Fork launch is an alternative method of initial distribution especially interesting for Pure PoS.
A recurring challenge with Pure PoS is the initial distribution. A crypto only has value if it is not concentrated in the hands of a few. The main way to ensure such spreading is proof-of-work (another little-known way is side-chain or CLAM's proof-of-chain).
Proof-of-stake doesn't allow initial distribution the way proof-of-work does. Various strategies have been implemented:
- Hybrid PoW/PoS: the crypto is mineable either during all its lifetime or just at the beginning
- Pure PoS: either IPO or any kind of giveaway allow candidates to obtain coins.
Fork launch is a novel way to create a pure PoS crypto, similar to side-chain/proof-of-chain. A copy of the wallet file (wallet.dat) is pasted into the new coin's wallet folder. This is how HYP came into being: TRK wallets were duplicated.
The advantage is that it offers a much wider distribution than an IPO (and also a more secure one, since there is no risk for the invested money to be kept by the coin creator). The hindrance is that it actually creates "magic money". It is like a free IPO for selected people (not totally free, though, because one has to buy or mine the initial coin first)
This criticism was rarely mentioned though, which seems to indicate that the community is fine with this practice. Still, more fork launch-created cryptocurrencies should be created, to better gauge the reaction of the community to something that could be called unfair.