO, and DELABS, catering to users seeking steady returns on major crypto assets:

Several pools currently support USDT staking, targeting users who want to earn yield without taking on market volatility from the asset they deposit. These include the WXTM pool with an APR of 116.97%, and the DELABS pool offering 36.66%. These high returns for a stablecoin-based product reflect the appeal of Launchpool participation for new users, particularly given the low entry cap (2,000 USDT) and the liquidity of USDT itself. While these pools present lower risk in terms of deposit volatility, the reward tokens themselves may still be subject to significant price swings.

Several launchpools also offer staking opportunities for BTC and ETH holders, although these pools generally yield more modest returns. The BTC pool for NERO currently shows an APR of 1.67%, while the ETH pool for DELABS offers 2.21%. These figures are in line with past Launchpool averages for major asset pools and are likely to appeal to users with long-term holdings looking to generate passive income without exiting core positions. These pools also tend to attract larger total deposits, which dilutes the available reward pool and keeps yields relatively conservative.

A separate category is GT-based pools, which cater to users holding Gate’s native token. The IKA pool offers a modest 5.53% APR, while the ELP pool is slightly lower at 3.29%. These pools provide an additional utility layer for GT holders looking to optimize idle balances within the Gate ecosystem.

Lastly, a number of active pools involve staking the same token that is being distributed as a reward, such as WXTM, DELABS, IKA, NERO, and ELP. These pools typically offer the highest APRs, with WXTM at 1104.12%, ELP at 625.23%, DELABS at 371.28%, NERO at 460.99%, and IKA at 203.05%. These high yields reflect both the elevated risk and the supply-driven incentive model: participants are compensated for absorbing volatility and providing early liquidity to projects that are still establishing market presence. While the returns can be substantial, they depend heavily on the post-distribution price performance and tradability of the reward token. For this reason, users engaging in these pools should consider hedging options or structured exit strategies to manage downside exposure.

Pro Tips: How to Maximize the Effectiveness of Your Launchpool Participation

Before we proceed with some crypto farming lifehacks, every user should be aware of the risks and realities associated with Launchpools. While these products offer a relatively straightforward way to earn passive rewards, they come with trade-offs that can affect final outcomes.

High APRs can be attractive at first glance, but they often correspond to higher volatility in the reward token. In many cases, tokens being distributed are newly launched and may not have established market support. A drop in token price can quickly erode the value of rewards, especially for users who stake the same asset they are receiving. These pools often carry the highest APRs for a reason, as they concentrate both yield and risk in one place.

Even when staking stablecoins or major assets like BTC or ETH, users are still exposed to the price performance of the token they are receiving. While the staked capital may remain stable, the market value of the rewards can fluctuate, especially if liquidity is limited or sell pressure is high after the distribution period ends.

Another overlooked factor is timing. Since rewards are distributed from a fixed pool, early participants tend to receive higher yields. As more users join and the total pool grows, APRs naturally decline. Entering late in the cycle may result in significantly lower returns than advertised at launch.

Lastly, liquidity matters. A token may appear to deliver strong returns on paper, but poor order book depth or limited exchange support can prevent users from realizing those gains in practice. In some cases, attempting to exit a position may move the market more than expected.

A smart Launchpool participant should approach each pool with a clear understanding of the token’s fundamentals, real trading conditions, and their own tolerance for volatility. For those who want to go beyond passive staking and optimize returns, there are a few advanced strategies worth considering.

1. Hedge When Possible

If a pool accepts highly liquid assets like BTC, ETH, GT, or even the reward token itself, users can consider hedging their position through futures contracts. This approach helps neutralize directional market risk, allowing the user to collect Launchpool rewards while remaining market-neutral. In some market conditions, particularly when the funding rate is positive, this setup may even increase overall yield. However, users should monitor funding rates, fees, and slippage to ensure the hedge remains cost-effective.

2. Don’t Assume All Rewards Should Be Sold Immediately

While many users rush to sell their rewards as soon as they are credited, that may not always be the optimal approach. The better strategy depends on the token's post-launch liquidity profile and market behavior. For low-float tokens, immediate selling might trigger price slippage or result in selling at the local bottom. Users should monitor volume, order book depth, and price action over time. If the project has strong backing or exchange support, there may be a secondary rally after the initial volatility. On the other hand, if the token is thinly traded and shows early signs of sustained decline, exiting quickly is often the safer move.

3. Read the APR in Context, Not in Isolation

High APR doesn't always equal high profit. Instead of looking at the APR alone, assess the expected value of the reward: how much of the token you’ll earn, what it’s trading at, and how long you plan to stake. Users should calculate a rough reward-to-risk ratio by combining the projected token amount with realistic price ranges. Also, compare the yield curve over time: if APR has been steadily falling for days, current numbers may not reflect future returns. The most sustainable pools tend to show stable participation and flat-to-declining APRs, rather than erratic spikes.

Conclusion

Launchpools sit at the intersection of token distribution and passive yield, but their long-term viability depends on more than just inflated APRs. What makes Gate's model notable is not the promotional surface, but the infrastructure underneath: a flexible, rules-based system that accommodates different user profiles, from long-term BTC holders to short-term token speculators. Rather than trying to reinvent the launch format, Gate has focused on refining the mechanics that actually affect user outcomes.

The result is a system that rewards timing, planning, and capital efficiency more than simple participation. For users willing to engage critically, for example, tracking APR decay, reward liquidity, and hedging opportunities, Launchpools on Gate can function as more than just an airdrop mechanism. They can be used as a portfolio tool that complements broader allocation strategies, especially in a market still defined by uneven risk and unpredictable narratives.